Cryptocurrency firm Coinbase has denied engaging in proprietary trading after the New York Attorney General said that almost 20 percent of transactions on its platform were attributable to the company.
Proprietary trading is when a firm invests for its own gain rather than on behalf of its clients. Coinbase has its own cryptocurrency trading platform and wallet.
In a blog post late on Wednesday, Coinbase’s Chief Policy Officer Mike Lempres said that the company “does not engage in proprietary trading.”
It comes after the New York Attorney General released the “Virtual Markets Integrity Report,” which highlighted concerns over the current cryptocurrency trading situation.
One section of the report said that “almost twenty percent of executed volume” on Coinbase‘s platform was attributable to its own trading. This information was voluntarily provided by Coinbase.
“Such high levels of proprietary trading raise serious questions about the risks customers face on those platforms,” the New York Attorney General said.
But Lempres argued that this comment was “misreported in the media as ‘self-trading,’ which is inaccurate.”
“Coinbase does not trade for the benefit of the company on a proprietary basis. In order to provide an easy-to-use customer experience, Coinbase Consumer quotes a price and then quickly fills the order from our exchange platform (Coinbase Markets). This takes advantage of the liquidity provided by the entire Coinbase ecosystem,” Lempres explained.
The report raised issues over platforms’ ability to stop abusive trading activity and protect customers’ funds.
Regulators globally have been taking a closer look at the cryptocurrency industry. On Wednesday, U.K. lawmakers said they want to clamp down on the “Wild West” cryptocurrency market and make Britain a legitimate home for the trading of digital currencies.