Coinbase Investigates Insider Trading After Bitcoin Cash Price Spikes
Coinbase, the San Francisco-based digital currency exchange, lit up social media in all the wrong ways on Tuesday after it suddenly announced it would allow its users to buy, sell, send and receive Bitcoin Cash (BCH) on its Global Digital Asset Exchange (GDAX), but then suspended trading just four minutes after it began.
The reason? Well, a rocket-like price spike in the hours before trading was enabled might have had something to do with it. BCH, a spinoff last August in a hard fork from the original Bitcoin, had been hovering in the $1,800 to $2,000 range, but in advance of the announcement had jumped to about $3,500 on most exchanges.
However, the GDAX exchange was quoting a price well in excess of twice that – $8,500 (some reports had it at $9,500) – when trading was enabled, which then quickly fell to a little more than $3,000, prompting ferocious complaints. This, according to Adam White, general manager of GDAX, was done, “to ensure a fair and orderly market.” But things were anything but orderly at that point.
Coinbase CEO Brian Armstrong hurriedly took to the company blog to address a flood of accusations of insider trading. He promised an investigation even though, “we have no indication of wrongdoing at this time.”
-Allyson White, CEO Alde Security Solutions, LLC.