Coinbase cleared of insider trading charges

On Tuesday, popular US crypto exchange Coinbase released a statement saying that Fortune was clearing the company of insider and fraudulent Bitcoin Cash trading charges.

For those unfamiliar with this situation:

Coinbase has received several lawsuits accusing its employees of insider trading in the days leading up to the addition of Bitcoin Cash to the exchange.

After Bitcoin was hard forked last summer and the currency Bitcoin Cash (BCH) appeared, the company's employees published a message that their exchange would not support BCH. In August, the company changed its position and began partially supporting BCH, allowing users with BTC in their accounts to exchange them for BCH. The message indicated that BTC transactions would be available to users until January 1, 2018.

Be that as it may, on December 20, a couple of weeks before the expected date, the price of BCH received a pumping of more than double its original price, presumably due to growing demand among South Korean investors. On the same day, Coinbase management made an unexpected decision to list Bitcoin Cash on GDAX (the company's trading platform, later renamed Coinbase Pro) without prior notification. The BCH price kept pumping up and pumping up, reaching new highs, and then fell sharply within a few hours. 

Immediately after these events, Coinbase was hit with accusations and lawsuits of insider trading and foul play. Exchange officials quickly responded, saying they would conduct a thorough internal investigation to determine whether insider trading had occurred.

“We would immediately terminate employment with an employee or contractor and/or take appropriate legal action if we discovered that our privacy policy had been violated. We voluntarily conducted an internal investigation, and as a result, we have decided not to take any disciplinary action.

However, many users were dissatisfied. the lack of a clear explanation for the unexpected increase in the price of BCH, which coincided with the placement of the currency on the exchange. Considering that the company made an announcement a few weeks ago that it was adding five more currencies, some investors and Coinbase customers are rightfully wary of a repeat of the situation. 

This time, however, the company posted a statement in advance that listed all the tokens that would be added. The price of Stellar LumensXLM, for example, has already nearly doubled since this announcement. Coinbase management said it told its employees about the addition of currencies the same day it made the official announcement to avoid foul play. This is already a move in the right direction, however, it does not give investors confidence that pump and dumpwill not occur before the official listing.