Category: Coinbase

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Coinbase Crypto Exchange Crypto Wallets NFTs

Apple Blocks Coinbase NFT Transfers Over In-App Purchase Dispute

Leading cryptocurrency exchange, Coinbase said it’s been forced to remove non-fungible token (NFT) transactions from the iOS version of its wallet app, following Apple’s decision to apply its ‘Apple tax’ to these transactions.

Coinbase said the NFT feature had been disabled to get around a block on its latest app release due to Apple’s transaction fees policy.

Apple’s policy doesn’t straight-up ban NFT transfers, but it does require that 30 percent of the gas fees — the blockchain network fees paid by users to process the transactions — are paid directly to Apple. 

Complying is Impossible: Coinbase Boss

Coinbase’s official Twitter account posted a thread on Thursday explaining why the NFT functionality had been removed from its iOS wallet app. Coinbase pointed out that it was not possible for it to comply with Apple’s policy as Apple’s in-app purchase system doesn’t currently support crypto.

The thread also likened Apple’s policy to “trying to take a cut of fees for every email that gets sent over open internet protocols.”

Coinbase CEO, Brian Armstrong, tweeted that conversations with Apple had recently started to become “absurd” as Coinbase struggled to navigate what they consider nonsensical policies imposed by Apple.

Cryptosphere Reacts

On Twitter, many users have expressed their frustration with what they perceive as excessive greed interfering with the growth of crypto.

Others pointed to Solana’s soon-to-be-released Saga phone as a potential way around Apple’s policies.

Apple announced in October that NFT in-app transactions would be subject to the same 30 percent fee as all other types of in-app transactions. Apple’s insistence on applying their tax to NFT transactions has meant that NFT marketplaces and other crypto-centric functionality has remained largely absent from its App Store. 

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Coinbase Crypto News Regulation Ripple

Coinbase Seeks to Support Ripple Against SEC

The US’ largest crypto exchange, Coinbase, has weighed in on the high-profile lawsuit brought against Ripple by the US Securities and Exchange Commission (SEC) by filing legal documents in support of Ripple.  

The amicus curiae brief submitted to the court by Coinbase argues that de-listing XRP from crypto exchanges in the wake of SEC’s legal action caused its market value to decline by US$15 billion, “resulting in significant losses to Coinbase’s customers.”

Coinbase’s brief pointed out it had previously urged the SEC to provide direction for the digital asset industry to provide certainty, and defended Ripple’s legal position:

“In the absence of a regulatory framework governing digital assets, Coinbase believes that parties like Ripple must be permitted to pursue fair notice defenses in matters where they are facing surprise enforcement actions like this one.”

Coinbase amicus brief in support of Ripple

Coinbase Support Strengthens XRP Position

Crypto payments network, Ripple, which has its own token called XRP, has been battling the SEC lawsuit since 2020 — disputing the regulator’s findings that Ripple conducted an illegal securities offering by selling XRP, which is the sixth largest crypto by market share. 

Amicus briefs offer information or insights relevant to a case from an organisation not involved in the legal proceedings and are accepted at the discretion of the court. 

In a Twitter thread about filing the brief, Coinbase Chief Legal Officer Paul Grewal said: 

“One of the fundamental due process protections guaranteed by our Constitution is that government agencies cannot condemn conduct as a violation of law without providing fair notice that the conduct is illegal. By suing sellers of XRP tokens after making public statements signaling that those transactions were lawful, the SEC has lost sight of this bedrock principle.”

Coinbase Chief Legal Officer Paul Grewal

The lengthy legal battle has been closely watched due to its ramifications for the crypto industry. Ripple’s CEO has denounced the SEC for its “shameful” behaviour and at one point, Ripple accused the SEC of deleting material relevant to the case.

Support for Ripple by Coinbase and others including the Blockchain Association further strengthens the crypto firm’s position, and a number of legal experts have also speculated that the SEC is likely to lose.

