Content Creators on YouTube, Twitch, and Wikipedia Can Now Accept Ripple (XRP)

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Content creators on the internet will now be able to accept payments in XRP tokens directly from their users.

The tipping-for-content has become possible because of Coil, the brainchild of Stefan Thomas, the former CTO of Ripple Labs. The San Francisco company has launched the beta version of its browser extension app of the same name, which allows users to tip content creators directly via XRP tokens. While the concept is arguably borrowed from Changetip, a now-defunct bitcoin tipping app, Coil somewhat has established its advancement by posing itself as an alternative to today’s ad-supported web.

“For decades, people have discussed the potential of micropayments to support content creators that would move us away from the broken ad-supported web,” Thomas said. “Others have created subscription services that bundle content. But micropayments and subscriptions have always been built as closed systems, which fail to capture the huge variety of content on the web.”

Coil is actually the first when it comes to paying out websites using Web Monetization, an Interledger-powered standard that would enable browsers to pay websites. Towards that goal, Coil will be compatible with some of the biggest names in the web industry, including YouTube, Wikipedia, Twitch, Internet Archive, and Beat, for starters.


The Coil launch packs a lot of possibilities for future adoption, specifically in the case of subscription-based content. Discussions on various online forums are filled with references to websites that offer content for monthly subscriptions. These subscriptions allow users to access unlimited content on the site. However, the fact remains that users seldom utilize the entire package. The only solution proposed to tackle the issue is pay per view.

Coil offers a use case. The browser extension could promise to unleash web content for XRP, be they text, video, sound, or other.

“Think Spotify, think Uber, think ads on the web – or no more ads on the web,” a Redditor commented while referring to Coil’s additional features, which include paywall bypassing, and lesser ads display. “This is just the beginning of Internet of Value! COIL is big, COIL is huge – Coil deserves as much attention as we are giving Ripple!”

Coil could lock horns with Brave on micro-payments. The latter is not an extension but a full-featured web browser in itself that somewhat offers the same services as Coil via its BAT tokens. Brave already has an exception user-base of over 4 million active individuals. The browser also provides privacy and ad-blocking to further its attractiveness to an average crypto user. The team behind the project expects to attract over 5 million users by the end of this year.

The crypto market is still young, and there is room for innovation for every project. Coil, despite its celebratory launch, could up its game with future updates. So far, the micropayment browser app could at least boost the bullish potential of XRP tokens, which are already rising high amid a strong buying sentiment phase.

In a supernormal rally that almost lost ethereum its silver spot, ripple (XRP) gained about 100 percent in a week.

The maximum difference in XRP’s market cap between the week’s lowest and highest level turned out to be almost $19.8 billion. That’s nearly a 184 percent jump. True, the valuation dropped after establishing the weekly peak, but the extent of the drop was low. During the uptrend, the market cap of ripple once even went above the market cap of ethereum. For a short period, XRP was the new silver to bitcoin’s gold. However, an imminent sell-off near peak reversed the XRP trend and brought it back to the third position.

But, what were the reasons behind the XRP’s bullish behavior? So far, no technical aspects could explain it, so CCJ dug into the fundamentals instead. And, to begin with, we found several that correlated with the XRP rally.

Fundamental Factor 1: Launch of xRapid Solution

Ripple Labs’ long-anticipated cryptocurrency service, dubbed xRapid, is heading for a commercial launch as soon as next month. The commercial payment service allows financial institutions to use XRP tokens for conducting cross-border transactions. So far, xRapid has not bagged many major partnerships from mainstream financial institutions, in contrast to RippleNet, Ripple Labs’ XRP-negated blockchain project for enterprises, that has a top-ten US bank lined up for integration.

The news of the xRapid launch surfaced first on CCN on Sept. 17, when XRP was trending sideways against USD. The value began trending upwards just at the beginning of the next day’s session, establishing a new intraday high towards $0.33990-fiat from the low of 0.26627-fiat.

