The recent listing of 0X (ZRX) on Coinbase, one of the world’s foremost cryptocurrency exchanges, has led many to claim that there is a conflict of interest in the company. Though other coins with more trade volume were overlooked, this is not in itself enough evidence to indicate any type of conflict of interest. It is possible that 0X was easier to integrate into the Coinbase platform, given it is on the Ethereum blockchain as opposed to Cardano (ADA), Stellar (XLM) and zCash (ZEC), which are based on different blockchain networks. However, there is more than enough data for these claims, given the ties between Coinbase, Scalar Capital, and the 0X project.
Coinbase ties to oX (ZRX)
News Portal ‘The Block’ confirmed the obvious conflict of interests between Coinbase employees and a firm called Scalar Capital, which assisted in the public sale of ZRX. The founders of Scalar Capital (Linda Xie and Jordan Clifford) are both former Coinbase employees. Xie is married to the co-founder of the 0x project, Will Warren. Three out of five advisors of 0X were Coinbase employees. To further muddy the waters, an engineering manager at Coinbase (Maksim Stepanenko) created the listing framework at the Coinbase exchange, in collaboration with Xie.
There was no real reason to list ZRX ahead of other coins. The coin is trading outside of the top 25 and may not attain the status from the SEC as a utility token, given the pre-mine. The questionable nature of the 0x listing prompted bitcoin maximalist John Carvalho to Tweet –
“Hey @coinbase, do your listing requirements say anything about conflict of interest or are you just gonna keep listing your own coins and the ones made by your friends?”
Is Coinbase trustworthy?
Coinbase is one of the most evolved and well-known exchanges in the world. It works closely with regulators and has been expanding its operations domestically and internationally. It offers a sophisticated trading platform, a crypto mutual fund, a suite of institutional products, crypto custody solutions, and commercial crypto applications such as Coinbase Commerce. It also recently acquired a license as a registered broker-dealer under FINRA and the SEC.
What all this means is that Coinbase is starting to look, sound, and behave exactly like a financial institution, such as a bank. The lines between the two are getting blurred, and cryptocurrency was originally intended as a replacement for a corrupt financial system, as evidenced by the note left by Satoshi Nakamoto in the bitcoin genesis block. Coinbase was started by two former Goldman Sachs employees, and insider trading is not a new or uncommon phenomenon in the financial sector.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.