• CoinStic
  • Posts
  • Coinbase Is Building a Trade Surveillance Program to Monitor Crypto Transactions

Coinbase Is Building a Trade Surveillance Program to Monitor Crypto Transactions

July 04, 2018

Coinbase is building a new system known as the Coinbase Trade Surveillance Program. It will attempt to identity any malicious or unusual trading activity.

In the past few months, Coinbase has been developing a suite of products for institutional investors, including Coinbase Custody, Coinbase Markets, Coinbase Institutional Coverage Group and Coinbase Prime. The products are intended to “unlock $10 billion of institutional investment money.” To be successful in its ambitions, Coinbase will have to make every effort to assure elite investors executing large trades that the exchange has taken measures to prevent wash trading, spoofing, pump and dumps and other schemes commonly associated with cryptocurrency and commodity market manipulation.

The new surveillance program will be led by Peter Elkins, a former executive at the New York Stock Exchange, reports Business Insider.

Gemini began a similar initiative in April when it partnered with Nasdaq to monitor its marketplace. Nasdaq’s SMARTS Market Surveillance technology is being used to monitor activity across all of Gemini’s trading pairs. The tech is also being used by VCTRADE, a new cryptocurrency exchange that was just launched by Japan’s SBI Virtual Currencies.

Coinbase is among four major exchanges that were reportedly served subpoenas by the Commodity Futures Trading Commission (CFTC) in connection with possible market manipulation that led to distorted Bitcoin and cryptocurrency prices in December 2017 when CME Group launched Bitcoin futures trading.

Coinbase’s new program is another sign of the growing maturation of Bitcoin and cryptocurrencies. Exchanges are preparing for institutional investors in a number of critical ways: software development and infrastructure to handle a large influx in trading volume; regulatory compliance to combat fraud and address clear frameworks for AML/KYC requirements; surveillance mechanisms that can prove cryptocurrencies are not controlled by pump-and-dump groups, bad actors or other coordinated efforts; security measures to prevent exchange hacks; and stablecoins, such as Circle’s USDC, that are pegged to the US dollar to reduce market volatility.

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.