Tag Archives: Coinbase

Coinbase Faces Pump-And-Dump Accusations After Its Subsidiary Base Launched A “Content Coin”

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A Coinbase spokeswoman told Cointelegraph that “Base did not launch a token” after the blockchain’s X account was slammed for sharing a tokenized, tradable social post, Cointeligraph reported.

Crypto exchange Coinbase distanced its blockchain network Base from a memecoin it shared that saw massive backlash after the token rapidly gained, then dropped in value by millions of dollars.

Base posted to X on April 16 with an image promoting the network with its marketing tagline, “Base is for everyone,” It also shared a link to a token of the same name on Zora, a social network where users can make posts into tokens for others to speculate on.

In just over an hour after it was created, the Base is for everyone token hit a peak market capitalization of $17.1 million — then dropped nearly 90% over the next 20 minutes to a market value of $1.9 million, DEX Screener data shows. 

The token has since made a slight recovery and was trading around $7.7 million at the time of publication.

A Coinbase spokeswomen distanced Base from the token, telling Cointelegraph that “Base did not sell this token. Base posted on Zora, which automatically tokenize content,” the spokeswoman said.

The Block reported: Base, the Layer-2 network backed by crypto exchange Coinbase, is facing criticism from the crypto community for publicly endorsing a token that briefly lost most of its value shortly after launch. The token has since recovered nearly all of that value.

Earlier on Wednesday, Base posted, “Base is for everyone,” on Zora, an onchain social media network that automatically converts posts into tokens.

Then, at approximately 3:12 p.m., ET, the official Base X account promoted the token by uploading an image saying ‘Base is for everyone,’ followed by a reply post to the token’s page on Zora.

The official announcement from Base appears to have fueled the token’s rapid surge to a market capitalization of over $17 million. However, soon after its peak, the “Base is for everyone” token crashed about 95% in value, wiping out over $15 million, according to data from Dexcreener.

The initial collapse has triggered backlash from crypto users on X, some of whom label the token a rugpull and accused Base and Coinbase of endorsing a memecoin that would exhibit classic pump-and-dump behavior.

Bitcoin Insider reported: Coinbase’s Etherium Layer 2 (L2) chain, Base, has faced criticism for its content-tokenization initiative after its first auto-converted ERC-20 token on Zora pumped and dumped.

On April 16, Base’s simple “Base is for everyone” post on Zora was auto-converted into an ERC-20 token. 

Within minutes, speculative fever drove the token’s market capitalization to over $17 million, only to see it collapse by approximately 95%, wiping out more than $15 million in value in a classic liquidity trap.

In the hours following the crash, the token exhibited a remarkable recovery, rallying above $0.021 before slightly pulling back to around $0.011 against Wrapped Ethereium (WETH) at press time in Uniswap.

Coinbase Introduces The Stand With Crypto Alliance

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Coinbase has introduced the Stand With Crypto Alliance. It starts with a “TL;DR” (posted yesterday) that said: Today marks the launch of the Stand with Crypto Alliance, an advocacy organization focused on mobilizing the crypto community to directly engage in the legislative process. Join the Alliance to help secure the future of crypto in America by helping drive clear, sensible regulation.”

From the Coinbase blog:

With more than 50 million Americans holding a digital asset, crypto is bigger than Coinbase. Today, with the launch of the Stand with Crypto Alliance, the crypto community will be unleashed as a core constituency in the legislative process.

In particular, the Stand with Crypto Alliance will leverage the underlying technology of the blockchain to help organize the community into a powerful voice advocating for policies that will update our financial system and support economic empowerment. The Alliance is the nation’s first ever independent and unchain advocacy organization, powered by and for crypto supporters.

Building on recent historic, bipartisan legislative momentum in Congress, the Stand with Crypto Alliance is crypto’s first true grassroots movement that will be organized onchain. By providing a launch pad, the Alliance is mobilizing the full force of the decentralized crypto community to tell lawmakers: Recess is over. America’s crypto constituency is strong – and will be holding them accountable this fall when Congress votes on common-sense legislation to protect consumers and their right to crypto…

The Block reported that crypto advocated have ramped up efforts over the past few months to get legislation passed that would improve regulation of the crypto industry in the country. Some have criticized regulators, like the Securities and Exchange Commission, for what they call a regulation by enforcement approach.

Two bills are teed up to be voted on in the full House, including one bill that would direct regulators to create a clear path for how a digital asset can transition from being a security to a commodity. The other would create a comprehensive framework to regulate payment stablecoins. Both passed certain House committees last month.

CNN reported that the Stand with Crypto Alliance’s primary mission is to mobilize support for legislation that would create a US regulatory framework for digital assets – something of a sore subject in the feud between crypto advocates and US regulators, who have fundamental disagreements about how the industry should operate.

According to CNN, a central sticking point is the question of how crypto tokens should be regulated. The Securities and Exchange Commission, Wall Street’s top cop, contends that most crypto products are investment contracts and therefore fall under its jurisdiction – an argument the crypto industry is fighting.