Some in the crypto community called on Coinbase to go one step further in their support by re-listing XRP on the exchange:

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Australia Coinbase Crypto News

Sydney Uni Finds Insider Trading Occurs in 10-25% of Crypto Listings

A group of Australian researchers at the University of Technology in Sydney have released a report claiming that between 10 and 25 percent of Coinbase listings since 2018 involve insider trading.

‘Systemic’ Insider Trading

The report alleges that insider trading is “systemic” in the crypto sector, suggesting that up to 25 percent of Coinbase listings in the past four years have involved insider trading, to a lesser or greater extent.

Professor Ester Felez Vinas, Professor Talis Putnins, and PhD candidate Luke Johnson analysed crypto listings between September 2018 and May 2022, and claim that this resulted in some US$1.5 million in profits. Perhaps more telling is the fact that identified cases have yet to be prosecuted.

As a result, the researchers argue that due to the growing perception of insider trading, it may have the result of scaring away potential investors and “impede adoption of cryptographically secured ways of representing securities and other financial instruments”.

In reaching their findings, the team examined 146 Coinbase listings and tracked their prices 300 to 100 hours before each new listing went live on the exchange to look for abnormal trading patterns of said assets on KYC-free decentralised exchanges.

From visual inspection, we note that there is an evident run-up pattern prior to the listing announcement starting at -250 hours.

Report findings

The report adds that “the run-up continues until the listing announcement event, where we see a jump in price because of new information entering the market and traders reacting to the news”. It concludes by saying that the “run-up pattern we observe is consistent with the run-ups in prosecuted cases of insider trading in stock markets”.

Irresistible Temptations

The report comes as little surprise as evidence mounts that insider trading is increasingly becoming a feature within crypto exchanges, particularly those that are less selective with their listings.

We saw it last year in the NFT space, as one senior executive at OpenSea was found to be front-running listings, and more recently a Coinbase employee was charged for doing the same.

Whether in traditional or crypto markets, human nature remains the same. When people have access to asymmetrical information capable of yielding profits, the temptation to take advantage is often too great to resist.

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Bitcoin Coinbase Crypto News

$10 Trillion ‘BlackRock’ Partners with Coinbase for Clients to Buy BTC

Rumours circulated some six months ago that BlackRock, one of the world’s most influential fund managers, was moving to offer its institutional clients access to crypto trading. Now, it’s become official:

Driven by Client Demand

The news broke on August 4 when Coinbase announced it had partnered with the US$10 trillion financial heavyweight to offer crypto trading to its institutional clients, starting with bitcoin.

Following the alliance, BlackRock’s proprietary wealth management platform, Aladdin, will integrate directly with Coinbase Prime, such that clients will have access to trading, custody, prime brokerage and reporting capabilities. Aladdin is the gold standard of institutional fund manager platforms, suggesting that the partnership is likely to have far-reaching consequences:

In the true spirit of Bitcoin, it’s worth noting that BlackRock’s move to offer bitcoin arose from the bottom-up, rather than top-down:

Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets. This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.

Joseph Chalom, global head of strategic ecosystem partnerships, BlackRock

This represents a dramatic change of tone from years gone by, a fact that didn’t escape Bitcoin Twitter:

Blackrock changes its tune. Source: Bitcoin Archive

Coinbase Soars on the News

Shortly after the partnership announcement, Coinbase stock, which recently suffered a 20 percent drop amid an unregistered securities probe, rose by close to 40 percent.

Unsurprisingly, the company has not been spared from this year’s bear market of “historic proportions“, impacting both digital assets and related firms alike. For the year to date, Coinbase stock remains down over 63 percent, even after this most recent rally:

Coinbase stock YTD. Source: Google Finance

While bitcoin’s price remains supressed against a challenging macro backdrop, it’s telling that financial giants such as BlackRock continue with plans to move forward, proving that this asset class is here to stay.

