Coinbase counters Wall Street Journal, claims its Risk Solutions group engaged in a $100 million proprietary trade

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Last Updated on September 24, 2022 by Bitfinsider

The Wall Street Journal and Coinbase use different definitions. Earlier this year, the newspaper published an alleged account of the digital asset exchange’s trading activities, which it claims amounts to proprietary trading. Coinbase responded in a blog post that it had not done so.

The WSJ reported on Thursday, citing “people at the company,” that Coinbase executed a $100 million transaction that was viewed internally as a test trade by the company’s Risk Solutions group, which had been formed for the purpose of proprietary trading. Proprietary trading is the practice of banks and financial institutions trading their own money for their own gain rather than for the benefit of a client commission.

The WSJ noted that while proprietary trading would not have been illegal for Coinbase, it could still be a cause for concern. For example, an institution may trade against the interests of its clients. Coinbase stated in a blog post that “Coinbase does not operate a proprietary trading business or act as a market maker,” despite the fact that “many of our competitors” do.

The money for the $100 million transaction was raised through a structured note sold to Invesco Ltd. at a fixed rate of 4.01%, according to the WSJ. The transaction was confirmed by Invesco to the newspaper.

The WSJ, on the other hand, claimed that “Coinbase used the $100 million to profit in cryptocurrency markets, according to people.”

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