Exchanges spent much of the past two years making Super Bowl ads promising that crypto is the future, so you can empathize with someone who feels ripped off following a collapse like UST. Opinion davidzmorris for the 'Money Reimagined' newsletter
CoinDesk Editor-in-Chief Kevin Reynolds alerted me this week to a striking Linkedin post by a Coinbase staffer. In the post, apparently now deleted, the Coinbaser wrote in part that it’s “crazy to me how much market value sits in these useless projects,” before listing a half-dozen tokens including dogecoin , bitcoin cash , ethereum classic , shiba inu , litecoin , bitcoin SV and bitcoin gold .
But the post raised a much larger point: Do crypto exchanges like Coinbase have a responsibility to customers when they choose what tokens they offer for sale? Should exchanges warn customers about projects or tokens regarded as questionable by their own staff? Or is an exchange’s role more neutral, simply listing tokens and letting customers make their own choices?the depegging of the terraUSD stablecoin.
You might expect there to be a bright-line legal or regulatory answer to this question, but it’s actually somewhat unclear. That’s partly because many of the crypto assets Coinbase offers are in arelative to securities law. So a lot of the rules regarding the responsibilities of financial intermediaries for stocks, for instance, wouldn’t straightforwardly apply to an entity performing the same role for crypto-assets.
There is a further crypto complexity to all this. I’ve been talking about brokers while Coinbase is best known not as a “broker” but as an “exchange.” Because crypto is so retail-centric, exchanges are often effectively also brokers, selling assets directly to customers.
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