Fundamental Factor 2: Coil and PNC Announcement

An announcement linking XRP with the web’s biggest names, including Wikipedia, Twitch, and YouTube, came on Sept.  20 from Coil. The San Francisco company, headed by former Ripple Labs CTO Stefan Thomas revealed details about their web monetization app that would allow content creators to earn tips via XRP tokens. Overall, the news brought a likely user-adoption case for XRP in limelight, while it was already riding high on previous bullish sentiment.

On Sept. 20, another Ripple-centric news that surfaced on the web was PNC-related. The $380 billion US banking giant joined RippleNet to enable near-instant money transfers with on-demand liquidity and end-to-end tracking on a blockchain. The partnership, however, does not guarantee a boost in XRP adoption. Nevertheless, it positioned XRP’s largest holder, Ripple Labs, as a company with a big future ahead — something that could have excited the traders speculating on XRP.

The Concluding Fundamental Factor: FOMO

When an asset keeps breaking its crucial resistance levels one after another, day traders mainly go long on their positions in “fear of missing out” on profits. XRP traders seem to have undergone a bullish transformation after witnessing an impressive rally after weeks of a downward trend. Ripple has brought back the buying sentiment in the market, and all the top coins went green as it mooned.

XRP/USD formed higher highs towards 0.79162-fiat. Since then, the pair has corrected almost 27 percent. Those who entered long anywhere below the current value could attempt to exit their positions on a decent profit, causing a minor sell-off towards 0.54490-fiat, the support level from late May. A breakdown from there could push XRP/USD further down towards 0.45627-fiat, the support from early April that influenced a sharp rally towards 0.96635.

While returning to its bearish sentiment, the pair would need to invalidate the two support levels mentioned above. The launch of xRapid next month, meanwhile, would promise a positive buying scenario overall.

The U.S. Navy Naval Air Systems Command (NAVAIR) is currently exploring the blockchain technology for tracking aviation parts throughout its lifecycle, according to its press release.

For NAVAIR, changing the way it currently tracks the lineage of parts is a critical step into reducing the high costs it takes to operate a military aircraft. The current process involves writing down details of the parts on a Scheduled Removal Component Card—used for recording aviation parts information— before manually entering it into a database.

The Navy has partnered with Indiana Technology and Manufacturing Companies (ITAMCO) under the Cooperative Research and Development Agreement, NAVAIR hopes to get “access to cutting-edge chain code” as well as innovative protocols that can “recall large data sets” swiftly and securely.

ITAMCO developed SIMBA Chain, a blockchain as a service platform which allows for tracking secure messages using blockchain for the United States military.

According to the press release, ITAMCO will help the Navy understand how to leverage the distributed ledger for its operations and in return, the startup will get to understand how the Navy operates so it can create a “conceptual architecture” for what a “connected and visible supply chain” could look like when fully developed.

Developing such a platform for the NAVY will not be easy, and one of the hurdles that have to be scaled through is “information assurance and accreditation” for a distributed information system which will depart from the current centrally controlled database architecture. There is also the issue of cyber-security, as the connection of all the nodes supporting the supply chain increases the vulnerability of the system. NAVAIR is bringing the experts in early to create a conceptual architecture, as it hopes to understand the risks and reward that comes with a connected distributed system.

Navy’s Fleet Support Team believes the blockchain can help the Naval Air mission focus more on safety and at a lower cost than it currently can with the old system.

George Blackwood, Logistics Management Specialist F/A-18A-E & EA-18G ISSC North Island Fleet Support Team, was ecstatic about the partnership. He said:

“The Navy is very excited to work with ITAMCO on this cutting-edge technology to improve visibility, anti-tampering, traceability and data transparency in the NAVAIR supply chain.”

As Canada prepares to legalize recreational marijuana next month, the impact this will have on online drug marketplaces has remained unclear.