CNN also reported that crypto adoption has been growing, though it remains far from the mainstream and still lacks obvious use cases for most people. The promise of crypto, broadly, is a world in which financial transactions can be executed instantly, free of charge. Advocates envision blockchain, the infrastructure on which crypto is built, as the future of all global finance.

In my opinion, it seems unlikely that the U.S. Securities and Exchange Commission will accept the Stand with Crypto Alliance. CNN reported that in June, the SEC escalated its enforcement campaign when it sued both Coinbase and Binance, the world’s top two crypto exchanges, saying the companies are illegally selling securities on unregistered exchanges.

Coinbase To Fully Sunset Bitcoin-Backed Loan Program

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Coinbase will shut down the Borrow program for retail customers that enabled them to obtain cash loans using bitcoin as collateral, The Block reported.

According to The Block, in May, Coinbase said customers would no longer be able to take out new loans with Borrow. Now, the company says loan holders have until November 20 to pay any outstanding balances or the crypto exchange will sell the bitcoin collateral to close the loans, according to an email it sent to customers that was seen by The Block.

“We have decided to fully close Coinbase Borrow for retail users effective November 20, 2023, in order to focus our resources on the products and services that our customers care about most,” a Coinbase spokesperson told The Block. “We have notified impacted loan holders and are taking extra measures to ensure a smooth transition for them, including providing a four month loan repayment period and access to prioritized support through Coinbase One.”

Coinbase provided a Help article with questions users were asking. Here are a few of the questions:

What happens if I don’t pay back my loan by the due date?

If you have not repaid your loan by the due date we will sell your BTC collateral to pay back the outstanding loan. We will wave the 2% liquidation fee in this case. The liquidations will take place over 5 days, by gradually decreasing the LTV ratio at which we will liquidate at. This will enable us to minimize slippage of any BTC sell orders by spreading them out over time. You will receive an email notifying you of all liquidations. These may be partial liquidations of your collateral. Once your loan account is closed, you will receive a confirmation email.

Will my interest rate be impacted by this news?

No, your interest rate will remain the same over this time.

CoinDesk reported that Coinbase announced in May that it was no longer allowing Coinbase Borrow customers to take out new loans.

The California-based exchange has been under increased scrutiny by U.S. regulators, specifically the Securities and Exchange Commission (SEC), for its operations in the U.S., and has been doubling down on its businesses elsewhere.

Crypto Briefing reported that Coinbase Borrow was once a significant part of Coinbase’s portfolio. Coinbase Borrow had enabled users to secure fiat loans of up to $1 million, using up to 40% of their Bitcoin holdings as collateral. The service carried an annual interest rate of 8.7%

According to Crypto Briefing, closing Coinbase Borrow comes amid regulatory scrutiny of the platform’s services. The SEC charged Coinbase in June for operating as an unregistered securities exchange and for failure to register the offer and sales of its crypto asses staking-as-a-service program. However, Coinbase has not attributed the SEC charges with the end of its Borrow program.

In my opinion, CoinBase appears to be reaching out to customers who were using Coinbase Borrow to let them know how much time they have to pay back their outstanding loan. It seems like the company’s help page clearly explains the rate at which Coinbase will liquidate a borrower’s bitcoin. That’s better than expecting borrowers to pay back the loan all at once.

Coinbase Warned By SEC Of Potential Securities Charges

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The Securities and Exchange Commission issued crypto exchange Coinbase a Wells notice, warning the company that it identified potential violations of U.S. securities law, CNBC reported.

According to CNBC, Coinbase shares fell nearly 12% in extended trading after the news broke on Wednesday, adding to an 8.16% drop during regular trading hours.

“Based on discussions with the Staff, the Company believes these potential enforcement actions would relate to aspects of the Company’s spot market, staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet,” Coinbase said in a regulatory filing. “The potential civil action may seek injunctive relief, disgorgement, and civil penalties.”

CNBC also reported that the SEC has ramped up its enforcement of the crypto industry, bearing down on companies and projects that the regulator alleges were hawking unregistered securities. Reports first surfaced of an SEC probe into Coinbase in mid-2022.

Coinbase posted some information on its website. Here is from the TL:DR (too long, didn’t read) section:

“Today, the SEC gave Coinbase a “Wells notice” regarding an undefined portion of our listed digital assets, our staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet after a cursory investigation. We are prepared for this disappointing development. We are confident in the legality of our assets and services, and if needed, we welcome a legal process to provide the clarity we have been advocating for and to demonstrate that the SEC simply has not been fair or reasonable when it comes to its engagement on digital assets. Rest assured, Coinbase products and services continue to operate as usual – today’s news does not require any changes to our current products or services.”

The Wall Street Journal reported that the Securities and Exchange Commission has told Coinbase Global Inc. that it plans to take enforcement action against the company, escalating its crackdown on digital-currency firms by targeting the biggest U.S. crypto exchange, Coinbase said Wednesday.

