Bitcoin Cash Deals Frozen As Insider Trading Is Probed

Audrey Hill
December 21, 2017

The announcement was made after the prices of Bitcoin cash jumped up some notches.

His comments followed accusations that Coinbase employees may have secretly profited following the launch of Bitcoin Cash - a new form of cryptocurrency which opened for trading on the website on Tuesday (19 December) at higher values than other exchanges.

At issue, though, is the big run higher just prior to Coinbase's announcement, suggesting someone may have been front-running.

There has been a noted surge in the Bitcoin Cash-to-Bitcoin trading pair recently as it accounted for more than 5 percent of global bitcoin trades at Bittrex.

Coinbase is one of the largest cryptocurrency exchanges in the world, so when it adds a new coin to its portfolio investors take notice.

Armstrong said he will not hesitate to terminate any employees who violated company policies. Historically, the price trend of bitcoin has had an inverse relationship with the short-term performance of alternative cryptocurrencies.

More news: US Government Making More Requests For Data Than Ever, Says Facebook
More news: Google Chrome's built-in ad blocker will go live on February 15th
More news: Ronaldo hopes to retire at Madrid

However, it is still unclear whether this was a software glitch or if deals were really being made at this level. From a cursory glance, it looked like someone knew about the Coinbase move in advance, triggered a flurry of trading that led to a spike in price, and took advantage of this for a massive windfall.

Armstrong also emphasised that he had told Coinbase employees through several channels that they were prohibited from trading bitcoin cash in the weeks leading up to its launch on GDAX. While in cancel-only mode, no new orders will be accepted.

As I am looking at the BCH-USD pair on GDAX right now, trading appears have been halted around 3:30am today. The exchange did this to ensure a "fair and orderly market".

Coinbase, a well known US Cryptocurrency Exchange is being investigated because of internal issues.

Brian Armstrong responded that he had repeatedly warned his staff not to disclose its launch plans to family or friends or to trade in the digital asset themselves.

Coinbase has yet to give a full explanation but has said that it intends to reopen Bitcoin Cash order books later on Wednesday. "Given the price increase in the hours leading up the announcement, we will be conducting an investigation".

Other reports by MaliBehiribAe

Discuss This Article

FOLLOW OUR NEWSPAPER