Consequently, the Department of Public Safety Canada is looking to commission a study that will shed light on the cryptomarkets – online drug marketplaces that rely on the TOR browser and cryptocurrencies – with regards to the North American country and its citizens. According to a tender notice published online, the study will focus on both buyers and sellers of cannabis on the cryptomarkets:

“The general goal of this project is to estimate the extent to which cannabis is illicitly bought and sold by Canadians on cryptomarkets, identify trends in the buying and selling behaviours of Canadian cryptomarket users, and discuss the policy and law enforcement implications of cryptomarkets within a Canadian context following legalization.”

Thorough Examination

Specifically, the study will be required to estimate the volume of cannabis sold by Canadian vendors to Canadian buyers in 2017 as well as build buyer and vendor profiles. Additionally, comparisons between the dark web drug market with the traditional drug distribution market will be required to be drawn while also determining the relationship between organized crime networks and cryptomarkets.

Per a report by the European Monitoring Centre for Drugs and Drug Addiction, Canada is one of the leading countries in the world in the illicit trade of drugs on the internet. With cannabis making up 33% of all the online drug transactions, Canada is hoping to identify the kind and extent of impact the legalization of recreational pot on October 17 will have on the cryptomarkets.

“One of the primary aims of cannabis legalization and regulation is to reduce criminal involvement in the cannabis market,” Public Safety Canada’s tender notice further adds. “It is therefore important to examine the current state of illicit cannabis markets in order to assess any changes in such markets once cannabis is legalized.”

Getting High…

This comes at a time when the expected legalization move by the Canadian government is sending the publicly-listed cannabis stocks soaring to record highs as CCJ recently reported. The soaring stock prices of cannabis stocks saw some financial analysts equate it to the ‘bitcoin boom’ that was experienced towards the end of last year.

An example of a cannabis stock that appreciated drastically is the NASDAQ-listed Tilray which reached a market capitalization of over US$22 billion earlier this week after its shares rose to a high of US$263 in pre-market trading, marking a parabolic rise from its July listing price of US$17.

On Friday, Sept. a U.S. member of Congress announced that he will introduce three new bills aimed at supporting the development of blockchain technologies, as well as the use of cryptocurrency, within the United States.

Rep. Emmer: U.S. Must Support Blockchain Development

According to Rep. Tom Emmer (R-MN), the initiator of this bold move, the U.S. needs to pass favorable legislation to the burgeoning blockchain industry if it hopes to remain a leader in this space.

“The United States should prioritize accelerating the development of blockchain technology, and create an environment that enables the American private sector to lead on innovation and further growth, which is why I am introducing these bills.”

Overall, the new legislation will support the rapidly growing blockchain industry within the U.S. by providing clear and concise guidelines for investors companies, and businesses, as well as a safe harbor for taxpayers using cryptocurrency assets.

Rep. Emmer, who has just been named co-chair of the Congressional Blockchain Caucus, also added that, “Legislators should be embracing emerging technologies and providing a clear regulatory system that allows them to flourish in the United States.”

Emmer’s Three Pro-Crypto Bills

Emmer’s first piece of legislation is a House resolution to express support for cryptocurrency and blockchain technology. As mentioned, this and the other two bills are aimed at supporting the use and development of blockchain technology in the United States. According to the Emmer, and many other industry experts, the U.S. government cannot do anything to stop their development. Therefore, legislators should be stepping in to provide a clear, concise, and legal framework for their use within the country.

The second bill, the Blockchain Regulatory Certainty Act, confirms that certain entities such as cryptocurrency miners and multi-signature providers, who never fully take control of consumer funds, will not need to be registered as money transmitters. This is because they are only there to help validate the network’s integrity, by providing more security for those who use digital assets.

The final bill, the Safe Harbor for Taxpayers with Forked Assets Act of 2018, aims to address confusion surrounding how to report gains made as a result of cryptocurrency forks to the Internal Revenue Service (IRS). Previously, there was little IRS guidance on this matter, so the bill will be used to give taxpayers tight regulation about the use of forked funds. Furthermore, it will also protect individuals from facing fines until the IRS establishes some guidelines on how taxpayers are to report their digital assets.

