Despite bitcoin’s crash to new lows around $15,800, bitcoin cash seems to be going on a surge right now, up over 50 percent at one point during December 20. Coupled with two tweets Coinbase recently sent out, as well as bitcoin cash’s price on the exchange, many are beginning to suspect Coinbase may be guilty of insider trading or other malicious financial activities.
About 70 minutes after that first tweet was sent out, Coinbase tweeted something rather suspicious:
Coinbase maintains a strict trading policy and internal guidelines for employees. Coinbase employees have been prohibited from trading in Bitcoin Cash for several weeks.
— Coinbase (@coinbase) December 20, 2017
This came out after the exchange supported BCH, where the cryptocurrency had a trading price of around $8,500 on Coinbase, and “temporarily” disabled sales of bitcoin cash. This effectively, is only letting people buy into bitcoin cash, which is certainly concerning.
And while Coinbase/GDAX has always had a premium compared to other exchanges for their bitcoin, litecoin, and ether offerings, when you’re trading at a price $5,000 higher than other exchanges on average (140 percent more) something is definitely up. For comparison, on the main, regulated European exchange, Bitstamp, BCH-USD only reached a high of $3,820.55.
I call it: The Fraudulent Obelisk pic.twitter.com/yCjhgIAVu5
— grubles (@notgrubles) December 20, 2017
While it is too soon to know if Coinbase employees really have been insider trading, many have gone to Twitter to express their opinions regarding the situation.
If Coinbase’s policies are on par with their customer support, then it’s as bad as it can get. Clearly the employees leaked the BCash/Coinbase news weeks ago and did not care about the NDA. Coinbase listing Bcash is a new low for the exchange endoring scammers #Coinbase #BTrash https://t.co/JCZn050b0G
— BitcoinGuru (@BitcoinGuruInfo) December 20, 2017
While the quality of Coinbase’s customer service and phone number is a topic for another article, the rest of the tweet holds truth. While Coinbase may have this policy in place, it doesn’t stop the employees from trading on other exchanges, or even their own.
Cryptocurrency is so hard to regulate, given that was one of it’s main goals when Satoshi conceived Bitcoin.
Another tweet spawned in the flurry of people voicing their opinion, facts, or whatever it maybe, is one by @JacobMooSF, which certainly does not help Coinbase’s case:
Sure, this volume before the announcement is purely coincidental. Good grief. pic.twitter.com/XUazkjJ411
— Jacob Mooallem (@JacobMooSF) December 20, 2017
The screenshot of was taken on Poloniex, a prominent altcoin exchange. And as you can see by the screenshot attached in the tweet, volume ramps up quite a bit right around the time of the announcement.
Coinbase has made no further comments regarding the situation, and has provided no updates on when bitcoin cash withdrawals will be allowed. It is too early to know if action from regulation agencies such as the CFTC or SEC is required, but BTCManager will post updates as they develop.