Coinbase Investigating Possible Insider Trading of Bitcoin Cash
- Author: Essie Rivera Dec 21, 2017,
Dec 21, 2017, 0:38
Trading in bitcoin cash will be suspended until 1200 ET (1700 GMT) today, a Coinbase status page showed.In a blogpost, Coinbase said it suspended trading in Bitcoin Cash because of significant volatility.
The exchange has stated that the order books will re-open again on December 20 at 09:00 PST. This resulted in a cause of an vast hike in the prices of Bitcoin Cash.
Bitcoin Cash - which is no more tangible than Bitcoin itself - came into being in August after several developers became frustrated at lengthening transaction times for the original crypto-currency. The price that Coinbase displayed was also nearly triple what was being quoted on other exchanges.
Here's what the bitcoin cash price looks like on Coinmarketcap, which takes a volume-weighted average of bitcoin cash prices from 150 exchanges.
The value of bitcoin cash exploded on Tuesday night after Coinbase surprised cryptocurrency enthusiasts by announcing that its users can buy and sell or send and receive it.
"All Coinbase employees and contractors were explicitly prohibited from trading Bitcoin Cash and from disclosing our launch plans over a month ago".
The price of bitcoin cash rose rapidly, likely due to the announcement from Coinbase that it would allow it to be traded on its GDAX exchange.
"Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter", the Coinbase CEO said in a blog post.
That BCH was to be added to the Coinbase platform was no secret - only the timing was in question, as many expected it to be a January 2018 event.
Smooth trading aside, the situation sparked controversy following allegations that insider trading may have occurred ahead of the BCH market launch on Coinbase. The price of Bitcoin Cash peaked at $8,500 on Coinbase during the launch, while it was priced at around $3,500 on other exchanges. The policy prohibits employees and contractors from trading on "material non-public information", such as when a new asset will be added to our platform.
Bitcoin cash began trading on GDAX in "post-only mode", which restricts traders to orders that are not immediately matched.
Market watchers noticed this week that the recent bitcoin cash increases seem to be coming at the expense of bitcoin because investors were starting to rotate out of it and into other cryptocurrencies, including bitcoin cash.