Using candlestick formations in order to determine price movement from one direction or another is great for what it does within a more confined timeframe. The problem is, the level of detail that you get from candlestick formations is so granular, that it may be hard to determine the overall trend across the daily highs and lows of a particular cryptocurrency.

This is where moving averages come into play and why they’re one of my all-time favorite trading signals for both ease-of-use and reliability.

Moving averages will really help you break down the momentum of a particular crypto coin. These averages are represented by a simple line which gives an indication as to where a coins price was and is most likely going to be, in an easy-to-see format.

Let’s start off with one of the most basic moving averages…

Simple Moving Average

simple moving averages crypto markets tradingThis moving average, as the name implies, is a simple line that represents the closing price of a cryptocurrency, which is averaged out over a period of time.

In layman’s terms, you simply write down the closing prices for say the last 30 days, add them all up, and then divide that total by 30. This will give you the average of that particular number set.

The most common simple moving averages that you’ll read about are the 50, 100, and 200 day moving averages. Each of these three moving averages will show the momentum during their respective time period (50 days, 100 days, or 200 days).

The only weakness behind simple moving averages is its inherent simplicity, where the data points are assigned the same weight, which affects the outcome of each one equally. This means if you have a price that is severely out of range, compared to the other price points, this can skew the simple moving average line, which in turn can give you inaccurate results.

Let’s look at an example for context…

Say the first four days of price action was at $3, $4, $4, $5, and then a whopping $25. The simple moving average line would then be centered on the average of $8. As you can clearly see, this major movement in price tends to greatly disrupt the averages.

Don’t worry; I cover a strategy further down this guide utilizing the exponential moving averages alongside simple moving averages, that will help facilitate the correction of this issue.

For now, let’s discuss the 3 most common types of simple moving averages.

50 Day Moving Average

simple moving average trading crypto marketA 50 day moving average measures the short-term market confidence. This moving average is consistently used by swing traders, due to its accurate representation of the market during a 24 hour period.

When price action is above the 50 day moving average, this indicates that you’re in a short-term bull market. The opposite rings true for price action below the 50 day moving average. This would clearly indicate that you’re in a short-term bear market.

Also worth noting, when candlestick formations are moving between bullish and bearish sides of the 50 day moving average, this indicates a “ranging period” where the market is undecided where it wants to go. Trading during these ranging periods is much riskier than trading in a substantiated trend (bear or bull trend).

As you can imagine, trading alongside a trend is much more predictable than trading sideways where the market sentiment has yet to be determined.

50 day moving average trading cryptocurrency market
click to enlarge

What’s interesting about the 50 day moving average is that it’s sensitive enough to show large institutional buys or selloffs. These price movements are recorded more accurately on this shorter-term moving average.

100 Day Moving Average

This moving average is considered a medium-term momentum indicator. These are characterized by sharp changes or reversals in the market and tend to include large economic or political movements. You can expect the 100 day moving average to move opposite of the primary trend that follows the 50 day. Much like the 50 day moving average, prices above the 100 day moving average are more long term bullish and prices below this line are bearish.

200 Day Moving Average

As you might expect, the 200 day moving average is a crucial gauge for longer-term trends. This is what you would call the “big picture” or “birdseye view” on how a particular market is doing.

This moving average is not going to tell you where to place a buy or sell order on a day or swing trading basis, however it will let you know whether you need a hold on to a cryptocurrency for a while or if you should start thinking about exiting the market.

I typically use the 50/200 SMAs cross to get an overall feel for where the market is currently and the direction it will be headed when swing trading. I cover more on this strategy below under “The CCJ Moving Average Strategy”.

The Golden Cross

The Golden Cross is defined when the line of a short-term moving average crosses a longer-term line. This cross indicates that a bullish or bearish breakout is imminent. You can look at the cross as a warning of what’s to come (think red alert).

So for example, if you have a 50 day moving average cross over a 200 day moving average, this indicates that bearish sentiment is soon approaching. The same goes for bullish sentiment. If the 50 day moving average crosses under a 200 day moving average, this indicates that bullish sentiment will soon take over.

