San-Francisco based cryptocurrency exchange Coinbase has listed core principles that will help with the adoption and growth of its institutional investment services.
Guidelines to help market participation
The guidelines were revealed in a blog post that was signed by Coinbase Vice President and General Manager Adam White. The exchange stated that these principles dubbed ‘North Star’ will form a framework which will aid market participation experience on the platform.
The creation of the guidelines is to ensure that there is fairness, security, transparency, access to all participants, high-quality infrastructure and processes.
It will also ensure that users are protected from malicious activity and are provided with all the necessary information.
Fairness, security, and transparency a priority for Coinbase
Adam White stated that Coinbase is working hard to ensure fairness on the platform. They are looking to do that with the help of a Market Operations team. The team will be tasked with actively monitoring markets.
The team will conduct similar surveillance practices as tier one global exchanges. Some of the functions of the team includes actively looking out to catch suspicious trading behavior. They will also be tasked with stopping and reestablishing liquidity when needed.
To ensure that this happens smoothly, Coinbase has pledged to provide institutional grade infrastructure and processes. This will lead to reduced risk for investors in the areas of cybersecurity, compliance, onboarding and operating standards.
In addition to all these, Coinbase has revealed that it will commit to regular third-party audits while also offering custody services using high-security cold-storage techniques. This is to ensure customer security.
In terms of transparency, equal treatment and access to all needed information at all times is what Coinbase is looking to offer. The exchange will create a rulebook solely developed to cater to the unique structure of the cryptocurrency market.
According to the blog post, the exchange added that it will provide public trading rules and policies that are fairly applied to all market participants, publish transparent trading fees and incentive programs.
They will also communicate market capabilities such as order minimums/maximums, execution options, trading volumes, and maintenance schedules clearly to its users.
An ongoing, independent third-party audit has been implemented to ensure that they comply with regulations and industry standards,
The cryptocurrency exchange further noted that its institutional services will ensure that they make public all market access methods. Their documentation and distribution of market data will also be consistent and fair.
Coinbase will partner with other industry players when necessary to ensure that its customers continue to enjoy the benefits that crypto assets have to offer.
Listing of assets will be transparent
The blog post clearly explained the exchange’s plan towards ensuring complete transparency in the process of asset listing. This is particularly important considering the fact that ‘Coinbase Effect’ has been scrutinized recently by some, accusing Coinbase of manipulating the market.
The exchange stated that:
Strict, transparent adherence to a transparent listing process, which considers factors such as sophistication and security of technology, governance processes, market demand and regulatory considerations, among others. Every new asset will be announced in a transparent and consistent way, ensuring equal information sharing across our customer base.
The listing of these guidelines comes at a very important time for the exchange as the wider market gets ready for the entry of large institutional investors. Transparency and security are key issues that all crypto exchanges need to look into and address any failings.