As far as I know, Coinbase has no investment vehicle which uses discretion to speculatively move into and out of individual cryptocurrencies.

Instead, they sometimes collect their commissions in cryptocurrencies, and they offer an index fund. To the extent they'd need to convert those commissions to fiat to cover other expenses, or acquire/discard coins for the index fund, those activities necessarily require buying/selling at market, but offer limited opportunity for manipulation.

If the "20% volume" is from these necessary activities, it's not so concerning, and (for example) forcing them to use someone else's market for these activities would be silly.

I don't agree, if they need to hedge spot for their index there is huge value in being the one that operates the venue. The activity is trading crypto and there is always an incentive to do this at the best price (doesn't matter whether you are providing liquidity, or hedging some exposure). Right now we can only assume they do this "the fair way" (eg. how we can trade on their platform - with the same information we have). But how do we know they are? For all we know the guy that needs to execute these trades is sitting next to another guy that is monitoring the exchange and everyone's stops / margin liquidation prices.

They have to make their profits somehow. And, the ultimate check on their profits is competitive offerings. Thus a slight profit here may just help them charge less elsewhere, in the fees I explicitly pay. (I can see how a professional or high-frequency trader would feel differently, though.)

But, a further clarification from Coinbase has confirmed my skepticism of the nefarious interpretation of the "20% volume" statistic. The 20% figure s driven by trades at the direction of of customers, not for Coinbase itself. See:

https://blog.coinbase.com/correcting-the-record-coinbase-doe...

>Who are the good exchanges now?

By default there are none. All trusted third parties are security holes [1]. Can't trust any of them. But they're much easier to build to service a need, so they exist. Some are less bad than others (not an expert on exchanges but Gemini and LedgerX come to mind). But they are really just stop gaps until more decentralized options become available and mature.

[1]:https://nakamotoinstitute.org/trusted-third-parties/

wouldn't the real conversation be about what she expects here?

does she want an additional paragraph in the 40 page disclaimer? "There may be automated trading, users that enter trades manually may be at a disadvantage in reacting to market fluctuations."

"The OAG could not review the practices and procedures of non-participating platforms (Binance, Gate.io, Huobi, and Kraken) concerning manipulative or abusive trading. However, the Kraken platform’s public response is alarming. In announcing the company’s decision not to participate in the Initiative, Kraken declared that market manipulation “doesn’t matter to most crypto traders,” even while admitting that “scams are rampant” in the industry."

That said, if you can identify exchanges e.g. in jurisdictions where frontrunning would be very risky, then those might be safer in that regard.

" Trading platforms that engage in proprietary trading on their own venues uniformly told the OAG that their trading desks had no informational or other trading advantage over customers. The OAG found that significant variation exists in the amount of trading activity attributable to those platform operators. Circle reported that it accounted for less than one percent of the executed volume on its platform Poloniex during the most recent time period reviewed. BitFlyer USA indicated that its own activity accounted for approximately ten percent of the executed volume on its platform. Another, Coinbase, disclosed that almost twenty percent of executed volume on its platform was attributable to its own trading. "