Lex Fridman Podcast: Ft. Brian Armstrong
Recently, the chief executive officer (CEO) of the largest cryptocurrency exchange, Coinbase, described how his organization chooses which alternative currencies to include on the site. Brian Armstrong, CEO of Coinbase, claimed in a podcast with computer scientist Lex Fridman that his organization first determines if an altcoin qualifies as a security. He also said that they essentially have a legality test. Do they think this is a security, they always ask? If so, Coinbase cannot accept the listing. And for that, the company follows a pretty strict procedure.
You just cannot accomplish that under the US legal system as it stands right now. The SEC granted Coinbase a broker-dealer license. Although trading actual crypto securities is now not available in the US, Brian and his team are working with them to get it operational. Security was the next item on Armstrong’s list of evaluating criteria. Next, Coinbase examines the cryptocurrency asset’s cybersecurity. One question that they generally ask is do they believe that the smart contract has a fault or that it might be manipulated without the consumers’ consent.
The Coinbase Listing Criteria
Coinbase also takes into account various compliance factors, such as the individuals responsible, any prior criminal activity, and similar factors. Armstrong wishes to list it if they think it satisfies the listing criteria, which are essentially this test of legality and everything related to client safety. It’s similar to Amazon or anything like that, where a product may have three stars or five stars, but if it starts to consistently receive one star, it’s presumably fraudulent, faulty, or something else, and maybe Amazon will remove it. If not, you should leave it up to the market to decide what these items are.
Source: https://www.thecoinrepublic.com/2022/08/07/brian-armstrong-listed-coinbases-listing-criteria-in-a-famous-interview/