Coinbase, one of the biggest and most popular cryptocurrency exchanges in the US, has decided to use its considerable monopoly on cryptocurrency traders to make a little extra money from its fees.
In a post describing its updated fee structure, the exchange’s “Pro” arm announced that its maker and taker fees would be rising from next week. The ones to be most affected by this fee increase are the small-time traders.
Coinbase has said they will be “slightly increase fees for lower-volume customers”, but this amounts to an increase in maker fees of 233 percent for traders in the $0 – $10,000 bracket – from 0.15 percent to 0.50 percent – while taker fees for the same bracket have doubled – 0.25 percent to 0.50 percent.
The move, according to Coinbase, will increase the depth and liquidity of their markets, but they are not making any moves to effect their bigger traders. Those placing trades between $50,000 and $100 million will see no increase. While Whales with $100 million or more to trade with will see decreases ranging from -13 percent to -20 percent.
In comparison to other trading sites, Coinbase has drastically upped the fees for their lower-tier traders. For example, Kraken’s $0 – $50,000 bracket is charged 0.16 percent maker fees and 0.26 percent taker fees. In fact, the whole fees model is seen as a pain point for traders, which has led the likes of US equities and exchange traded funds by US broker Charles Schwab, and E*Trade, another top-four broker, to remove commission fees.
Coinbase has not been doing their loyal customers a lot of favor recently. This fee increase has not gone down well on social media, and this only adds to the backtracking they appear to be doing with regards to a USDC interest announcement.
Coinbase announced that its users would earn interest for every USDC they hold on the exchange, but in clarification to Mashable seems to be playing a different tune.
“Coinbase got back to me with a clarification that ‘technically, customers aren’t earning interest from their USDC holdings due to the structure of the fund that is being allocated to distribute USDC and how customers need to report their earnings,'” the update on the announcement article read.