Coinbase Senior Director Steps Down

Rumors about Gupta leaving Coinbase started swirling in the crypto market after a report by Bloomberg. The former director had been with the company for nearly 3 years, overseeing key products on the exchange. Gupta later confirmed his departure through social media posts.

In those posts, Gupta highlighted that when he joined Coinbase, the exchange supported 27 cryptocurrencies, but today it has grown to 236. The order book has expanded from 73 to 534 requests. Coinbase's market share in the US has increased from 35% in 2020 to a whopping 65% now. Gupta also mentioned the successful acquisition of the regulated CFTC cryptocurrency derivatives platform FairX and the Coinbase Derivatives Exchange during his time as Coinbase's director. 

Vishal Gupta is a renowned expert in the financial market. Before joining Coinbase, he had worked at Circle, where he played a key role in bringing the USD Coin (USDC) stablecoin to market. In fact, Gupta decided to join Coinbase while collaborating on the launch of USDC on the U.S. exchange. Gupta's background is in traditional finance, having held the position of Vice President at Goldman Sachs Group Inc. from 2004 to 2012.

According to Bloomberg, Gupta is reportedly planning to develop a new cryptocurrency project in the future, as stated by an anonymous Coinbase employee. This information was indirectly confirmed by the former director of the exchange. 

In the comments section of Gupta's farewell posts on Twitter and LinkedIn, it's noticeable that there are more congratulations than expressions of gratitude, which might seem a bit unusual. Moreover, there were a couple of animated gifs featuring running rats. One concerned follower asked, “What? Right when coin base is starting to be investigated? Why now?” Another speculated, "Are you being forced to leave?"

The reaction of the cryptocurrency markets is totally understandable. Right now, the exchange is facing some tough times. According to Bloomberg, representatives from Coinbase have had over 60 meetings with the U.S. Securities and Exchange Commission (SEC) in the past nine months. The SEC Chairman, Gary Gensler, has repeatedly stated that tokens offered by cryptocurrency companies are considered securities, which means crypto platforms are required to register with the SEC. Recently, on March 22nd, Coinbase announced that it had received a Wells notice from the SEC, which is a formal notification sent by the regulator at the end of its investigation. The company is given time to challenge the SEC's accusations. But this usually leads to legal proceedings or a settlement agreement with fines. 

It's worth noting that Coinbase's competitor, Kraken, halted its U.S. program after receiving a similar Wells notice, without admitting or denying the SEC's allegations. Paxos also suspended the issuance of its stablecoin BUSD, which had raised concerns with the regulator. 

Regarding Coinbase, it seems that Gary Gensler is unhappy with the exchange's digital asset status and its Coinbase Earn and Coinbase Wallet services. In response, Coinbase representatives have expressed their willingness to go to court with the SEC and are confident in their positions for future legal proceedings. However, the company has experienced departures from its leadership team, including Chief Product Officer (CPO) Surojit Chatterjee leaving just two months before Vishal Gupta's departure. 

Interestingly, Chatterjee was one of three executives who were demanded to be terminated by Coinbase employees in a petition called "Operation Revive COIN" last summer. Employees claimed that the management's policies had led to "questionable results and negative value." Exchange CEO Brian Armstrong's response was firm and decisive.

It's possible that Vishal Gupta heeded his boss's advice today. However, the exchange has not made any comments regarding his dismissal.