Coinbase’s recent listing of 0x’s ZRX token has caused a lot of speculation and conflict of interest. This is due to the involvement of members and the events leading up to the listing of the ZRX token among four other potential tokens.
The conflict of interest arises as The Block, a news portal, confirmed a direct connection between the token listing framework in 2017 and an investment firm, Scalar Capital, which invested in the public sale of ZRX. ZRX was listed on Coinbase a month later.
Additionally, Linda Xie and Jordan Clifford, founders of Scalar Capital, were both former employees at Coinbase. Furthermore, Linda Xie is married to the co-founder of the 0x project, Will Warren. Three out of five advisers of 0x project were the employees of Coinbase.
The connection between Coinbase and Scalar capital is bridged by Maksim Stepanenko, an engineering manager at Coinbase. Maksim was involved in the development of the token-listing framework along with Xie. According to the pitch deck obtained by The Block, Scalar capital possesses “asymmetric information” and “early access to the projects”.
In July 2018, Coinbase decided to list additional tokens to their listing and considered Cardano [ADA], Basic Attention Token [BAT], Stellar Lumens [XLM], Zcash [ZEC] and 0x [ZRX]. Coinbase’s arbitrary listing of ZRX ahead of XLM and ADA makes no sense and there have been questions and speculations about collusion. ZRX had been trading outside the top 25 by market cap before its listing and being a pre-minable token, the community is unsure if it could get affirmation from the SEC as a utility token.
User CryptoRand commented on the matter:
“Every time that Coinbase talks about new listings this $ZRX picture comes to my mind. I need help.”
Another user, John Cravalho tweeted saying:
“Hey @coinbase, do your listing requirements say anything about conflict of interest or are you just gonna keep listing your own coins and the ones made by your friends?”
Coinbase is the poster child for cryptocurrency exchanges in the US, the most trusted brand in the space. With the recent investment by Tiger Global, Coinbase has a potential $8 billion valuation.
Coinbase, in particular, faced a lot of speculation when it came to the listing of tokens on its exchange. The listing of Litecoin [LTC] back in April 2017 caused quite a stir due to conflict of interest, as the project was developed and listed by Charlie Lee
Litecoin [LTC] was the third token to be listed on Coinbase back in April 2017. This decision raised quite a few eyebrows and media yelled conflict of interest due to the fact that Charlie Lee was the developer of LTC and helped list his coin when he was still at Coinbase as the Director of Engineering.
Bitcoin Cash [BCH] did something similar in December 2017. Post listing, the price of the coin skyrocketed and came to a halt when the Coinbase decided to halt the transactions amidst the investigation of possible insider trading by employees.
The cryptocurrency community has connected the dots with the facts out in the open and is strongly speculating of insider trading and collusion between the mentioned entities.
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