Cryptocurrency exchange Coinbase (COIN) completed a $100 million transaction as a test of its proprietary trading efforts earlier this year, according to a report by the Wall Street Journal on Thursday.

The exchange hired at least four Wall Street traders to form a group called Coinbase Risk Solutions to use the firm's own cash to trade crypto, the report said.

Proprietary trading is when a firm engages in trading of stocks, bonds, currencies or commodities using its own money as opposed to that of its clients. Such activity is fraught with risk and the potential of conflicts of interest for the financial firm should its trades have an effect on the prices of those assets, which could in turn hurt its clients.

Coinbase executives said in December that it did not engage in proprietary trading when they appeared in Congress.

However, with the price of digital assets encountering a downward trajectory throughout 2022, dragging Coinbase stock down in the process, Coinbase may have turned to trading on its platform as a means of creating new avenues for profit.

In response, Coinbase said the WSJ report had confused "client-driven activities" with proprietary trading.

"Coinbase does, from time to time, purchase cryptocurrency as principal, including for our corporate treasury and operational purposes," the exchange said.

"We do not view this as proprietary trading because its purpose is not for Coinbase to benefit from short-term increases in value of the cryptocurrency being traded."

CRS' role is to expand institutional participation in crypto by offering services to investors who are still getting to grip with digital assets, Coinbase added.

Read more: Crypto Exchange Coinbase Could Earn $1.2B in Revenue Next Year From Higher Interest Rates, JPMorgan Says

UPDATE (11:25 UTC, Sept. 22, 2022): Adds Coinbase response and links to blog post.