Coinbase Announces Possible 31 New Tokens For Listing, But Elicits Varied Response From Community
Coinbase announced earlier in the year that their exchange would end up listing many new cryptocurrencies for a greater range of investment opportunities of users. However, unlike previous announcements, the potential for 31 new assets resulted in disappointment and speculation, though there were still consumers that were optimistic.
Much like any decision for almost any business, there were some people that liked the plan but didn’t agree with the details, while others believe that this decision weakens the company. It looks like the biggest concern was the way that Coinbase’s move is challenging the present meaning of “exchange” and how that alters the development of the infrastructure. Formerly, these were the places to purchase crypto with local currency, but almost none of these “exchanges” fulfill the same role.
Considering that an exchange, on its own, can act as broker-dealer, end client, custodian, clearinghouse, and even prop trader, there are some complications for regulators that need to manage these aspects. By taking on so many roles, the crypto platform an investor chooses becomes substantially more important, especially to the exchange itself. The traditional world doesn’t place much importance on the place investors buy, but this can impact the investor. With such a young market, investors mature beyond beginner-level exchange, ultimately wanting to find something more complex to invest them.
By Coinbase choosing to offer so many new options, they are trying to remain diverse to accommodate the maturing clients already on their platform an opportunity. However, the way that they are approaching this option could result in major consequences, considering the Coinbase effect on token prices. If they abstain from their support of a token, resulting in the token’s failure, they could be on the line with the SEC for market manipulation. Insider trading becomes a potential concern too, since employees may choose to purchase the coin before the reveal and sell while the price is hot.
With more variety to clients, Coinbase is a part of a maturing of investors, even if it does alter the course of the “crypto blue chip” reputation. Still, Coinbase has matured on its own a lot as well, starting as a retail exchange that had much different priorities and tactics than it does now.
Finding the right path for a business is difficult, each infrastructure is different. Still, with this risk of SEC violation, the entire industry could come to a halt. In a report from CoinDesk, writer Noelle Acheson comments, “Let’s just hope that the internal structure issues don’t blind it to the needs of the new world into which it is evolving.”