Proof of alignment. What we’ve already achieved to align… | by Coinbase | Jan, 2022


What we’ve already achieved to align ourselves with our prospects, and what we’re doing subsequent.

By Paul Grewal, Chief Authorized Officer

Coinbase is dedicated to offering a good, clear and equal expertise throughout our suite of buying and selling merchandise. We take a variety of steps to make sure this, together with:

  • We don’t coordinate asset itemizing choices with anybody circuitously concerned with our evaluation and itemizing course of. This contains members of our administration staff that don’t sit on our asset itemizing committee (the vast majority of Coinbase’s management staff doesn’t sit on our itemizing committee), our Board of Administrators, enterprise capitalists, or outdoors traders.
  • Coinbase Ventures has by no means offered tokens from investments that it has made, and is staffed by a separate staff with no affect over which property could also be supported on Coinbase platforms.
  • We have now no management over, or proprietary details about, the plans of early digital asset backers, together with their shopping for or promoting actions for property we checklist.
  • We’re regularly trying into further mechanisms to align ourselves even additional with our prospects, beginning with enabling customers to trace Coinbase’s personal portfolio of digital property for informational functions.

Coinbase’s purpose is to supply a good and environment friendly market. As talked about throughout our launch of Asset Hub, our purpose is to checklist each compliant asset doable. In our best world, Coinbase would merely checklist each asset that met the requisite authorized and cybersecurity requirements, whereas giving our prospects as a lot data as doable to make educated funding choices. Being listed on our trade wouldn’t be thought of an endorsement; it will merely be a sign that the asset had met our itemizing requirements.

The problem is that as a result of an asset itemizing may be time consuming each from a technical and authorized perspective, it’s nonetheless scarce; as a result of it’s scarce, it’s thought of beneficial; as a result of it’s beneficial, it’s thought of by some to be an endorsement. That is much like the dynamic that ensued round Twitter verification, the place what was initially merely an anti-impersonation measure inadvertently grew to become a standing image.

As a part of our dedication to transparency, we need to shed additional gentle on how our present itemizing course of works, in addition to sharing further data on the steps we take to make sure that our itemizing and ventures groups are saved fully impartial, and, lastly, supply some perception into how we take into consideration the crypto property we share on our company stability sheet.

First, as we’ve mentioned earlier than, right here’s how we function.

  • Coinbase makes itemizing choices by means of a proper course of run by a particular committee referred to as the Digital Asset Itemizing Group, which follows common procedures, that are documented in formal insurance policies, and which relevant regulators should evaluation and approve.
  • The Digital Asset Itemizing Group votes on what property may be listed, knowledgeable by a rigorous vetting/evaluation course of that evaluates property for compliance, authorized, and knowledge safety considerations.
  • The voting group doesn’t embrace Coinbase CEO Brian Armstrong or different Coinbase World Board members.
An instance of our disclosure assertion
  • The vote just isn’t impacted by whether or not Coinbase Ventures or our traders have a stake within the asset, and Coinbase Ventures is clear in disclosing our pursuits in initiatives.
  • Coinbase has a battle of curiosity coverage that forestalls board members or Coinbase staff from being concerned in an inventory determination the place they’ve a monetary curiosity.
  • The vast majority of property that the Digital Asset Itemizing Group critiques are submitted immediately by asset issuers by means of our Asset Hub portal.
  • This course of is strict, and the vast majority of property submitted for analysis are rejected.
  • Coinbase restricts all staff from buying and selling the tokens it’s contemplating for itemizing to verify nobody at Coinbase is entrance working property, even when they don’t work on our asset listings staff.
  • Coinbase doesn’t coordinate itemizing choices or timing with early backers of a mission (together with VCs) or in property being reviewed.
  • We have now no management over or proprietary visibility into the plans of early token backers (VCs, founding staff, and many others.) on their promoting actions.
  • As a result of buying and selling usually happens throughout many exchanges (not simply Coinbase), and since massive holders and even asset issuers are sometimes unknown, we do not need the power to play a task in any lock-up sort mechanisms.
  • Coinbase Ventures has by no means offered tokens from investments that it has made, nor does it have any affect over which property are supported on Coinbase platforms.
  • We’re long run hodlers of our investments. It might make sense to liquidate a few of our holdings sooner or later, however we don’t presently have any plans to.
  • Our Ventures and Listings groups function fully independently of one another, with no overlap in personnel or shared data.
  • Coinbase holds on our stability sheet the vast majority of the property that we help on our platforms, which helps be certain that our pursuits are aligned with these of our prospects.
  • Like our Coinbase Ventures investments, we’re additionally hodling these property with a long run view, with no current plans to promote.
  • Although it’s impractical to carry massive positions of some decrease liquidity property, we purpose to have some company publicity throughout the breadth of our supported property.

With that mentioned, we’re at all times taking a look at new methods to extra clearly present alignment with our prospects. Whereas the Coinbase Ventures portfolio is already public, and we’ve additionally revealed our materials crypto property held in our 10-Q, we plan to make our holdings much more clear.

Quickly we’ll share extra data publicly, with the purpose of creating our holdings much more apparent, by displaying (a) which property are at the moment held by Coinbase and (b) which property have been backed by Coinbase Ventures, whether or not they’re at the moment listed or not.

Now, we don’t declare that our portfolio is the most effective. Nor can we advise that you simply purchase it. However by making it much more clear within the consumer interface as to which property are Coinbase-held and Coinbase-backed, you may resolve whether or not or to not align your self with Coinbase’s crypto holdings. It’s also possible to select to pursue a totally completely different technique. And that’s our purpose: to supply a good and environment friendly market the place the members resolve.

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