Coinbase Cleared of Insider Trading Accusations After Investigation
Many users remember Coinbase’s Bitcoin Cash debacle in December, with a bulk of the community accusing the exchange’s employees of insider trading. But according to a recent development, an investigation has found that none of the firm’s employees participated in insider trading.
Coinbase’s Insider Trading Inquiry Met With Zero Results
Coinbase, a most prominent cryptocurrency platforms in the industry, recently completed a probe for insider trading, finding zero cases of insider misconduct, per a report from Fortune on Tuesday.
As Fortune has learned, Coinbase representatives have stated that the multiple month investigation, which was conducted by two established U.S-based law firms, was concluded as of last week. According to unnamed sources who are familiar with the matter, an internal lawyer held a company-wide meeting last week to discuss the end result of the investigation.
It is unclear what was the result of that meeting, but a Coinbase spokesperson made it clear that no disciplinary action will be taken against any employee within the firm. Speaking more on the case, the aforementioned representative of the firm said:
“We would not hesitate to terminate an employee or contractor and/or take appropriate legal action if evidence showed our policies were violated.”
It was also noted that the San Francisco-based cryptocurrency platform also orchestrated its own “voluntary independent internal investigation,” but didn’t find any incriminating evidence, staying in-line with the third-party probe.
The Six-Month-Long Debate On The Coinbase Cash Listing Continues
The firm initiated the insider trading inquiry following the addition of Bitcoin Cash to the Coinbase ecosystem, as the exchange noticed an influx of unusual trading activity that may have originated from the firm’s expansive employee pool.
In the hours and days prior to the official Coinbase announcement, Bitcoin Cash, the foremost Bitcoin fork, saw an unexpected rise in price and volume from an array of exchanges. According to CoinMarketCap, the day prior to the announcement saw Bitcoin Cash’s volume nearly double, as the cryptocurrency rose by nearly 40%.
In the original statement regarding the investigation and Coinbase’s standards regarding insider information, Coinbase CEO Brian Armstrong wrote:
“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.”
It is still unclear why Bitcoin Cash saw such a run-up in the days preceding the Coinbase listing, but the aforementioned inquiry seems to have cleared all of the firm’s employees of financially-motivated crimes or malpractices, or at least for now.
Despite the partial resolution of the case, the crypto-focused firm may run into legal issues moving into the near future, as a lawsuit regarding the Bitcoin Cash case is still pending. The members of the class in the California-filed lawsuit are bidding to receive financial compensation from the firm for being in violation of consumer protection laws. Speaking with Fortune journalists, Lynda Grant, a lawyer representing the class, stated that the firm is still in procedural stages, but is likely going to continue moving into the future.
Additionally, Grant pointed out that the U.S. Commodity Futures Trading Commission may be investigating the case as well, but did not make Fortune privy to the any further details regarding the matter.
These legal setbacks have not seemed to stop the firm one bit, with Coinbase continuing to see rapid development and the introduction of new products to the firm’s already impressive roster.
Image from Shutterstock
The post Coinbase Cleared of Insider Trading Accusations After Investigation appeared first on NewsBTC.
by nickchong on July 25, 2018 at 04:30PM