A class action lawsuit has been filed in court against cryptocurrency exchange Coinbase, allegedly over insider trading on its bitcoin cash launch.
The lawsuit, brought to court by Jeffrey Berk who represents a group of investors hthat placed trading orders, alleges that the company tipped off insiders prior to the official launch event that happened in December 2017. Because of this, the investors are now crying foul and are seeking damages before the court for negligence. There is no specific monetary damages stated as of yet, but this is expected to be determined upon trial.
Coinbase launched BCH for trading on December 20, 2017, which saw prices spike just before the announcement. Suggestions that company employees may have given tips to others in advance then floated in social media, requiring Coinbase to respond to the claims by promising an investigation on the matter. The claimants supposedly never saw any report or heard back from the company, and so purports that Coinbase has thus violated California’s Unfair Competition Law.
“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,” said the complaint.