Coinbase has unveiled a set of guiding principles designed to facilitate the adoption and growth of its new range of products and services aimed at institutional investors.
In a blogpost signed by Coinbase Vice President and General Manager Adam White, the company stated that these ‘North Star’ principles will create a framework for the market participant experience on Coinbase to ensure fairness, security, transparency, access to all participants, high-quality infrastructure and processes, protection from malicious activity and provision of all necessary information.
Instituting Fairness, Security and Transparency
According to White, Coinbase will ensure fairness on the platform through a Market Operations team that will actively monitor markets and carry out the same surveillance practices as tier one global exchanges.
The team’s remit will include active monitoring to catch suspicious trading behavior and the ability to halt and reestablish liquidity where necessary. In line with this, Coinbase promises to provide what it describes as “institutional grade infrastructure and processes” to reduce risk for investors in the areas of cybersecurity, compliance, onboarding and operating standards.
The company also says that in order to ensure customer security, it will commit to regular third-party audits, and continue offering custody services using high-security cold-storage techniques.
To ensure transparency, equal treatment and access to all needed information at all times, Coinbase says that it will provide a market rulebook specifically developed to cater to the unique structure of the crypto asset market.
An excerpt from the blog reads:
“[Coinbase will] provide public trading rules and policies that are fairly applied to all market participants, publish transparent trading fees and incentive programs, clearly communicate market capabilities such as order minimums/maximums, execution options, trading volumes, and maintenance schedules and commit to ongoing independent third-party audits to ensure compliance with applicable regulations and industry standards.”
According to Coinbase, its institutional services will ensure that all market access methods are public and documented and that distributed market data is consistent and fair. It also says that the platform will cooperate with other industry participants where necessary to the benefit of its customers.
Transparent Listing of Assets
Most significantly, the post lays out a detailed plan to ensure complete transparency in the process of asset listing at a time when the so-called ‘Coinbase Effect‘ has come under fire in some quarters, with some critics accusing the company of effectively rigging the market.
An excerpt reads:
“Strict, transparent adherence to a transparent listing process, which considers factors such as sophistication and security of technology, governance processes, market demand and regulatory considerations, among others. Every new asset will be announced in a transparent and consistent way, ensuring equal information sharing across our customer base.”
The publication of these principles comes at a crucial time for Coinbase as the crypto market readies itself for the expected entry of large institutional investors. Ensuring transparency and security is perceived as a key issue, with any failings therein likely to make the platform a reputational risk for large investors.
CCN reported in July that Coinbase concluded an internal probe over last year’s Bitcoin Cash listing, finding no evidence of insider trading.