Coinbase ZRX Listing Draws Questions on Conflict of Interest and Insider Trading
Coinbase ZRX Support Increases Questions About the Firms’ Token Listing Process
Coinbase, one of the most popular companies in the cryptocurrency world has recently added support to a cryptocurrency known as ZRX which is associated with the 0x project. However, some experts are starting to question the company and its decision to list this token rather than others that had priority over ZRX.
The cryptocurrency has been added on October 16 after launching on Coinbase Pro back on October 11. In this way, there are currently six virtual currencies supported by the company: Bitcoin (BTC), Bitcoin Cash (BCH), Litecoin (LTC), Ethereum (ETH), Ethereum Classic (ETC), and the recently launched ZRX.
However, this cryptocurrency has been traded during most of this year outside the top 25 cryptos by market capitalization. Additionally, it has also remained outside the top 20. Some other critics are related to the fact that this virtual currency is yet in an experimental phase.
Indeed, Will Warren, co-founder of the 0x project, wrote a Tweet in which he said that,
“It is a good time to remember that 0x is a ‘highly experimental technology.’ He then added that it is also built on top of another piece of highly experimental technology, Ethereum.”
This is probably a good time to remind everyone that 0x is a highly experimental technology that is built on top of another piece of highly experimental technology.
— Will Warren (@willwarren89) October 17, 2018
He is right when he said that the currency is based on Ethereum. Several Initial Coin Offerings (ICOs), tokens and blockchain networks are based on Ethereum. The ETH network is currently facing some challenges that are clearly affecting the whole ecosystem. It has so many companies and projects on top of it that the network is already congested.
However, some people have pointed at the fact that some individuals working at 0x have a strong relationship with Coinbase. This is the case of Linda Xie, who worked as a product manager at Coinbase for more than 3 years. Currently, she is one of the five advisors of the company. Although it shouldn’t create conflicts of interests, she is married to Warren.
Fred Ehrsam, Co-founder of Coinbase is also part of the advisory team at 0x. And if this was not enough, Olaf Carlson-Wee, advisor at the 0x project, was the first hire at Coinbase.
There is a clear relationship between Coinbase employees and the coins they have decided to list. At least, this is the case of ZRX and Litecoin. Charlie Lee was working at Coinbase ad Director of Engineering. Bitfinex’ed does a great job explaining the relationship between Charlie Lee and Coinbase.
In a Medium post written at the beginning of the current year, he shows that Charlie Lee could have influenced Coinbase’s directors in order to list Litecoin, which Bitfinex’ed marks it was ‘dead’ before being listed at Coinbase.
Additionally, Charlie Lee decided to sell most of his Litecoin possessions when the market was reaching all-time highs in December.
The last two weeks experienced by 0x have been also very positive. The cryptocurrency was traded close to $0.5 dollars a month ago, and it reached $1.04 dollars on October 17. This reflects a growth of more than 100%.
Moreover, something similar happened with Coinbase when it listed Bitcoin Cash (BCH) at the end of 2017. BCH price spiked enormously in a very short period of time and trading activities were halted at the exchange. Some individuals and experts complained that there was insider trading by Coinbase employees.
In July this year, Coinbase announced that they were exploring new token listings and mentioned a few projects and tokens that could be added to the platform in the near future. Among those, we could fine ZRX.
At that moment, the company explained that they wanted to remain transparent with customers about support for future assets. Furthermore, in September, just a few months ago, Coinbase said that it was introducing a new listing process in order to increase the number of tokens traded on its platform.
“Our goal is to rapidly list all assets that meet our standards and are compliant with local law, while providing our customers with the tools to discover, evaluate, trade, and use digital assets,” the firm informed.
Two of the tokens listed by the company had a close relationship with it. Additionally, the crypto platform has been accused of insider trading when it listed Bitcoin Cash. Bitcoin, Ethereum and Ethereum Classic did not create confusion or any other troubles among the crypto community.
However, the company has not been clear and transparent enough about the tokens that they have listed.