Coinbase, the leading cryptocurrency exchange, said Wednesday (Dec. 20) that it is looking into claims of insider trading.
According to a report in Reuters, accusations of insider trading are swirling after a big jump in the price of bitcoin cash, hours before Coinbase’s announcement that it will support the cryptocurrency. On Tuesday (Dec. 19), bitcoin cash increased $8,500 on the Coinbase exchange, just before Coinbase launched bitcoin cash trading. On its website, Coinbase said that bitcoin cash trading will be suspended until 12:00 ET Wednesday (Dec. 20).
In a blog post, Coinbase chief executive Brian Armstrong said the company is conducting an investigation into the matter, and that their active trading policy prohibits employees and contractors from trading on any material non-public information.
“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 Armstrong. “Our goal is to make Coinbase the most trusted and easiest to use digital currency exchange. We will only accomplish this goal by ensuring that we (the employees and contractors at Coinbase) all hold ourselves to a high standard of conduct.”
Armstrong noted in the blog post that with the launch of bitcoin cash, all of the company’s employees and contracts were explicitly prohibited from trading bitcoin cash and from disclosing Coinbase’s plans to launch for more than a month now. He said it was communicated multiple times via multiple channels to employees. Reuters noted that on Tuesday, traders turned to Twitter to contend that the news of the bitcoin cash launch on Coinbase was leaked ahead of the public announcement.
Bitcoin cash came to be this summer when a section of the bitcoin community forced the blockchain (the digital ledger that records every bitcoin transaction) to split into two separate chains.