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Coinbase Launches Probe on Bitcoin Cash rally Insider Trading

21 December, 2017, 00:54 | Author: Samuel Sharp
  • Bitcoin the virtual currency leaped above $14,000 for the first time

The CEO of Coinbase, the biggest US cryptocurrency exchange, said the company is conducting an investigation into unusual trading activity that preceded its distribution of Bitcoin Cash on Tuesday evening.

Buying or selling Bitcoin Cash remained disabled Wednesday morning on Coinbase but customers could transfer the cryptocurrency to other digital wallets.

Indeed, price charts showed the price of Bitcoin Cash increasing just prior to the company's official announcement.

The resulting cryptocurrency - dubbed Bitcoin Cash - is up around 50 per cent within the last few hours, trading around $3,775 or £2,815 at the time of writing.

Armstrong said in addition to trading restrictions, the policy prohibits communication of material non-public information outside the company, including to friends and family.

Watch bitcoin cash's price move in real time here.


The popular trading platform is working on enabling bitcoin cash trading on its platform but is facing volatility troubles.

"It appears the price of bitcoin cash on other exchanges increased in the hours before our announcement", Brian Armstrong, chief executive at Coinbase, said in a blog post.

He says that the company is looking into volatile trading of the virtual currency shortly before and after its launch on the website. The fact that the price of the cryptocurrency was rising in the hours before the announcement could be a sign that people were trading based on insider knowledge.

Bitcoin Cash first surfaced online back in August when a group of developers "forked" the Bitcoin blockchain.

Coinbase's Global Digital Asset Exchange (GDAX) also announced the suspension of Bitcoin Cash trading via its Twitter Inc (NYSE:TWTR) account. Armstrong wrote, "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". "Factors we considered include developer and community support, security, stability, market price and trading volume".

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