The reason I use the 200 MA as opposed to the 100 is due to the fact that there is a much larger separation between these 2 moving averages. The 50 and 100 MAs tend to overlap one another. 

It’s important to note that bearish or bullish sentiment is soon approaching once these two lines move closer together. You don’t always have to wait for a cross, but it is preferred for confirmation.

50 and 200 day simple moving averages trading crypto
click to enlarge

Next let’s talk about one of the most utilized moving averages for both day and swing traders alike.

Exponential Moving Averages

 This moving average, also known as EMA, is built upon a “linear weight” moving average. It includes an exponential multiplier which is calculated by a rather complex equation. No need to bore you with all the mathematical details. All you need to know is that it assigns more importance to recent price movements, thus allowing a trader to get a better idea of where price momentum is headed.

EMAs are much faster than simple moving averages (SMA) and will give you a rather quick indication as to when to enter or exit a trade. The advantage to this moving average is that it reacts much faster to price changes.

Swing traders typically use the 5, 10, 20, and 50 day exponential moving averages for their trades. The most popular being the 20 and 50 EMA crossovers which generate quick buy and sell signals. These are the moving averages that I tend to use for my daily trading as well as the 50 and 200 day SMAs.

The CCJ Moving Average Strategy

I’ve used a wide variety of moving averages during my long and arduous cryptocurrency trading career. The ones that I typically tend to rely on the most and have had the most success with are the…

  • 20 and 50 EMA
  • 50 and 200 SMA

I don’t recommend using these on time frames below five minutes. You can use one or both of these moving average pairs, however if I had to choose just one I would use the 50/200 SMA.

The 20/50 EMAs will show you where price movement is headed in the short-term. 50/200 SMA will show you where the price is headed on a mid-term basis, which is great to evaluate where overall sentiment is headed. It’s important to note that you can use the 50/200 SMA on the 15 minute timeframe and above. Anything below that can give you false signals.

Like always, a picture is worth 1000 words, so I’ll give you a few examples and setups of each.

simple moving averages confirmed reversal
SMA 1 hr timeframe click to enlarge
15 minuite moving averages for simple cryptocurrency trading
SMA 15 min timeframe click to enlarge

Let’s Wrap This Up…

Moving averages is one of the more simple strategies you can start utilizing today within your current cryptocurrency trading regimen. Whether you’re day trading, swing trading, or investing, you can use these moving averages to get a clear indication as to where the market is currently at and the sentiment it’s moving towards.

Using these moving averages in combination with indicators, candlestick formations, and charting patterns can provide you with a remarkable trading strategy as well as clear-cut entry and exit signals which will have you winning the majority of your trades.

As always, leave a comment below and let us know if you have any questions.

For more beginner level cryptocurrency trading guides, visit the Crypto Coin Junky trading page located here.

Good luck and happy trading!

Poloniex, one of the oldest crypto exchanges in the global market, has become a major digital asset trading platform once again after years of stagnation.

Until 2015, Poloniex was one of the largest crypto exchanges alongside Coinbase. It was the go-to exchange for traders investing in smaller trading pairs like tokens and alternative cryptocurrencies.

But, controversy around the legitimacy of the exchange and the operating team of Poloniex led the platform lose out in tight competition, falling behind Bittrex, Bitfinex, Binance, OKEx, Huobi, HitBTC, and many other major cryptocurrency exchanges.

Circle’s Acquisition Leads to Revival

In February, Circle, a cryptocurrency and blockchain company that raised hundreds of millions of dollars from large venture capital firms throughout the past few years, acquired Poloniex for over $400 million.

At the time, the acquisition of Poloniex was controversial, primarily due to the stagnation of the exchange and the emergence of new exchanges like Binance and Huobi that started to gain dominance over the market.

While the Circle team spoke highly of Poloniex and its core development team, the community was not convinced that the exchange should be valued at $400 million.

