Why Coinbase Chose to List Ethereum Classic over Ripple
Coinbase will add support to Ethereum Classic in the coming months, the company announced on Monday. Engineering works to create the necessary infrastructure have now begun and customers can track progress through public facing APIs.
“When we reach the final testing phase of the technical integration, which we expect to occur over the next few months, we will publicly announce a launch date for trading via our blog and Twitter,” Coinbase said in a blog post.
The announcement saw the ETC value jump 25% on Monday.
Employees with knowledge of the plans were barred from trading prior to the announcement. The company is trying to avoid an internal trading scandal that rocked it when it listed Bitcoin Cash. A lawsuit was subsequently filed over the matter with some investors claiming they lost over $5 million.
The ensuing investigation saw wild fluctuations in BCH prices.
Coinbase, one of the largest cryptocurrency exchanges worldwide lists only four cryptocurrencies Bitcoin, Ethereum, Litecoin and Bitcoin Cash, all generally considered as not being securities.
Ripple’s has also been in talks with Coinbase to have its XRP token added. There is still lack of clarity whether XRP is a security. Questions why Coinbase opted to list Ethereum Classic, which is ranked eighteenth with a market capitalisation of just $1.3 billion Ripple are bound to arise. Ripple is the third largest cryptocurrency with a market capitalisation of over $20 billion.
Ripple has long argued that its tokens which its prefers to call “digital assets” are not securities. The SEC’s position is not clear although it has said its general rules apply.
Ethereum came to life in June 2016 through a hard fork on the Ethereum blockchain following a hack of Ethereum’s Decentralised Autonomous Organisation (DAO).
Trading support is also being added for Ethereum Classic. “In accordance with our Trading Rules, all ETC books will open in post-only for a minimum of one hour. If sufficient liquidity is established, trading will then be enabled on Pro and Prime, Coinbase says.
Customers who did not withdraw their Ethereum Classic tokens after the 2016 hard fork will have them credited to their accounts.
Depending on its performance, ETC may be listed on the Coinbase platform. According to its rules, assets must first be listed in Coinbase Pro and Coinbase Prime.
Coinbase recently rebranded its GDAX exchange, the tenth largest by market capitalisation to Coinbase Pro. The platform is targeted at professional traders and institutional investors.
GDAX has a number of trading pairs including bitcoin, ethereum and major fiats like USD, GBP and EUR. The exchange is insured and enjoys backing from some of the largest institutional investors.