Tag : Coinbase

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Coinbase Disproves Insider Trading Allegations

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San Francisco based cryptocurrency exchange giant has cleared its name from any insider trading allegations. Coinbase launched an independent inquiry at the end of last year to refute allegations made against it. They have successfully cleared their name and proven that there was no such activity.

Bitcoin Cash Trading Allegations

There were concerns about the exchange’s employees conducting insider trading through Bitcoin Cash. July 24th saw the cryptocurrency exchange conclude the investigation into this allegation. The investigation showed nothing of the sort.

The December of 2017 saw Coinbase announce that it will list Bitcoin Cash. This was a hardfork from the first cryptocurrency Bitcoin and they added it to their limited portfolio.

Their addition of Bitcoin Cash resulted in a huge market surge. People started buying Bitcoin Cash like there is no tomorrow. The hardforked cryptocurrency saw a 64% rise in a few hours. For a small time, it was even trading at $9,400. This was a result of the announcement of Bitcoin Cash trading on the exchange.

The sudden surge saw them pause all the trading on the platform. This caused the unnatural price increases to correct itself.

Whenever a new cryptocurrency is listed on a major cryptocurrency exchange, the price increased. This is also known as the Coinbase Effect because of their prominence in the cryptoverse.

Surge Before Announcement

Because the price hike came before the announcement industry observers made the allegations. They believed that the employees at Coinbase had insider knowledge of the matter. That is why they purchased the Bitcoin Cash before other investors.

These allegations led to Coinbase starting the 6 month long investigation. They employed services of two well known law firms to do so. The law firms shared their findings with the company over the course of a week of meetings.

A spokesperson from Coinbase said that the company wouldn’t think twice about firing employees if their policies see violation.

They reported that the voluntary investigation has concluded. There needs to be no action taken against any employees.

After the allegations were made, the CEO of the company released the company’s quality control and trading policy. All the employees are under strict regulation. They know they will face dire consequences if they engage in insider trading. The company will not just terminate the contract but pursue further legal action.

Final Thoughts

The ground reality of the matter is that the company just didn’t handle the announcement of a new listing properly. When the hardfork initially happened, the company said it wouldn’t support the new cryptocurrency. When they launched the BCH on their exchange, it was completely unexpected.

While the internal investigation has cleared the company employees, Coinbase isn’t in the clear yet. disgruntled Coinbase customers have filed a class-action lawsuit against them. They are seeking damages from the company for violating consumer protection laws. There is still a long way to go for the cryptocurrency giant to get out of this situation as the CFTC is reportedly also investigating the cryptocurrency exchange company over the Bitcoin Cash trading allegations.

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Bitcoin Futures Being Swapped for Physical Bitcoin Units

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With the current rally gaining momentum, there’s rising institutional interest in Bitcoin. The last week of July is seeing Wall Street traders complete their first ever swap of Bitcoin futures for actual Bitcoin units.

Two institutional investors completed the first ever exchange of the CME Bitcoin futures for actual Bitcoin units. This counts as a major step towards mainstream adoption for Bitcoin.

E D & F Man Capital Markets and itBit cryptocurrency exchange made the transaction possible. They facilitated two traders so they could swap CME Bitcoin futures for the actual Bitcoin with the same value.

Also known as Exchange for Physical transactions, this sort of transaction allows investors to hedge the commodity and futures. It will allow them to have a diverse portfolio exposure for several kinds of assets. This provides many firms with liquidity, capital, or tax benefits. The EFPs get discussed and decided privately. When the settlement is made, they are reported to the exchange.

EFPs are nothing new. They have existed as a financial instrument for the futures and commodities market for a while now. It is just that this is the first time they have been used to process a futures swap with the underlying asset being a cryptocurrency, namely Bitcoin.

A representative of E D & F Man Capital Markets Inc has commented on this trade.

“Every day we facilitate EFPs for our clients in physical assets such as soybeans, wheat, and treasuries. EFPs on CME Bitcoin futures mark an important step forward in the maturity of the regulated derivatives market for digital currencies.”

With increasing interest by institutional investors, things are changing. Investment firms and hedge funds are going to wait for a shorter period of time when it comes to a regulated market for cryptocurrencies.

Until now, The US Commodity Futures only approved Bitcoin futures being traded for cash once the futures contracts expire. A cryptocurrency-enabled EFP will streamline the transition between digital assets and the mainstream market.

There has been a significant rise in Bitcoin futures trading since the CME group started offering Bitcoin futures trading in December of 2017.

