Home Cryptocurrency Ethereum Bye Bye, GDAX! Coinbase Buys Ethereum Startup As Part Of 'Pro' Rebrand

Bye Bye, GDAX! Coinbase Buys Ethereum Startup As Part Of 'Pro' Rebrand

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Coinbase CEO Brian Armstrong sits for a portrait in their San Francisco headquarters. (Photo by Christie Hemm Klok for The Washington Post via Getty Images)

Heavily funded cryptocurrency exchange Coinbase has purchased Ethereum startup Paradex for undisclosed terms, in a deal announced today.

After raising more than $225 million from Graylock Partners and others, the U.S.-based cryptocurrency exchange that helps connect more than 20 million cryptocurrency buyers and sellers plans to use Paradex to provide a new batch of services.

At the top of that list, which corresponds to a rebranding of Coinbase’s institutional trading platform GDAX to Coinbase Pro, the Paradex technology will soon allow many Coinbase users to trade directly from one wallet to another, without the exchange in the middle.

Coinbase co-founder and CEO, Brian Armstrong positioned the acquisition as reinforcing “Coinbase’s commitment to investing in decentralized infrastructure and participating in the nascent world of wallet-to-wallet trading.”

While terms of the deal were not disclosed Coinbase further explained that Paradex and its staff of nine employees will continue to operate as a subsidiary of Coinbase.

Unlike more traditional centralized exchanges, Paradex lets users “relay” cryptocurrency directly to one another without a third party ever needing to custody the token. Founded last year, the company accomplishes this by using a blockchain protocol developed by 0x, which is in turn advised by Coinbase co-founder Fred Ehrsam and former Coinbase employees Olaf Carlson-Wee and Linda Xie.

Going forward, Coinbase’s existing centralized solution will continue to custody and exchange U.S. dollars, Bitcoin, Litecoin and Bitcoin Cash, while Paradex’s non-custodial offering will serve Ethereum tokens that comply with the ERC20 token standard. A representative of Coinbase declined to comment if Paradex’s decentralized solutions might eventually be expanded to serve other cryptocurrencies.

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