Coinbase Mouse Warehouse Suspicion

The repeated occurrence of rat warehouses reflects that Coinbase has experienced serious internal control problems in the currency listing process.

Behind the frequent occurrence of rat warehouses

For a long time, Coinbase has been synonymous with compliance and self-discipline in the cryptocurrency industry, but in recent months, Coinbase’s image has almost been subverted.

The reason for this is that Coinabse’s listing of new coins has repeatedly appeared in rat positions, that is, a few days before the official announcement of Coinbase’s listing, there was an unusually large increase. According to the observation of the chain catcher, more than half of the coins listed on Coinbase this year have experienced the aforementioned phenomena to varying degrees. For example, the two new coins, ACH and PLA, which have been launched recently, had their prices increased by nearly three times in the week before the news was announced. Nearly 4 times, currencies such as MASK, which went online in July, also doubled a few days in advance.

The repeated occurrence of rat warehouses reflects that Coinbase has experienced serious internal control problems in the currency listing process.

As the leading cryptocurrency exchange in the industry, Coinbase pursued a “precise and beautiful” listing strategy before March of this year, basically only listing more mainstream currencies with high industry recognition and a long listing time, such as those launched in 2020. SNX, ROSE, REN, OMG, MANA, etc., also rarely experienced the abnormal phenomenon of early rise.

Before Coinbase was officially listed on April 14 this year, Coinabse only launched 11 new currencies in the previous three months, and only 6 new currencies were launched in May when the market was still good, but since June, Coinbase’s listing frequency has entered the Great Leap Forward phase, with 10 new currencies launched that month and 12 new currencies launched in the first half of August. In contrast, Coinabse will only launch less than 20 new currencies in 2020.

Coinbase Mouse Warehouse Suspicion

Number of new coins listed on Coinbase every month this year

Behind the substantial adjustment of the currency listing strategy, it may be driven by the performance pressure of Coinbase after entering the capital market. On April 14 this year, Coinbase landed on the New York Stock Exchange under the halo of the “first share of the cryptocurrency exchange”. The opening market value was close to US$90 billion at one time. %, which makes early investors who bought Coinbase shares huge losses.

The main reason for the decline in Coinabse’s stock price is the sharp decline in trading volume. According to Coinabse’s first quarter financial report, revenue from transaction fees accounted for 85.5% of total revenue, and the dominant position is very obvious. The decline in trading volume will inevitably lead to a further decline in Coinbase’s revenue, which will have a negative impact on the stock price.

In the latest quarterly financial report, Coinbase also publicly stated that due to the decline in asset prices and volatility levels, data such as the number of retail monthly trading users and total trading volume may decline in the next few months, warning investors.

Therefore, in the absence of a significant recovery in market enthusiasm, in order to further increase transaction volume and corresponding fee income, Coinbase needs to list more new currencies to stimulate users’ enthusiasm for transactions. At the end of June this year, Coinbase founder Brian Armstrong publicly stated that all legal and viable cryptocurrency assets will be listed. “We are asset agnostics because we believe in a free market and consumers should have the right to choose in the crypto economy.”

In this context, Coinbase’s listing review has become more relaxed. In June of this year, Coinbase also announced that it would launch DOGE and SHIB, two meme currencies with huge community traffic but lacking technical content, especially the latter, which once surprised the crypto community.

It is also from June that Coinbase’s listing frequency has accelerated sharply, and the listing team is also expanding accordingly. However, the situation in the rat warehouse has proliferated at the same time, reflecting that Coinbase’s internal control construction has not kept up with the pace of its listing. The confidentiality mechanism has not been implemented in place.

At present, the phenomenon of Coinbase’s rat warehouse has almost been regarded as an “open secret” by members of the domestic and foreign crypto community. Criticism is also spreading rapidly, making Coinabse’s reputation as the most compliant exchange in the industry a serious blow. At the same time, this phenomenon has also formed unfair competition in the crypto market, deteriorating the trading ecology of the crypto market.