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Coinbase Crypto News Cryptocurrency Law Regulation

Coinbase Stock Tumbles 20% Amid Regulatory Probe into ‘Unregistered Securities’

Shortly after announcing the first crypto insider trading case, where it identified nine tokens as securities, the US Securities and Exchange Commission (SEC) has now launched an investigation into Coinbase, the publicly listed exchange that listed them:

According to a report by Bloomberg, the SEC is looking into whether Coinbase improperly let Americans trade digital assets that should have been registered as securities. On release of the news, Coinbase stock dropped by 20 percent but recovered shortly thereafter.

Coinbase share price. Source: Google Finance

What Are Unregistered Securities Anyway?

The term “securities” refers to tradeable financial assets, and under US securities law a company may not offer or sell securities to the public unless the offering has been registered with the SEC. Registered offerings are subject to a plethora of laws and regulations that purport to protect investors.

Full disclosure is one of the core elements required within a public listing, designed to help investors make informed choices, and this is typical not just in the US but across virtually all capital markets.

Some of the required information to be disclosed includes the history of the company and its founders, shareholding structure, financial statements, executive compensation, risk factors (both current and future), management’s explanation of operations, and any other material facts relevant to the offering.

If 90 percent of cryptocurrencies are securities, as has been alleged by SEC chairman Gary Gensler, the question then becomes whether relevant disclosures have been made and if not, who should be prosecuted – the project founders or the listing exchange?

Coinbase Denies It Lists Securities

For its part, Coinbase has previously stated that it does not list securities, arguing that:

Coinbase has a rigorous process to analyse and review each digital asset before making it available on our exchange – a process that the SEC itself has reviewed. This process includes an analysis of whether the asset could be considered to be a security, and also considers regulatory compliance and information security aspects of the asset.

Coinbase statement

It also argues that “the majority of assets that we review are not ultimately listed on Coinbase”. The company’s statement went on to criticise the SEC’s approach of “regulation by enforcement”, and stressed the need for a “concrete digital asset securities regulatory framework”.

Clearly, regulators are cranking up the regulatory pressure and, given that some 20,000 tokens exist across the world, the most viable mechanism for regulation appears to be with exchanges. Centralised exchanges should no doubt be expecting increased scrutiny over the coming months.

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Coinbase Crypto News Cryptocurrency Law Regulation

US Regulator Lists 9 Tokens as Unregistered Securities

In a groundbreaking insider trading case against a former Coinbase employee, US regulator the Securities and Exchange Commission (SEC) has identified nine tokens in its complaint to be unlicensed securities:

More Bad Press for Coinbase

The case was announced as insider charges were brought against a former Coinbase product manager, his brother, and his friend for allegedly trading numerous crypto assets on multiple occasions, prior to making them available for public trading.

Coinbase CEO Brian Armstrong took to Twitter saying that the company had received information earlier in the year about possible frontrunning and “immediately launched an investigation”:

As a result of our investigation we identified three suspects and provided this information to law enforcement. One person was a Coinbase employee who we terminated. Today, the DOJ has criminally charged this former employee and the two other individuals for this abusive conduct.

Brian Armstrong, CEO, Coinbase

Unregistered Securities Claim, Again

Earlier this year, Coinbase became the subject of a class-action lawsuit for selling 79 crypto assets alleged to be unregistered securities, and unfortunately for them, another claim appears likely.

This case, emanating from the SEC, alleges that those accused were frontrunning the public listing of as many as 25 digital assets, with nine being described as unlicensed securities. Consequently, they profited to the tune of some US$1.1 million.

Specifically, the claim referred to Powerledger (POWR), Kromatika (KROM), DFX Finance (DFX), Amp (AMP), Rally (RLY), Rari Governance Token (RGT), DerivaDAO (DDX), LCX, and XYO.

Gurbir Grewal, director of the SEC’s Division of Enforcement, commented that they were less concerned with labels “but rather the economic realities of an offering”.

He added: “In this case, those realities affirm that a number of the crypto assets at issue were securities, and, as alleged, the defendants engaged in typical insider trading ahead of their listing on Coinbase. Rest assured, we’ll continue to ensure a level playing field for investors, regardless of the label placed on the securities involved.”

