Coinbase Investigates Possible Insider Trading Before Bitcoin Cash Announcement
- Author: Toni Ryan Dec 21, 2017,
Dec 21, 2017, 0:38
When the exchange announced last night that it would start supporting the new cryptocurrency, it also said that anyone who held bitcoin in their Coinbase wallets when it forked will finally get their tokens, the company announced in a statement last night.
"If we find evidence of any employee or contractor violating our policies - directly or indirectly - I will not hesitate to terminate the employee immediately and take appropriate legal action".
Apparently, there is some case of insider trading ahead of its announcement - and that caused significant volatility in the price where the order book showed that bitcoin cash hit a high of $9,500. At the time of the trading halt, bitcoin cash was trading at around $8,500, reports the BBC.
Bitcoin Cash - which is no more tangible than Bitcoin itself - came into being in August after several developers became frustrated at lengthening transaction times for the original crypto-currency. This means that all the retail and professional traders registered on Coinbase can now trade directly in BCH.
There have been many changes in the industry, but this divergence would offer each and everyone the same amount of Bitcoin cash that they had in the virtual currency.
CEO of Coinbase, Brian Armstrong, addressed the issue in a blogpost: "Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter". Armstrong added that Coinbase is now looking into the matter.More news: Young YouTube Star Makes Millions Reviewing Toys
The allegation from some critics was that Coinbase staffers could have purchased Bitcoin Cash - or BCH - on other exchanges at a lesser value - all the while knowing it was about to open for public trading.
"All Coinbase employees and contractors were explicitly prohibited from trading Bitcoin Cash and from disclosing our launch plans over a month ago".
Trade of Bitcoin Cash was frozen just four minutes after it began on the firm's Global Digital Asset Exchange (Gdax) and existing orders were cancelled.
Coinbase stated: "Coinbase maintains a strict trading policy and internal guidelines for employees".