After a month and a half since the acquisition, in April, the Circle team stated that it made significant progress in rebuilding the exchange, especially the customer support side of the exchange. Prior to the acquisition, Poloniex had 159,000 pending customer complaints.

The build up of complaints about the platform and its operations largely affected the downtrend of the exchange. Subsequent to acquiring the platform, Circle immediately implemented a strong communication and technical support team. It worked.

Within seven months, Circle turned around Poloniex and allowed it to climb back to its previous position. It recently surpassed Bittrex in volume, becoming a top 20 cryptocurrency exchange in the market.

“When the Poloniex-Circle integration began in late February, together we faced a backlog of 159,000 customer issues. Over the past 6 weeks, we have resolved 76,000 of those issues and added 6 new agents to our support team. We have tripled the number of engineers working on our wallet infrastructure and streamlined the process for notifying engineering when technical support is needed,” the Circle team said in April.

What’s Next?

Based on the volume of Poloniex, it is quite evident that the exchange has shifted its focus from serving ERC20 tokens and less liquid assets to major cryptocurrencies like Ripple, Ethereum, Bitcoin, and Stellar.

In the upcoming months, as the market regains momentum and volume, Poloniex will have to compete against Binance, Huobi, OKEx, Upbit, Bithumb, Bitfinex and other leading exchanges that have loyal user bases and robust reputation.

Although the mid-term strategy the company will implement remains to be observed, the fact that large venture capital-backed companies have started to rebuild infrastructure in the cryptocurrency market, as seen in the Japanese market in recent months, is positive.

A “Flippening” has once again arrived in the cryptocurrency markets, but — much to the chagrin of ethereum investors — it’s not the one that ETH holders have long anticipated.

Bolstered by a seemingly-parabolic rally not seen since January, ripple (XRP) has managed to unseat ethereum as the second-largest cryptocurrency by market cap.

ripple price xrp ethereum
Source: CoinMarketCap

According to CoinMarketCap, XRP currently has a total valuation of $23.9 billion, placing it more than $400 million ahead of ethereum. The ripple price has risen an astounding 64 percent in the past day, capping off a week-long rally of more than 113 percent.

There’s no clear trigger for the XRP price rally, other than San Francisco-based blockchain startup Ripple’s recent announcement that XRP-based commercial blockchain applications will go live “in the next month or so.”

Commenting on XRP’s recent rally, Matthew Newton, analyst at eToro,stated that “the stars seem to have aligned” for the coin.

“Despite being one the most polarizing cryptos of them all, eToro customers can’t get enough of XRP at the moment; it has more exposure than any other asset on our platform. As we’ve seen in the past, the price tends to move in short, sharp bursts, picking up a lot of momentum when the hype builds. It remains to be seen how much further it could go.”

Ed Cooper, head of mobile at crypto-friendly fintech company Revolut, said in an emailed statement that it “remains to be seen” whether the rally will hold.

“The high transaction values, coupled with market sentiment following the announcement on Monday could indeed be the reason why XRP reached new highs, having gained nearly 50% in the last 24 hours. While this is great news for many crypto enthusiasts and especially for XRP fans, it remains to be seen if the bullish trend will prevail, given the current market conditions that have seen nearly all cryptocurrency losing around a great deal of their value since the beginning of the year.”

XRP briefly surpassed ethereum’s market cap in December and early January, when investor mania and the “Kimchi Premium” drove its price as high as $3.84 and made ripple the first cryptocurrency after bitcoin to achieve a $100 billion market cap. However, ethereum ultimately regained the silver podium, a position it has held throughout 2018 — until now.

U.S. lawmakers have called on the Internal Revenue Service (IRS) to issue clarified and “comprehensive” crypto taxation guidance, in an open letter submitted yesterday, September 19.

The letter was sent to acting IRS commissioner David Kautter by Congress members David Schweikert, Darin LaHood, and Brad Wenstrup, Kevin Brady and Lynn Jenkins from the Committee on Ways and Means.