Caroline Pham, a commissioner at the US Commodity Futures Trading Commission (CFTC), said that the SEC’s actions constituted “regulation by enforcement” rather than addressing the question of whether or not certain crypto assets are securities “through a transparent process that engages the public to develop appropriate policy with expert input”.

It’s become increasingly self-evident that regulatory clarity is required on the question of whether crypto assets are unregistered securities, as is often alleged. Securities require adequate disclosure, and arguably that remains conspicuously absent in the vast majority of crypto projects.

However, on the bright side, one benefit of crypto – as highlighted in this case – is that it’s very difficult to conceal your trail if shenanigans are underfoot:

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Coinbase Crime Crypto Exchange Cryptocurrency Law

Former Coinbase Employee Charged in First Crypto Insider Trading Case

Three people, including a former Coinbase employee, have been charged with wire fraud conspiracy and wire fraud over an insider trading tip-off scheme that ran from June 2021 until April 2022, netting the accused over US$1.5 million in realised and unrealised profits. 

These charges are the first to be brought against defendants in a cryptocurrency insider trading case and act as a reminder that crypto markets are subject to many of the same laws that govern traditional financial markets.

Employee Tips Off Brother and Friend to Coinbase Listings

The three individuals charged by the US Attorney’s Office are former Coinbase product manager Ishan Wahi, his brother Nikhil, and his friend Sameer Ramani. 

It’s alleged that Ishan Wahi used his detailed knowledge of upcoming Coinbase asset listings to tip off Nikhil Wahi and Ramani, who then purchased large quantities of the assets just prior to the announcements of their listings and sold them for a profit shortly after the announcements. 

It’s alleged the trio used this method on at least 14 separate occasions, trading at least 25 different cryptocurrencies. In an attempt to cover their tracks, Nikhil Wahi and Ramani created accounts at centralised exchanges in other people’s names and transferred their assets through multiple anonymous Ethereum accounts.

Speaking about the charges against the trio, Damian Williams, Attorney General for the Southern District of New York, said:

Today’s charges are a further reminder that Web3 is not a law-free zone.  Just last month, I announced the first ever insider trading case involving NFTs, and today I announce the first ever insider trading case involving cryptocurrency markets.  Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them. 

Damian Williams, US Attorney General, Southern District, New York

Twitter Post Helps Uncover Scheme

The beginning of the end for the insider trading scheme came on April 12 of this year when a Twitter user noted that an Ethereum wallet had bought hundreds of thousands of dollars’ worth of digital assets just 24 hours before their Coinbase listings were announced. 

The wallet was subsequently found to be under the control of Ramani. Following this tweet, Coinbase opened an investigation into the matter and on May 11, Coinbase’s director of security operations emailed Ishan Wahi to tell him to appear for an in-person meeting at Coinbase’s headquarters in Seattle, Washington, on May 16.

On the evening of May 15, Ishan Wahi bought a one-way ticket to India, which was scheduled to depart the following morning, just before the meeting with Coinbase security. However, before he could board his flight Wahi was intercepted by law enforcement and prevented from leaving the country.

Each of the defendants has been charged with one count of wire fraud conspiracy and one count of wire fraud – each charge carries a maximum sentence of 20 years in prison.

Insider trading is an ongoing issue that undermines confidence in both regulators and markets. Last September, the head of product development for the NFT marketplace OpenSea resigned following allegations of insider trading, and questions were raised about the integrity of the US Federal Reserve following the resignation of two regional Fed presidents over insider trading allegations.

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Coinbase Crypto News

Coinbase the Latest to Cut Staff Amid Crypto Winter, 1100 Layoffs Announced

Coinbase is the latest in a slew of companies that have had to let employees go amid the current bear market. The exchange announced in a blog post that it would be slashing 1,100 jobs, or around 18 percent of its total workforce, as it prepares for an “extended” crypto winter:

(Another) Crypto Winter Is Coming

Coinbase CEO Brian Armstrong has admitted “it is now clear to me that we over-hired”, noting that economic conditions are “changing rapidly” as the world appears to be entering a recession. He said it “could lead to another crypto winter, and [it] could last for an extended period”. Coinbase joins companies such as BlockFi and Crypto.com who announced this week that they would be shedding 400-plus jobs.

