A report today on CoinDesk.com spells out some major legal trouble for cryptocurrency exchange Coinbase.com. Going back to its launch of Bitcoin Cash, the popular exchange is now facing allegations of insider trading in a class action suit.
Was Insider Trading At Coinbase.com The Reason For THe Class Action Lawsuit?
As first reported by Wolfie Zhao of CoinDesk, a court document dated last Thursday states that Jeffery Berk initiates the case. The CoinDesk report also mentions that he represents a group of investors that placed orders for trades with Coinbase on its trading platform GDAX from Dec. 19 through Dec. 21 of last year. The basis of the legal complaint accuses Coinbase of tipping off inside traders ahead of its formal launch for bitcoin cash (BCH). The group filing the complaint are claiming negligence, and it is seeking an unknown amount of damages at this time. The report states that this figure will be decided when the case goes to trial.
How Can This Have An Affect On Real Money Casino Gambling?
The whole issue dates back to August when San Francisco-based Coinbase first released plans to support bitcoin cash. This was a new Crypto asset that was forked from the blockchain in November. Also in the report was the notion that the exchange would offer this new service live by Jan. 1 of this year. At this point, investors would be able to withdrawal bitcoin cash. Above all, this could have an impact on real money casino gambling.
Coinbase Employees May Have Leaked Information
The Bitcoin trading platform was first released on Dec. 20, and the initial BCH prices had spiked just before this took place. Most importantly, this immediately led to accusations on various forms of social media that implied that certain Coinbase employees might have prematurely leaked information to some insiders in advance. The company did respond to these accusations by stating that it would launch a full investigation into this matter. The sole purpose was to determine if any employee or group of employees did indeed violate the company’s insider trading rules.
California’s Unfair Competition Law
The ensuing lack of transparency is crucial to the lawsuit since the plaintiffs in this matter claim that the results of this internal investigation were never revealed nor communicated to the general public. The suit goes on to claim that this is a clear violation of California’s Unfair Competition Law.
CoinDesk goes on to point out that the actual complaint states:
“When Coinbase’s customers’ trades were finally executed, it was only after the insiders had driven up the price of BCH, and thus the remaining bitcoin customers only received their BCH at artificially inflated prices that had been manipulated well beyond the fair market value of BCH at that time.” CoinDesk also goes on to add in the spirit of full disclosure that it is ‘a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
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The Lawsuit Needs To Go Through The California Legal System
Above all, this is going to be a case to follow as it works its way through the California legal system. The article did not provide any time frame for how things may proceed. However, given that CoinDesk has an active interest in its outcome, you can rest assured that any further cryptocurrency news on this matter will be communicated on the site.
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