Coinbase is investigating claims of insider trading from its Bitcoin Cash launch

[Cordillerabit]

Coinbase is investigating whether its employees took advantage of inside knowledge to profit on the launch of bitcoin cash (BCH) when it was added the popular crypto exchange.

The company, which recently raised $100 million at a valuation of $1.6 billion, finally added support for BCH — a fork of bitcoin — on Tuesday after much demand from users. But, in true Coinbase fashion, the launch was mired with service outages as the price of the new addition fluctuated wildly.

The price of BCH hit a high of $8,500 on Coinbase and its GDAX service for professional investors, which was almost three times higher than the $3,500 price on all other exchanges. That led to calls of insider trading from Coinbase staff who, in theory, could have profited by buying BCH on other exchanges in the knowledge that it was about to be added to Coinbase, a move that would (and did) trigger increased trading volume and a higher price as the exchange’s 10 million-plus users got a piece of the action.

Now Coinbase CEO Brian Armstrong has confirmed that the company is investigating the events around the price spike.

“Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter. 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,” he wrote on Medium.

https://techcrunch.com/2017/12/19/coinbase-inside-information-bitcoin-cash-launch/