In an unexpected turn of events, seasoned Coinbase critic confesses to being a longtime customer of the cryptocurrency exchange. This confession comes after years of critical reviews, including the launch of a boycott against the platform in 2019 under the hashtag #deletecoinbase, when Coinbase hired former leaders of a hacking organization called Hacking Team. Ultimately, the executives at Coinbase admitted their mistake and fired their questionable hires.
Now, Coinbase has announced the opening of its offshore cryptocurrency derivatives exchange. Ordinarily, this move would invite further criticism, but it seems that Coinbase has implemented this decision not out of choice, but in response to the US Securities and Exchange Commission (SEC) Chair Gary Gensler’s ongoing crypto crackdown. This campaign appears to be targeting Coinbase – a typically well-regarded organization – while allowing other, less reputable platforms to continue operating unchecked.
Despite these various missteps, one cannot ignore the positive aspects of Coinbase’s past performance. The company’s CEO, Brian Armstrong, has proven trustworthy in his handling of customer funds – a quality that may seem insignificant but is often hard to come by in the volatile world of cryptocurrency. Because of this, many users have had a relatively safe experience with the platform, even if it isn’t perfect.
However, as Coinbase ventures into the realm of international exchange, it takes on the appearance of its less-trustworthy competitors. The absence of an app or website for the platform’s international exchange service suggests that it may be a political statement rather than a well-developed product. Should this be the case, it could rally support against the SEC’s crypto crackdown.
At the same time, it’s uncertain whether Coinbase will expand its international ambitions beyond this rhetorical threat. While there’s no indication that it will shut down its US services, the introduction of an offshore exchange with fewer regulations and greater volatility risk could very well damage the platform’s reputation and trustworthiness.
The ambiguity surrounding Coinbase’s offshore exchange raises pertinent concerns for its customers. The greatest risk lies in the possibility of the US-based exchange becoming financially entangled with its international counterpart, leading to heightened insecurity for both entities. Additionally, Coinbase may attract even more scrutiny from the SEC due to its offshore presence.
Regardless of these risks, it’s important to understand that Coinbase isn’t intentionally sabotaging customer trust; rather, Gensler’s attempt at protection is backfiring. The clash between protecting customers and maintaining a reputable crypto platform creates a web of uncertainty, and the question remains: how will Coinbase navigate and reconcile the opposing pressures of regulation and user satisfaction?
Source: Coindesk
