The court document from the United States district court for the northern district of California indicated that US Coinbase faces class action lawsuit over insider trading allegations. What are the details of the case?
6 March, AtoZForex – The US-based cryptocurrency exchange Coinbase is reportedly facing a class action lawsuit over alleged insider trading. The official court document from the United States district court for the northern district of California is dated back to the 1st of March.
US Coinbase Faces Class Action Lawsuit Over Insider Trading Allegations
The US Coinbase action class lawsuit case has been brought by Jeffrey Berk. The latter is representing a group of investors that have placed trading orders on Coinbase or GDAX, its order book trading platform. The trading orders have been placed in the period between 19 and 21 December 2017.
Thus, according to the complaint, the case points out the launch of Bitcoin Cash trading in December on Coinbase. More specifically, the plaintiffs are accusing the company of tipping off insiders prior to the official launch of the BCH trading. Moreover, the group of plaintiffs is accusing the firm of negligence.
Following on this, the group is seeking damages. The amount of damages will be decided at trial.
Coinbase Bitcoin Cash Launch
Back in August 2017, when the Bitcoin Cash has forked off the original Bitcoin protocol, Coinbase has commented that they will not support the newly created cryptocurrency. However, afterward, the exchange has changed its mind over BCH and launched the trading on December 20th.
After the move, the prices of Bitcoin Cash have spiked. Following this development, there were rumors on social media the Coinbase employees have tipped off other in advance. The company has reacted to the accusation by stating that it would carry out an investigation into the matter.
Coming back to the fresh US Coinbase Class Action Lawsuit, the group of plaintiffs believes that the firm has never disclosed the full results of the investigation. The complaint reads:
“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.”
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