Coinbase is one of the largest crypto tradings platforms has reportedly shut down its Political Action Committee (PAC) and might be scaling down their operations. Although the decision was made last week, it only came up in public domain recently. The exchange has already initiated the necessary paperwork to shut its PAC with the Federal Election Commission (FEC).
The paperwork submitted to FEC suggests that the exchange did not make any profit out of its PAC, and there hasn’t been any outward payment made via PAC in 2019. In order to shut operations for PAC, the company needs to present a termination report which must include the explicit understanding that no payment can be accepted or sent by the PAC.
Coinbase is reportedly focusing its business strategy towards institutional investors since they can bring in substantial cash flow as well as profits to the exchange. Along with the PAC closure, Coinbase has also confirmed that they are shutting down their operations in Chicago office.
What is PAC?
Political Action Committee (PAC) is a common American mechanism which helps in driving the funds towards political campaigns, and the committee is an independent organization whose sole purpose is to collect funds and drive it towards particular political interests and candidates. Coinbase formed their PAC in July 2018, which made it one of the founding members in the blockchain ecosystem. The PAC had little success in the form of Democratic candidate taking up their cause and appealing for a coordinative effort to take the industry forward.
However, Coinbase realized that the PAC is not helping at a level they would have expected them to do, and thus they have decided to go for closure instead.
Coinbase Scaling Down Their Operations To Focus on Institutional Investors
Coinbase along with PAC shutdown also revealed that it will be closing down its operations for the Chicago office. The company fired 30 of its employees while many others either had to shift their office or start working from home. The move is being seen as a change of strategy for the exchange where it is moving away from small traders carrying our high-frequency trades and focusing more towards institutional investors who are in the game for long term.
Coinbase’s Director of Communications, Elliott Suthers confirmed the reports and said,
“Institutional is one of our fastest growing businesses and institutional customers are driving a lot of growth for us right now”