Introducing our Institutional Core Principles

Adam White
Aug 20, 2018 · 3 min read

Our mission at Coinbase is to create an open financial system for the world. We take this mission seriously: it’s the guiding light for every decision we make, and one of the reasons we recently launched a suite of products and services designed specifically for the needs of institutional investors. These offerings are bringing new capital into the space, facilitating more efficient price discovery and driving methods for safer storage — all of which helps move us closer to an open financial system.

Today, we’re sharing a set of core principles that will guide our institutional business. This set of fundamental beliefs will act as our North Star as we design, develop, and operate our products. Ultimately, we intend for these core principles to drive us toward our goal of operating the most trusted venue for storing, trading, and interacting with the world of cryptocurrency.

Principle One: Operate a fair and orderly market

Our commitment: Coinbase will provide protections and active monitoring of market activity to ensure the establishment, operation and ongoing supervision of a healthy market.

Our actions:

  • Operate a Market Operations team that is modeled on industry best practices to control and monitor market health
  • Administer a Market Surveillance function that adheres to the same practices and compliance standards as tier-one global exchanges
  • Adhere to business practices and procedures that ensure the reliability, performance and durability of a global market, along with mechanisms to halt and reestablish liquidity if necessary
  • Actively monitor for suspicious trading behavior by deploying best-in-class market surveillance, compliance and fraud detection practices

Principle Two: Protect our customers with institutional-grade infrastructure and processes

Our commitment: Coinbase will provide the highest levels of protection to our customers. This includes institutional-grade cybersecurity, compliance, onboarding processes and operating standards.

Our actions:

  • Operate institutional-grade tools and teams that ensure the safe storage of customer data and protection from data theft
  • Comply with, or exceed state and federal regulation, actively analyze and participate in new licensing and compliance activities
  • Protect customer assets through an ongoing commitment to our industry-leading cold-storage and custody techniques. This includes geographically distributed storage vaults, guaranteed accessibility to funds and insurance of stored assets
  • Maintaining institutional-grade Markets platform with reliable and deterministic connectivity

Principle Three: Enforce transparent market rules and governance

Our commitment: All market participants will have consistent access to current market rules, including a market rulebook, developed specifically for the unique structure and dynamics of crypto assets.

Our actions:

  • Provide public trading rules and policies that are fairly applied to all market participants
  • Publish transparent trading fees and incentive programs
  • Clearly communicate market capabilities such as order minimums/maximums, execution options, trading volumes, and maintenance schedules
  • Prohibit and actively monitor for malicious or deceptive trading practices
  • Follow a documented process for trading halts and the opening and closing of markets
  • Commit to ongoing independent third-party audits to ensure compliance with applicable regulations and industry standards

Principle Four: Provide fair access to all market participants

Our commitment: All participants will have the same rule set applied to them, with market access offered in an equal and transparent way across our platforms and customer base.

Our actions:

  • All market access methods will be public and documented
  • Distributed market data will be consistent and fair
  • Capabilities and data available will range in sophistication to allow customers to select into their own needs
  • Cooperate with other industry participants to provide our customers a safe and reliable ecosystem to participate in

Principle Five: Publicly disclose listing practices and market rules

Our commitment: We will add new assets and instruments in a clear and transparent way.

Our actions:

  • Strict, transparent adherence to a transparent listing process, which considers factors such as sophistication and security of technology, governance processes, market demand and regulatory considerations, among others. Updates to this framework will be communicated publicly
  • Every new asset will be announced in a transparent and consistent way, ensuring equal information sharing across our customer base
  • Maintain strong relationships with liquidity providers in order to provide robust markets throughout the launch of an asset

Adam White

Written by

COO @Bakkt; formerly @Coinbase exec, @USAirForce vet, @HarvardHBS alum

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