Coinbase says it doesn’t act as a market maker or run a proprietary trading business — despite what the Wall Street Journal says.
The outlet claimed in an article published early on Thursday that the San Francisco-based exchange, in an effort to shore up its finances, was using its own funds to speculate on cryptocurrencies.
According to the article, citing “sources close to the matter,” Coinbase had taken on “at least four senior Wall Street traders” tasked with generating profits by using company cash to trade, stake, or lock up cryptocurrencies.
And earlier this year, the company apparently completed a $100 million “test trade” despite earlier telling Congress that it didn’t trade crypto for its own account.
However, in a blog post published just hours after the WSJ’s original story, Coinbase says these allegations are wide of the mark.
According to the blog, while it does “from time to time,” purchase crypto as principal, the company doesn’t view this as proprietary trading because “its purpose is not for Coinbase to benefit from short-term increases in value.”
Read more: Coinbase: Politics for me, but not for thee
Instead, the exchange says that WSJ is confusing “client-driven” activities with proprietary trading, pointing out that one of its competitive strengths is its “agency only trading model” — through which it acts only on behalf of its clients. It also claims that its own incentives and its clients’ incentives are “aligned by design.”