Coinbase, a San Francisco based cryptocurrency trading platform secured a $20 million hedge fund. It plans to use the funds to allow institutional investors to have more options when it comes to their financial services.

The cryptocurrency world is bound to see more institutional capital flowing into the industry if the Bitcoin ETF proposal sees approval. This will also make Bitcoin the second digital asset to be listed on the public markets.

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SEC Approval Was Never Needed to List Security Tokens – Coinbase

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Yes, you read that right. Coinbase, the San Francisco based cryptocurrency giant made an announcement that it never needed the approval from the United States Securities and Exchanges Commission for listing security tokens – back pedaling from a previously made statement in which they claimed they had received the approval of the SEC for it.
The 17th of July saw reports surface that the giant of a cryptocurrency exchange had received approvals from the Securities and Exchanges Commission and the Financial Industry Regulatory Authority for acquiring Keystone Capital Corporation, Digital Wealth LLC and Venovate Marketplace Incorporated. It was after acquiring these three firms that helped Coinbase secure an Alternative Trading System license, a license for broker-dealer and the license to be known as a registered investment advisor.
Having made the announcement, the San Francisco based cryptocurrency exchange giant back pedaled on its statement just after two days. The 19th of July saw reports coming out that the spokesperson of Coinbase said no such approvals were given by the Securities and Exchanges Commission – it was never even needed for them to acquire those companies.
She went on to say that the discussions Coinbase had with Keystone were made on an informal basis without the involvement of the SEC in any form or manner. The acquisition deal did not see any oversight from the regulatory authority. At the same time, TechCrunch reported that Coinbase has confirmed it received approval from the Financial Industry Regulatory Authority for the acquisition – essentially disregarding the announcement made previously. This is a clear sign of blatant miscommunication within the cryptocurrency exchange giant.
Things between the Securities and Exchanges Commission and the cryptocurrency world have historically been “salty” with the authority having cracked down on a lot of cryptocurrency related businesses in the past from exchanges to wallet providing services.
The July of this year has been quite an active time for Coinbase. It has made a number of announcements and the developments being made by the cryptocurrency exchange giant are making quite a few waves in the cryptocurrency community at a macro level.
One of those announcements is the teasing being done by Coinbase that it might just add a few more tokens to the exchange from the likes of Stellar Lumens, Zcash, 0x, Basic Attention Token and Cardano within its list. Of course, there are regulatory concerns to be sorted out before adding them. After all, the cryptocurrency exchange follows legal protocols stringently and cautiously. It remains to be seen what comes of it.

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Cryptocurrency Unicorn Hunters – The Venture Capital Firms Behind Billion Dollar Cryptoverse Startups

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Privately held startup companies which have valuations of a billion dollars or more in the current timeframe – also known as cryptocurrency unicorns – have now started to be infiltrated by a growing number of cryptocurrency centric organizations which are gradually rising in their value. The cryptocurrency unicorns are very well making a name for themselves but at the same time, the Venture Capital firms backing them are poised to gain quite a bit from this disruptive new economy.
With the likes of Coinbase and Robinhood among them, there are over 25 different fintech unicorns all over the world which are seeing a lot of market growth and mass adoption with many of them going well over the billion dollar mark in their valuations. In fact, CBT Insights, a finance intelligence platform, has published some data which shows the Venture Capital firms that are behind all the success that these cryptocurrency unicorns are seeing and where these firms are investing their money.
Venture Capital and Cryptocurrency Platforms
The data clearly shows that some Venture Capital firms are taking a lot of interest in cryptocurrency platforms throughout the world. With the valuation of Robinhood over $1.2 billion and Coinbase being valued at almost $1.6 billion, these are the first couple of cryptocurrency startup companies that have reached the fabled unicorn status among cryptocurrency centric startups. This was the kind of growth that the more forward thinking Venture Capital firms had predicted.
VC has a lot to Gain
Venture Capital firms are easily able to invest their significant funds into blockchain startups which they feel have a lot of promise. They use the more traditional equity deals or cash agreement in exchange for future tokens. Either of these models allow the Venture Capital firms to cash out with the tokens once the ball gets rolling.
Venture Capital firms are thus allowed a lot of flexibility and freedom with their investments when it comes to the cryptocurrency market. The VCs moving in on the cryptocurrency world is not surprising since the cryptoverse shows a lot of promise when it comes to how lucrative they potentially are.
As we move forward, there are more and more cryptocurrency unicorns coming to light and this means we will see a lot more promising blockchain technology based startups garner interest from Venture Capital firms. A significant presence of VCs in the blockchain era is not just a possibility, it is inevitable.