CoinDesk reports that Coinbase is doing a probe to ascertain whether their employees were conducting insider trading.
The CoinDesk article linked below cites CEO Brian Armstrong blog post which was itself a response to allegations of the unsavoury trading practices that many are suggesting Coinbase took part in.
Coinbase CEO, Armstrong wrote:
"Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter. 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."
https://www.coindesk.com/coinbase-probe-insider-trading-breach-bitcoin-cash-listing/
The concerns and allegations arose out of the significant Bitcoin Cash price pump which happened before Coinbase or GDAX went live with BCH. And the pre-pump has got people wondering if some people who knew were acting early. Look at the chart for yourself, pre-listing on Coinbase BCH rose approximately 30%. Then after listing on Coinbase it rose another 50%!
If there was no insider trading that lead to this pre-pump then it would seem some people were just really lucky. It seems to me that while Coinbase certainly does not want insider tips and trading, it is very hard to monitor all trading when your employee can simply take his/her phone to the bathroom and buy online without anyone ever knowing.
My Thoughts:
I believe Coinbase has no interest in orchestrating a Bitcoin Cash pump, nor a "cashening", but nevertheless someone at Coinbase must have let slip that BCH would be listed before it did, because that would best explain the dramatic price action pre-listing. I think Coinbase agrees hence their declaration of intention to investigate.
Unfortunately I wouldn't expect anything to come of the investigation. No one will be caught, or punished, because the act is untraceable. I suspect we hear in a week that Coinbase has conducted a thorough review of their staff, and protocols, and they will reassure us that no one could ever possibly profit from insider information, and then we won't hear any more about it. At least until Coinbase lists another coin and perhaps we see a similar situation unfold.
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