Coinbase Changed Its Listing Policy For New Tokens: Report

Coinbase changed its listing policy for new tokens and will no longer publish a shortlist of the assets but rather only publicize new listings after a decision has been made so let’s read more today in our latest Coinbase news.

Coinbase CEO Brian Armstrong addressed concerns that the traders have been taking advantage of the company’s listing process and wrote that the company will adopt a new policy feature in the upcoming months. Armstrong’s message was a reaction to the recent allegations that an ETH trader was able to gain access to the list of coins that Coinbase considered adding to the exchange before that list was made public in a company blog post. The trader was able to buy up $400,000 worth of the tokens which were on the coinbase shortlist and then increased in value by 42% over the next day.

Coinbase changed its listing policy for new tokens and the exchange will stop publicizing the shortlist and instead announce assets after it has decided to list them. The company said it will make that announcement before the technical integration started. It is meant to be a safeguard against front-running and the piece about listing the new assets before technical integration starts is an important detail.

Front-running is a term borrowed from traditional financial markets and refers to using insider information to make a trade before the competition. In some cases, the traders will choose to pay higher gas fees to get the transaction processed before the rest of the market because doing so will ensure bigger profits. The traders look to front-run Coinbase listings were able to figure out which assets will be listed before they appear on the platform. It happened before at other companies see OpenSea. Nate Chastain resigned from the NFT marketplace after a user pointed out on Twitter that he had engaged in unethical trading. The data on Ethereum block explorer Etherscan showed a wallet that belonged to him bought NFTs before they were featured on the OpenSea homepage and resold them for a profit.

Coinbase hasn’t said publicly who bought up the $400,000 worth of tokens before they got shortlisted but Armstrong did say in his blog that the company is still working with blockchain forensics companies to investigate whether the unethical trades can be traced back to the employees.