According to the Wall Street Journal, Coinbase said it received a letter from the SEC known as a Wells notice, in which regulators say they believe companies or individuals violated investor-protection laws. The notices aren’t final because the agency’s commissioners must authorize any lawsuits or enforcement settlements.

By warning Coinbase about a potential lawsuit, The Wall Street Journal reported, the SEC is setting its sights on one of the biggest names in crypto, a publicly traded company that has helped bring tens of millions of customers into the digital-currency markets since it was founded 2012.

A lawsuit would represent SEC Chair Gary Gensler’s biggest step to assert his agency’s jurisdiction over crypto. If Coinbase prevailed in a lawsuit, it would embolden the crypto industry’s claims that Mr. Gensler has overreached and that virtual currencies shouldn’t be subject to U.S. securities laws.

TechCrunch reported that in response to receiving a Wells notice from the FTC, Coinbase’s CEO Brian Armstrong struck a confident posture, tweeting that his company is “right on the law, confident in the facts, and welcome the opportunity for Coinbase (and by extension the broader crypto community) to get before a court.”

In a separate tweet, Armstrong wrote: “Two years ago the SEC reviewed our business in detail and approved Coinbase to go public. Our S1 clearly explained our asset listing process and included 57 references to staking. Coinbase runs a rigorous asset review process and has rejected more than 90% of assets that have applied to be listed on the platform.”

It is unclear to me exactly how this particular situation will end up. I suppose there will eventually be an announcement if something changes.

Coinbase Now Supports Ethereum

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Ethereum logoIf you think the world of cryptocurrency is limited only to Bitcoin, you are mistaken. There are a number of other digital currency systems currently in operation. One of these is called Ethereum, which is self-described as:

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.

These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middle man or counterparty risk.

Ether is the appropriately named currency of the Ethereum network. Cryptocurrency trading company Coinbase recently added support for Ether. Coinbase users can buy, sell, and trade Ether directly from their Coinbase accounts:

In May, we added Ethereum trading on GDAX, our professional digital asset exchange. With the addition of Ethereum on Coinbase, consumers in 32 countries can acquire Ether and take part in an open financial system facilitated by Ethereum and Bitcoin.

Honestly, I don’t really understand any of this. But if you want to learn more about Ethereum, Coinbase has posted a helpful information page that may (?) provide some clarity.

Bitcoin Service Coinbase Adds Support for PayPal and Credit Cards

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Cornborse logoBitcoin, the cryptocurrency that started out as a technological curiosity, has grown rapidly in the last couple years. Bitcoin adoption has been on the rise, and this has prompted the development of tools and services that help Bitcoin users convert their digital money into real-world cash. Coinbase, one of the larger Bitcoin players in the market, described itself from the beginning as a “PayPal-like” service, where users could log in and convert Bitcoin to cash, or vice versa.

Expanding its efforts to make Bitcoin exchanges even easier, Coinbase recently announced it will be adding support for PayPal and credit cards. From a Coinbase e-mail sent earlier this week:

One of our objectives at Coinbase is to add as many funding mechanisms as possible to make exchanging digital currency easy. As a step in that direction, Coinbase now accepts PayPal (for bitcoin sells) and credit cards (for bitcoin buys).

It’s worth noting that Coinbase isn’t using both of these new services for everything. As the e-mail states. Coinbase users will be able to use PayPal when selling Bitcoin, and they’ll be able to use credit cards for Bitcoin purchases. Previously, Coinbase only conducted transactions thru registered bank accounts.

These new payment systems are currently in beta, but they are accessible to most Coinbase users.

Coinbase and Shift Launch Bitcoin Debit Card

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Shift debit cardBitcoin. It’s the cryptocurrency some of us love, and some of us hate. It’s demise is being constantly predicted by tech pundits. Yet, it continues to endure. Despite what the naysayers think, there are plenty of companies trying to find ways to expand the reach of Bitcoin. Two such companies have now teamed up to release a new Bitcoin debit card.

Bitcoin exchange Coinbase recently joined forces with payment processor Shift. Together, they’re launching a Bitcoin debit card that carries the Visa logo:

Whether your currency is new or old shouldn’t matter. Bitcoin is now accepted online and offline at over 38 million merchants worldwide. Case closed.

The process is fairly simple. Load some Bitcoin into your Coinbase account. Sign up for the debit card thru Shift and then link the two accounts. Once everything’s done, you can now pay for virtually anything with Bitcoin where Visa debit cards are accepted.

If you’d like to make it easier to spend your own Bitcoin like “real money,” keep in mind that the Shift debit card does carry some fees. For example, there’s a $10 fee for the issuance of a plastic card (which also goes for replacement cards), there’s a $2.50 fee for using the Bitcoin card at an ATM, and a 3% fee for all international transactions. However, there are no annual fees or fees on domestic transactions. However, both Coinbase and Shift reserve the right to start charging fees on domestic transactions in the future.

You can learn more about the new Bitcoin debit card at the Coinbase blog.