Is There Insider Trading In Bitcoin Cash In Coinbase Crypto Exchange?
If there is any doubt that insider trading was happening in bitcoin cash in Coinbase, the digital currency exchange clarified that there was no such thing to have happened. This is based on an inquiry launched by it in December last year. The inquiry was in respect of any of its employee’s involvement in improper trading in the virtual asset, bitcoin cash. The investigation came to a conclusion after finding that there was no wrongdoing when the market was growing at a rapid pace.
The reason behind the cryptocurrency launching its investigation was a sudden spurt in bitcoin cash price following its announcement about the addition of the coins. Significantly, this is nothing but development from the original bitcoin to Coinbase for the first time. Following the entry of the digital coin into the exchange, it enabled millions of customers to access the virtual asset. Since the customers did not have any other way to acquire the token, the price has surged that is similar to most of the other digital currencies getting listed in the exchange.
However, the key factor is that the official announcement has triggered the price movement of bitcoin cash significantly thus raising questions. That is whether the exchange employees were aware of any knowledge beforehand to acquire the cryptocurrency compared to others in the market, fortune.com reported. After months-long investigation under the two popular law firms, the inquiry was completed last week. In any case, the news is a favorable one for the exchange though it is yet to come out of the legal front.
That is because of customers of the cryptocurrency exchange filing a class action suit that is going on currently. The suit seeks damage for negligence, as well as, violating the laws of consumer protection. A lawyer, Lynda Grant, representing the plaintiffs’ stated that the case is in the procedural stage only. Though she thinks that the Commodity Futures Trading Commission (CFTC) is engaged in the investigation, she has not offered any details.
For its part, the CFTC is yet to confirm whether it is investigating the matter. Significantly, the controversy brought to light the impact of listing in Coinbase and why a company prefers to list in it. For instance, Ethereum Classic that was listed last month to its portfolio has witnessed a sharp jump in price following the announcement. Before that, there was not much change.
Ready To Take Action
Coinbase disclosed that it does not mind taking action against anyone. The exchange’s spokesperson commented, “We would not hesitate to terminate an employee or contractor and/or take appropriate legal action if evidence showed our policies were violated. We can report that the voluntary, independent internal investigation has come to a close, and we have determined to take no disciplinary action.”
The Fortune report quoted a source to suggest that a lawyer staff held discussions with employees last week on the outcome of the inquiry. Bitcoin cash was launched in August last year by a developers group. Though Coinbase was not keen on extending support to the digital coin initially, the exchange started to support it in mid-December.