Global cryptocurrency exchange Coinbase has indicated that, following an investigation and a subsequent general meeting, the company has confirmed that no insider trading took place during the Bitcoin Cash listing of December 2017.
Apparently, the internal investigation began shortly before Bitcoin Cash was introduced to its trading desk in December of last year. Increased trading at the time had led to a spike in Bitcoins Cash’s valuation at the time, followed by the suspension of the digital currency four hours after it came online.
Coinbase’s CEO had said at the time that trading on non-material public information was against the company’s ethical rules. This would also include sharing information with friends and family.
A spokesman for the exchange has confirmed that the internal investigation into insider trading had been completed and that Coinbase was happy no violation of rules had been committed. The spokesperson said:
“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 public response at the time regarding the meteoric rise of Bitcoin Cash over the space of a few hours was scathing, casting suspicions on some less than ethical activity taking place. Twitter users felt at the time that there had been a leak regarding the launch of the forked currency.
I dont care how you slice it, this is INSIDER TRADING! Someone with alot of Bitcoin knew @coinbase would add Bitcoin Cash BCH and took one BIG chunk of profit from the #flippening. Whoever you are you are your making crypto look like wall st. Shame on you. pic.twitter.com/g9YU9jGm0T
— TheCoinDad (@TheCoinDad) December 20, 2017
Despite Coinbase concluding that the company is free of blame from insider trading, there is still a class action in progress for damages for the violation of consumer protection laws by the company. Unconfirmed reports say that this case is now being investigated by the Commodity Futures Trading Commission (CFTC).
Coinbase has certainly had its sticky moments this year, even if it hasn’t violated the law. The most embarrassing for the company must have been stating that it had received SEC approval for listing securities tokens, only to confirm this month that this hadn’t actually taken place and that neither the SEC nor the Financial Industry Regulatory Authority (FINRA) had given any such ruling.
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