Coinbase Trade Surveillance Program: Exchange’s Trading Monitor Tool?
Coinbase Controls Its Markets With a Former New York Stock Exchange Executive
Coinbase, one of the most important crypto related platforms in the world, is building a network that wants to help it monitor its markets in a better way. In this way, the company decided to hire Peter Elkins, an important former executive at the New York Stock Exchange.
In the past, Elkins was head of market surveillance at the Big Board, and now he is building a team known as the Coinbase Trade Surveillance Program. The main purpose behind it is to create a recognized platform to control Coinbase’s markets, this includes the retail one and the other two professional venues.
He said that this is a similar project to the one he worked on at the NYSE. With his work, the market will be able to take the influence of bad actors out. The exchange has decided to carry out police operations by itself, but its rival, Gemini, partnered with equities exchange behemoth Nasdaq to control its market.
Gemini uses Nasdaq’s Smarts as surveillance technology used in Wall Street that is able to identify unusual trading behaviors and on its venue. For example, with the new program planned by Coinbase, it would be possible to identify unusual activity like spoofing, fake orders and wash trading.
It is important to mention that during the last months, different media outlets have been complaining about market manipulation in different exchanges and platforms. Another virtual currency that was attacked was Tether (USDT).
Some days ago, Bloomberg said in a report that the crypto exchange Kraken was manipulating the market because 50,000 trades did not affect the price of USDT, which is linked to the US dollar.
Moreover, another paper released by academics at the University of Texas, showed that Tether was used to sustain Bitcoin’s price during bear markets.
Regulators all over the world are trying to control virtual currencies and find solutions to the lack of maturity that the market has. This is why Coinbase and other companies like Gemini are trying to be compliant with the current regulations and agencies.
Back in April, the New York Attorney General’s Office sent letters to 13 different crypto exchanges asking for information about manipulation, system failures and consumer protection, among other issues.
Some cryptocurrency experts like the Winklevoss twins, believe that these regulations are positive for the crypto world and will allow more investors to enter the market. Jay Biondo, product manager at Trading technologies also believes the same.
About this, Mr. Biondo commented:
“Having effective surveillance is a key selling point. Exchanges that announce that they are monitoring for spoofing was trading, momentum ignition, and other manipulative activity will likely attract more investors because those investors will feel more confident that they are trading in a fair and efficient market.”
Elkins is not the first former NYSE worker at Coinbase, other important figures like Christine Sandler and Eric Scro were also working at the NYSE.