An in-depth report by the Financial Times claims that the exchange has unveiled support for at least 20 cryptocurrencies, all while holding an investment in a related project.
Coinbase has been accused of profiting from the cryptocurrencies it lists — and failing to make clear disclosures about the projects it has invested in.
Until recently, Coinbase Ventures had only listed 12 of these projects on its website. When the FT sent a list of eight projects where its involvement hadn't been disclosed, seven were subsequently added to the website.
Frontrunning the Story
The article helps explain why Coinbase released a blog post last Saturday that said the company is "committed to providing a fair, transparent and equal experience across our suite of trading products."
Chief legal officer Paul Grewal said asset listing decisions are not coordinated with venture capitalists or outside investors — and Coinbase executives only have an input if they are directly involved with the review and listing process. He added:
"Coinbase Ventures has never sold tokens from investments that it has made, and is staffed by a separate team with no influence over which assets may be supported on Coinbase platforms."
Grewal went on to point out that Coinbase's stated goal has long been to list every asset that meets "the requisite legal and cybersecurity standards," adding:
"Being listed on our exchange would not be considered an endorsement; it would simply be an indication that the asset had met our listing standards."
He concluded by vowing that Coinbase will soon share more information publicly — including the assets held by the company, and whether they have been listed by the exchange.
According to the FT, this lengthy blog post was released after the publication had sent a list of detailed questions to the exchange. Summing up why the newspaper's findings are problematic, analyst Faisal Khan said:
"I think that raises a lot of questions about if insiders are dumping on retail investors, as well as conflicts of interest between VCs and exchanges, who work together with zero oversight."