Coinbase Mouse Warehouse Suspicion

Discussion in a Telegram community

“The rat warehouse phenomenon will reduce the credibility of the exchange, and users will be hurt because of the high price of the order.” DAO Square co-founder Dashuo Xianglian catcher said, “The harm to the industry is in supervision, and excessive manipulation will be granted to regulators. The handle will also bring bad feelings to the outside world, especially the unself-disciplined behavior of the head exchange.”

Potential

So, what are the possible causes of problems in Coinbase’s rat warehouse phenomenon? Is Coinbase’s main action evil? After various interviews, the chain catcher summed up three potential possibilities.

The first possibility is that Coinbase insiders actively engage in insider trading or leak relevant information to stakeholders. This is the most common possibility of the rat warehouse phenomenon. Since the Coinbase listing and listing time are all responsible for the exchange, only insiders know the accurate information best, and there is completely room for insider trading operations.

The second possibility is that Coinbase was leaked by the project staff after communicating with the project party about the listing. In June of this year, Coinbase founder Brian Armstrong said on Twitter that he is interacting and responding to many asset issuers. Then, in the process of communicating with the project party, Coinabse may be notified of the listing information in advance by the project party personnel, and then proceed. Corresponding insider trading operations.

“There is a need for multi-party communication before it is put on the shelf, and the project will be ready to be put on the shelf, and major progress will be disclosed to cooperate with the market.” Dashuo said.

The third possibility is that the Ethereum address of the relevant person’s address on Coinbase has been leaked, and a large-scale rat warehouse phenomenon has formed after the outside world traces its address information. According to the information provided by an investor to the chain catcher, an address starting with “0xfA09” will repeatedly purchase the corresponding tokens in small amounts and recharge to the official Coinbase address one day before Coinbase announces the listing information. It is suspected that Conibase tested it in advance. Recharge and withdrawal function.

Coinbase Mouse Warehouse Suspicion

Coinbase Mouse Warehouse Suspicion

The ACH and RLC transaction information of this address are both nearly a week earlier than the official news

From STORJ, CRV, etc. in March, to RLC, MIR, etc. in May, to the recent ACH, PLA and other currencies, the address has all small purchases and transfers in Uniswap in advance, and these tokens are in advance The rising time point is also very close to the operating time. However, in the last two coin listings on Coinbase, the address did not perform corresponding operations, and perhaps the official has discovered a loophole.

This type of behavior may not have been actively leaked by Coinbase, but objectively it is still due to the negligence and negligence of the internal control of Coinbase. Knowing that the rat warehouse is getting worse, there is still no relevant chain that may cause this phenomenon. The address was changed, and no action was taken until recently. For this situation, Coinbase still needs to take the main responsibility.

How to solve the problem

In traditional financial markets, the rat warehouse phenomenon has long been the target of the regulatory authorities. Since all investors invest in real names, the regulatory authorities can retrieve the identities of large purchasers involved in the abnormal stock price rise, and then conduct social relations investigations on the identities of these purchasers and the identities of insiders, and Retrieve related chat records to verify whether there is a rat warehouse phenomenon. Once verified, insider traders are often fined huge amounts.

However, in the cryptocurrency market, there are currently very few regulatory agencies that supervise the listing of cryptocurrencies in their country. At the same time, cryptocurrencies are often listed on many different exchanges, including decentralized exchanges that do not require identity authentication. , Leaving a lot of operating space for insiders.

” Avoid rat warehouses can only rely on the party in power to strengthen self-discipline or be forced by supervision.  ” Dashuo said.

If the rat warehouse phenomenon continues, it will inevitably cause irreversible damage to Coinbase and even the industry’s image. Coinbase has the responsibility to resolve the problem as soon as possible and promote the formulation of industry norms and related systems.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/coinbase-mouse-warehouse-suspicion/
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