As 2021 approaches, industry leading digital asset exchange, Coinbase, continues to experience a series of setbacks and negative events. Only one month ago, we were reporting on system outages, discrimination, and poor reception to political stances being taken by the company. These events now seem a thing of the distant past, as not only has the exchange been greeted with a fresh lawsuit, but the New York Times has also done a deep dive into potential pay inequality within the company’s ranks.
For years, Coinbase supported a very select few assets on its platform. The result was a plethora of cryptocurrency enthusiasts calling for the exchange to expand, and bring support for other top assets like XRP – eventually ceding, bringing support for the asset.
Through, arguably, no fault of its own, Coinbase now finds itself on the receiving end of a lawsuit stemming from the ongoing feud between the SEC and Ripple. This class action suit alleges that not only did Coinbase sell illegal securities (Ripple), but it did so knowingly while profiting from these actions.
It will surely be some time before there is a conclusion to this particular class action suit, as the entire basis of its claims are predicated on the fact that XRP token are indeed securities. While the SEC believes this to be the case, Ripple has indicated that it will be taking extensive measures to fight these claims in court.
In the meantime, this is most likely only one of the first instances of collateral damage due to Ripple. If Coinbase is found at fault, the effects will be widespread throughout the industry, as XRP tokens are/were sold by basically every exchange of modest size.
Unfortunately for Coinbase, its woes do not end with the aforementioned class action suit. They now extend to include fresh allegations by the New York Times, which indicate widespread pay inequality at the exchange.
The report finds that, when comparing to others within the same industry, Coinbase has an extensive history of paying both workers of colour, and women, less than their counterparts.
- Women on average made 8% less than their counterparts
- Workers of colour on average made 7% less than their counterparts
It should be noted that these problems may be, and hopefully are, a thing of the past. The report notes that analysis of Coinbase’s pay structure did not include data from 2018 forward. A representative from Coinbase stated that it was in 2018 that the company developed and implemented a new compensation program to ensure the issue was eradicated.
In the Rear-view
Although news moves quickly, Coinbase may have trouble putting these various issues behind them as we head in to the New Year. No doubt the exchange will do its best to change the recent narrative surrounding the company, as it gears up for a momentous event in the company’s history – going public.
While there is no firm time-frame for when it will occur, Coinbase has recently announced that it has filed the first phase of documentation with the SEC in order for it to host a highly-anticipated IPO in 2021.
This event, which is expected to be facilitated by Goldman Sachs, has been noted as a potentially monumental moment for crypto. It is marked as an event important for the industry as a whole, as it underscores the progress being made regarding the legitimacy of cryptocurrencies as a valid asset class.