Coinbase is one of the bigger household names in the world of cryptocurrency. The company is best known for offering its cryptocurrency exchange services to consumers from all over the world. However, even major companies have to keep evolving. As such, the firm recently acquired one of its smaller competitors, Paradex.
An Interesting Acquisition by Coinbase
In the world of cryptocurrency exchanges, competition is direly needed. Centralized trading platforms are the go-to gateways for novice enthusiasts looking to buy small, medium, and large amounts of cryptocurrency. Coinbase is one of the most popular platforms in this regard, even though there are a few competitors on the market as well.
Surprisingly, it seems one of those smaller competitors has attracted the attention of Coinbase. Paradex is a platform which lets users trade virtual coins in a peer-to-peer manner. It is an iteration of the decentralized exchange model, as it does not maintain custody of tokens at any stage. This makes this acquisition all the more interesting, as one wouldn’t expect decentralized exchanges to be acquired in this manner.
Even so, Paradex currently employs a team of 10 people. It shows how popular the service has become recently, as consumers are looking for ways to buy cryptocurrency in a convenient manner. With this acquisition, Coinbase is experimenting with introducing support for additional cryptocurrencies currently not supported by the trading platform. Those plans were made apparent a few months ago, though no real changes have been made since.
Being conservative when listing new tokens and cryptocurrencies isn’t a bad approach these days. Other trading platforms seem to add coins on a regular basis, which creates a fair amount of pump-and-dump schemes. Coinbase has been careful to avoid such events, although it remains to be seen if they can continue to do so. Right now, the major trading platform only supports Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Other currencies will be added over time.
It is expected Coinbase will provide access to Paradex services in the United States in the future. When that will happen exactly remains to be seen, as the SEC will need to vet all currencies first. As of right now, Paradex mainly supports ERC20 tokens. A fair few of them may be labeled as securities, which is why Coinbase will not expose its users to all of these currencies until the vetting process has been completed.
Until the integration is complete, the Paradex mobile application will be unavailable. This sudden change may annoy some users, although it is only normal that the functionality is kept offline until this process is completed. It is of the utmost importance to keep customer funds safe at all times, even when Paradex is not the custodian of said funds. It’s unclear when the integration will be completed, but a process like this one can take anywhere from days to several weeks.