Coinbase CEO responds to questions about listing of questionable tokens, insider trading allegations! Issues also found in newly launched NFT marketplace.

Coinbase has been in the midst of constant controversies recently, not only facing allegations of insider trading but also having many anticipated listings being mocked as "shitcoins." Today, its CEO Brian Armstrong released an article stating that they will address these issues promptly and come up with solutions.

Issues Criticized by Coinbase

Currently, the two major issues that Coinbase is most criticized for are:

1. What are the standards for listing assets?
2. Suspicions of insider trading, as many people benefit from purchasing future listed coins in advance.

Coinbase Does Not Deliberately Select

Regarding the first issue, Brian Armstrong stated that they are not investment advisors, so they avoid engaging in the business of picking winners and losers, meaning selecting the coins to list. Therefore, all listed coins must meet minimum requirements and undergo tests for legality, security, compliance, and more.

The review and listing process is usually strict and time-consuming. However, due to technical details, some assets are easier to review and list than others. For example, ERC-20 tokens are technically easier to evaluate and integrate, making the process quicker. Conversely, emerging public chain coins may take more time due to their complexity.

"To some, we may look like we are picking our favorite coins. But in reality, we review assets as quickly as possible and list everything we can, as long as we believe it is safe and legal. We believe the market will assign value over time," said Brian Armstrong.

Strong Measures Against Insider Trading

Moving on to the second issue, Brian Armstrong acknowledged that some market participants use on-chain data to detect when Coinbase is testing new asset integrations, or judge which assets have been allocated but not officially listed based on different responses from the Coinbase API.

Although this data is public, not everyone knows how to access it, so eliminating this information asymmetry is something Coinbase must address. Furthermore, if any Coinbase employees are found leaking internal information, they will be immediately dismissed and reported to the relevant authorities.

In this regard, Coinbase will collaborate with external law firms to analyze and track trading behavior through on-chain data to identify any correlation between internal employees and front-running traders.

Future Quarter Plans

To systematically address the above issues, Brian Armstrong shared some plans that will be implemented in the future:

1. Only Announce After Confirmation of Listing:
   In the future, Coinbase will not announce potential listings of coins; announcements will only be made when the listing of that coin on Coinbase is confirmed.
2. Develop New Labeling Features:
   Similar to the current "Experimental Assets" label, there will be more different labels in the future, such as "Newer Assets" or "Less Vetted Assets."
3. Asset Ratings and Reviews:
   Similar to Airbnb, Uber, and Amazon, ratings and reviews can also create additional consumer protection in cryptocurrencies. Coinbase will open up this feature in the future so the community can share more information about assets.
4. Investing More Resources in Asset Screening and Detecting Front-Running:
   Coinbase will continue to enhance its ability to evaluate assets and improve the speed of delisting bad assets.

Suspicious Assets Listed on Coinbase NFT Market

Before the above issues are resolved, some minor issues have arisen in the recently launched NFT market by Coinbase. Perhaps it is still in the testing phase and has not perfected its asset review function.

Currently, the least expensive Bored Ape Yacht Club (BAYC) ape on the market is BAYC #1590 priced at 148 ETH. However, this ape cannot be traded on OpenSea due to potential hacking activities associated with it.

The price of this ape is slightly lower than the floor price of 152 ETH on OpenSea. If investors are lured by its price, they may end up purchasing illicit assets.