Coinbase to shut down GDAX after acquiring P2P Paradex exchange

Popular cryptocurrency exchange Coinbase has announced plans to shut down its cryptocurrency exchange GDAX to launch the brand new Coinbase Pro which will cater specifically to crypto-traders. This news came after their announcement that they purchased Paradex, a peer-to-peer trading platform for ERC20 tokens.‎

Paradex is a trading platform built on top of the 0x protocol and it allows for exchange settlement without the need for user accounts or taking custodianship of their funds. Meaning, you hold your own private key.

Paradex will be integrated into the new  Coinbase Pro product in the coming weeks, the company said.

“This will significantly enhance the proposition for our customers in terms of what they want to trade and how they want to trade it,” Asiff Hirji, Coinbase president and chief operating officer told CNBC’s “Fast Money” Wednesday.

A key distinction between Paradex and other exchanges is that it does not hold tokens on behalf of its customers. Users instead trade peer-to-peer, directly from their own “wallets.” Coinbase in contrast, acts as a trusted custodian for digital assets on its exchange.

“This peer-to-peer trading removes the need for third-party custodianship and the associated security risks,” Coinbase said in a blog post. “It is another step toward creating a truly decentralized crypto economy.”

With this move, Coinbase is expanding beyond trading Bitcoin, Bitcoin Cash, Ether and Litecoin. It has functioned as the middleman in transactions of those coins and kept custody of the underlying digital tokens. Trading over Paradex will link customers directly with one another outside of Coinbase’s exchange. Coinbase is still working out whether and how it will implement a fee structure.

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Rene Peters
Rene Peters

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.

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