It opens by calling attention to a prior letter sent by the representatives in May of last year, which had already questioned the agency’s lack of a comprehensive crypto taxation strategy. Since then, the lawmakers claim, “the IRS [has] continue[d] to expand its enforcement activities [but] without issuing any further guidance for taxpayers.

The representatives deem that the IRS has had “more than adequate time” to work through complexities after its preliminary rules were issued four years ago. These indicated that crypto would be treated as property for tax purposes in the U.S., and were issued in March 2014.

The lawmakers note that in September 2016, the Treasury Inspector General for Tax Administration had reported that the IRS crypto tax strategy was incomplete, and had already called for updated guidance at the time, further noting that other associations have since called on the agency to provide additional clarity for taxpayers. However, the lawmakers consider that:

“Despite the issuance of only preliminary guidance on this issue [back in March 2014], the IRS has made enforcement of this guidance a priority, undertaking robust enforcement actions on a number of fronts.”

As an example of the IRS’ robust enforcement actions to date, the lawmakers draw attention to the agency’s decision to summon records from American users of crypto exchange and wallet service provider Coinbase in July 2017, which has since seen a protracted legal battle set in.

The lawmakers argue that while the IRS has proactively continued to remind taxpayers of the penalties for non-compliance with its guidance, its failure to introduce a more robust taxation framework “severely hinders taxpayers’ ability” to meet their obligations.

The letter closes by stating that the representatives will be asking the Government Accountability Office to undertake an audit on the matter.

As previously reported, data released ahead of the close of the preceding tax year suggested that just 0.04 percent of tax filers were reporting capital gains from crypto investments to the IRS.

Cryptocurrency exchange operator Coinbase has denied that it engages in proprietary trading and that these activities account for a large percentage of the firm’s overall trading volume.

Yesterday an investigation into cryptocurrency exchange policies and operations, published this week by the New York attorney general’s office (OAG), found that proprietary trading, through which an exchange operates a trading desk that trades on its own platform against its customers, is common within the crypto industry.

Per the report:

“The OAG found that significant variation exists in the amount of trading activity attributable to those platform operators. Circle reported that it accounted for less than one percent of the executed volume on its platform Poloniex during the most recent time period reviewed. BitFlyer USA indicated that its own activity accounted for approximately ten percent of the executed volume on its platform. Another, Coinbase, disclosed that almost twenty percent of executed volume on its platform was attributable to its own trading.”

The OAG noted that, though this practice is also common within traditional securities markets, it raises “serious questions about the risks customers face on those platforms,” since it could mislead traders about the exchange’s true liquidity and hinder their ability to execute trades during periods of peak market volatility.

However, writing in a blog post published Wednesday, Mike Lempres, chief policy officer at Coinbase, said that the exchange operator does not engage in proprietary trading and that the volume cited in the OAG report stems from the company executing trades on behalf of its retail brokerage customers.

He explained:

“Coinbase does not trade for the benefit of the company on a proprietary basis. In order to provide an easy-to-use customer experience, Coinbase Consumer quotes a price and then quickly fills the order from our exchange platform (Coinbase Markets). This takes advantage of the liquidity provided by the entire Coinbase ecosystem.”

When customers use the company’s traditional brokerage platform, now known as Coinbase Consumer, they see a single buy and sell price for each of the assets listed on the platform, rather than a full order-book as they would see on a centralized exchange.

After a customer places an order through the brokerage, the company fills the order from Coinbase Markets, its centralized exchange platform, though this action is hidden from the client, who simply sees the funds enter or leave their personal wallet.

Lempres further clarified that Coinbase neither operates an in-house trading desk nor acts as a market maker, through which a firm places buy and sell orders to increase a trading pair’s liquidity.

He said, “The volume figure stated in the report has been misreported in the media as ‘self-trading,’ which is inaccurate. The figure represents customer-driven volume via Coinbase Consumer. Coinbase does not operate a proprietary trading desk, nor does it undertake market making actions.”

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