Lawsuit Filed Against Coinbase Due to Alleged Insider Trading. Coinbase is the leading cryptocurrency exchange in the world and it had become so popular with the recent bitcoin craze that they were unable to accept new users for weeks at a time such was the backlog of applicants who had been trying to start investing in cryptocurrencies through their exchange.
They have been making improvements to their platform as of late, including adding SegWit to their wallets which will see significant decreases in the transaction fees that had hit high numbers in the last few months and had irritated a lot of people in the crypto community.
However, this news that was reported about a lawsuit that has been filed against them is significant as it alleges a serious offence of insider trading against the crypto exchange.Advertisement
This class action lawsuit has been levelled against them in relation to the launch of bitcoin cash and alleges insider trading against Coinbase.
This document was dated as being filed last Thursday and this lawsuit has been brought by one Jeffery Berk who is representing a collection of investors that had placed orders for trades using Coinbase or through their order book platform called GDAX between the 19th of December and the 21st of December 2017.
According to the complaint, it refers to the launch of bitcoin cash (BCH) that very month and the plaintiffs have made accusations that there were insiders tipped off by the company in advance of the launch of this digital currency.
Therefore, there are accusations of negligence against Coinbase and there are being damages sought by this group of investors as a result, with the exact sum to be decided come the trial.
Coinbase is a company based out of San Francisco and it was back in August of 2017 that they initially made the announcement about their upcoming support for bitcoin cash which is a new cryptocurrency which resulted from a fork in the bitcoin blockchain last November.
The exchange had been saying that this would be going live on their platform to trade by the 1st of January 2018 whereby thereafter investors on their exchange would have the ability to withdraw bitcoin cash if they wished to do so.
It was on the 20th of December that Bitcoin cash was eventually launched on Coinbase and it was noticed that just in advance of the announcement the BCH price had spiked and it didn’t take very long for people on social media to being levelling accusations of foul play, with some speculating that there may have been workers in Coinbase who tipped off some other people in advance of this announcement.
After these accusations were made, Coinbase came out and said that they would be conducting an investigation into the matter and would be trying to find out if there were any trading rules violated by their employees in the run-up to this launch.
The plaintiffs are arguing that the full results of this supposed investigation were never released by the company and as a result, they have violated the Unfair Competition Law that is in place in the state of California.