Armstrong’s latest plan, to be executed by the end of the second quarter, will see the company’s total workforce whittled down to 5,000 employees. The CEO conceded that the company “grew too quickly” in the bull market, scaling up from 1,250 employees at the start of 2021.

Coinbase shares are down almost 80 percent this year amid a sharp decline in crypto prices which has hurt the exchange’s transaction volumes.

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Coinbase Crypto News Gemini

Coinbase to Downscale, Announces Hiring Freeze and Rescinds Accepted Offers

US-based cryptocurrency exchange Coinbase recently announced it would extend its hiring freeze “for the foreseeable future” as a response to current market conditions. Additionally, the company intends to rescind accepted offers from candidates who had taken employment positions but had yet to start in their roles.

Coinbase Responds to Crypto Market Conditions

As per a blog post written by chief people officer L.J. Brock, Coinbase is looking at implementing cost-cutting measures as a response to “current market conditions and ongoing business prioritisation efforts”.

Moreover, Brock said the exchange would have to rescind “a number of outstanding offers for people who have not started yet”.

This is not a decision we make lightly, but is necessary to ensure we are only growing in the highest-priority areas.

L.J. Brock, chief people officer, Coinbase

In February, Coinbase announced it was on a hiring spree for 6,000 new employees. Less than a month ago, Brock published a tweet saying the firm was actively hiring, though shortly after it was announced that Coinbase had halted the process.

It seems the company is now taking a more severe turn. Naturally, the decision has impacted a vast number of candidates who had been accepted for roles within the company – some of them had pinned their hopes on a position to stay in the US legally:

On May 26, Crypto News Australia reported that Coinbase had entered Fortune 500, a list ranking the 500 top US companies by revenue. However, the firm’s Q1 financial results for 2022 weren’t so encouraging as it suffered a US$430 million loss:

Exchanges Feeling Pain of a Bearish Market

It seems exchanges are feeling the pain of a bearish crypto market, and Coinbase has been one of the most affected firms. As Crypto News Australia reported last month, a lot of retail investors are leaving the crypto market.

Coinbase isn’t the only cryptocurrency exchange that seems compelled to downscale its headcount. A few days ago, Winklevoss-led Gemini announced it would part ways with 10 percent of its workforce due to market conditions.

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Coinbase Crypto News

Coinbase Enters Fortune 500 List of Top US Companies

Coinbase has become the first crypto company to enter Fortune 500, a list ranking the 500 top US companies by revenue.

The San Francisco-based exchange ranked 437th on the list thanks to a record of US$7.8 billion in revenue for the 2021 fiscal year, which represents 514 percent annual growth:

Coinbase ‘Thrived’ Despite Covid

Fortune’s editor-in-chief Alyson Shontell noted that Coinbase and Moderna were among the few companies that “thrived under the freakish circumstances of Covid”.

However, Coinbase’s Q1 financial results for 2022 weren’t so encouraging. According to a shareholder letter, the exchange suffered a US$430 million loss.

In April last year, Coinbase registered as a publicly traded company on the Nasdaq offering the COIN stock, which has since plummeted more than 80 percent from its all-time high of US$368.90 in November 2021:

CEO Remains Upbeat

CEO Brian Armstrong is nonetheless optimistic, believing that bearish market periods provide the company with opportunities to focus on product development:

These periods of low volatility can provide the opportunity to focus more intently on product development (as opposed to peak periods, when we are more focused on meeting high demand). We approach the opportunities ahead with confidence and [a] steady hand.

Brian Armstrong, CEO, Coinbase

A month ago, Coinbase launched its own NFT marketplace that features social tools to help connect users and creators in what it describes as a sort of “Web3 social marketplace”.