A class action lawsuit has been filed against Coinbase, alleging insider trading of Bitcoin Cash by the exchange’s employees.
Crypto trader Jeffrey Berk filed the suit on behalf of himself and other traders, reports Motherboard, claiming to have suffered monetary damages as a result of the misconduct.
Any cryptocurrency supported by an exchange as large as Coinbase would have its value automatically boosted, it is thought, and so those unaware of the investment in Bitcoin Cash ahead of the announcement were shortchanged.
The lawsuit reads: “When Coinbase’s customers’ trades were finally executed, it was only after the insiders had driven up the price of Bitcoin Cash, and thus the remaining Bitcoin customers only received their Bitcoin Cash at artificially inflated prices that had been manipulated well beyond the fair market value of Bitcoin Cash at that time.”
In a tweet on December 20 – the day after the exchange opened up access to Bitcoin Cash for trading – Coinbase said: “Coinbase maintains a strict trading policy and internal guidelines for employees. Coinbase employees have been prohibited from trading in Bitcoin Cash for several weeks.”
The investigation into these allegations is still ongoing.