Coinbase clears its reputation by clearing the allegations of insider trading.
August 9, 2019 5:05 pm,
Ever since the outburst of digital currency, cryptocurrency exchange sites are in prevalence. There are platforms that enable people to buy and sell cryptocurrencies such as Bitcoin, Ethereum coin, Lite coin, and other altcoins. Both of these exchange sites have been in the limelight due to a large number of reasons lately. Binance was a victim of hackers who abducted bitcoins worth millions of dollars, and Coinbase has been a case of public attention due to the act of committing fraud in relation to the Bitcoin Cash lawsuit.
In the year 2017, Bitcoin witnessed a hard fork that resulted in the splitting up of bitcoin into Bitcoin Cash. The cryptocurrency exchange websites were slowly adding Bitcoin Cash into its websites and the value of the altcoin was rather low. At this time, Coinbase added Bitcoin Cash into their website. This led to a hike in the price of BTC. The users bought the altcoin for the higher price offered by Coinbase, but soon after the trading started, the exchange platform shut down. This led to the situation where the customers were not able to sell the coin for the higher prices. This was initially considered an accident, but the users soon complained that it was an aftereffect of the insider trading that took place within Coinbase.
The concept of insider trading is very common in the corporate world, especially in the stock exchange arena. It is considered a situation where the company has access to some sort of confidential information that they use in some ways to get an advantage over the users. Coinbase was accused of the same allegations as the customers of the cryptocurrency exchange website assumed that Coinbase had some additional crucial information regarding the Bitcoin Cash which led to them buying up large sums of the altcoin. The fact that the website closed down the exchange platform using BTC within 2 minutes of its launch also triggered suspicion.
Coinbase is one of the most reputed and highly trusted cryptocurrency exchange websites across the globe. Even though there has been a lawsuit filed against the firm, no strong evidence has been able to be produced against them. The plaintiff has identified three lawsuits but due to the lack of evidence, it has to be moved forward as a negligence lawsuit and nothing more than that. Again, there have been comments only regarding how poorly the site has launched BTC, and this has nothing to do with insider trading or anything of that sort. The court also said that the case is only an issue of mere launching issue and cannot be associated with any type of fraud. This proves as a major relief to the exchange website as the case was an issue of the credibility of the website.