It looks like the Wall Street Journal and Coinbase Global Inc COIN misunderstand each other.

The diary released an alleged account of the exchange’s trading activity earlier this year and claims it amounts to proprietary trading. Coinbase responded in a blog entry saying that is wrong.

What happened: The newspaper reported this early on Thursday morning, citing “people who are close to the matter”. coin base executed a $100 million transaction that was viewed internally as a test deal by the firm’s Risk Solutions business, which had been set up for proprietary trading purposes.

Banks and other financial organizations engage in proprietary trading when they trade their own funds for profit, rather than doing so to receive a commission from a client.

For conflict of interest purposes, this is relevant. When Coinbase trades for its own benefit, it can harm the interests of its users trading the same digital assets, as the platform’s buy and sell orders can cause fluctuations in the value of the coins its users own.

However, the exchange made it clear in the blog post that it is not acting for its own benefit and responded to the WSJ’s claims.

“Unlike many of our competitors, Coinbase does not operate its own trading business or act as a market maker,” the blog post reads. “Indeed, one of the competitive strengths of our Institutional Prime platform is our agency-only trading model, where we only act on behalf of our clients. As a result, our incentives and our customers’ incentives are aligned by design.”

Why it matters: At the heart of the problem is Coinbase’s new risk mitigation unit called “Coinbase Risk Solutions (CRS)”.

According to the Journal, Coinbase introduced the CRS last year to trade cryptocurrencies for clients. Among other ambitions, the group has decided to trade Coinbase’s money, the WSJ reported.

According to the asset platform, the CRS was created to support cryptocurrencies and Web3 more…