22 December, 2017
The cryptocurrency exchange said that it is looking at a sharp increase in price of bitcoin cash hours before it said it would launch support for the new digital currency.
Bitcoin Cash was created on 1 August when Hong Kong-based digital currency exchange Bitfinex said a minority of bitcoin miners would be "forking" to create a new version of bitcoin to make trading faster and easier. Now, an investigation is underway.
Bitcoin cash traded about 33 percent higher over the last 24 hours at $3,786 as of 6:03 p.m. Wednesday, according to Coinbase. "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." wrote Coinbase CEO, Brian Armstrong.
Charlie Lee denied any connection, stating he only sold for convenience.
Price spikes after major announcements are the norm in financial circles.
Facebook's 'snooze' button mutes a friend for 30 days
Facebook says the move is the latest in a series of changes to the newsfeed as the firm tries to give users more control over it. In the options drop-down menu you see appear on each post in your News Feed, you should see a new option for Snooze .
"All BCH books will enter cancel-only mode, and all existing orders will be cleared". Analysts attributed the plunge to an influx of funds to Bitcoin Cash.
The allegation from some critics was that Coinbase staffers could have purchased Bitcoin Cash - or BCH - on other exchanges at a lesser value - all the while knowing it was about to open for public trading. An account for Whalepool, which describes itself as a community of day traders focused mainly on bitcoin and other cryptocurrencies, commented, "Very unusual accumulation and pump on Bcash in the hours leading up to the @Coinbase BCH add".
In a post on Medium, he elaborated: "We've had a trading policy in place for some time at Coinbase".
Just hours later, however, the site suspended trading after bitcoin cash's price spiked, prompting concerns about possible insider trading by people who had been briefed about the announcement.
He added, "Our launch of Bitcoin Cash today is no exception to this". He also points out that this was stressed to employees in the month leading up to Bitcoin Cash's launch on the platform. This was communicated multiple times via multiple channels to employees. Given the nature of cryptocurrencies, it is unlikely that there is any way to prove that insider trading has occurred.