Insider Trading Probe Launched After Bitcoin Cash Increases Suddenly

Bitcoin Cash makes waves as it becomes available on Coinbase – and then halts trading

Armstrong said he "will not hesitate" to fire any employee found to have violated Coinbase policies, which bar them from trading on material non-public information - such as when an asset will be added to the platform. Many investors accused the exchange of insider trading that caused a major volatility swing, at the same time sending all other major cryptocurrencies crashing.

Coinbase, a provider of digital wallets and trading services for crypto-currencies, said on December 20 it was investigating possible insider trading by employees and contractors after the price of bitcoin cash surged hours before the company announced it was adding the digital currency to its platform. "Coinbase employees have been prohibited from trading in bitcoin cash for several weeks". As such, he is taking the investigation into insider trading extremely seriously.

Coinbase said it would enable bitcoin cash trading for the first time Tuesday evening, and did so for about two minutes.

Bitcoin cash increases by the day or even hour lately, while its predecessor bitcoin continues to fall.

CEO of Coinbase, Brian Armstrong, addressed the issue in a blogpost: "Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter".

Observers noticed that the price of Bitcoin Cash rose sharply before news of its availability on the exchange broke, and that there was a sharp selloff virtually the moment trading started.

In an earlier blog post, an executive from Coinbase's exchange platform GDAX explained it had cancelled some Bitcoin Cash orders and cleared its order books to "ensure a fair and orderly market".

Bitcoin Cash resulted in a split from Bitcoin in August after users had complained that Bitcoin's blockchain was outdated and needed a revamp. The new coin was created to be faster than its predecessor and was built on bitcoin's existing transaction history.

While Coinbase briefly enabled orders to be posted in USA dollars on its platform for more sophisticated traders, it suspended the facility after two minutes due to "significant volatility", the company said in a blog post.

Armstrong says that his goal to to make Coinbase the easiest to use digital currency exchange that customers trust the most.

In a post on Medium, he elaborated: "We've had a trading policy in place for some time at Coinbase".

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