Coinbase In Trouble Over Bitcoin Cash

Coinbase In Trouble Over Bitcoin Cash

Leading cryptocurrency exchange Coinbase seem to have got themselves in a bit of difficulty after a judge has ruled that the company should face court proceedings with reference to their listing of Bitcoin Cash during the 2017 cryptocurrency bull market. It was this market that caused the price of Bitcoin to spike and hit over $20,000.00, marking cryptocurrencies most intense period to date. This bull run has gone down in history as a key turning point for cryptocurrency, namely because it was the first time that crypto was really able to hit the mainstream. During the end of 2017, everyone wanted a slice of Bitcoin and other cryptocurrencies. Now, Coinbase are essentially being accused of trying to capitalise on that.

According to Coindesk:

“Coinbase must face a negligence lawsuit from customers who bought bitcoin cash (BCH) following its allegedly botched listing on the exchange during the 2017 bull market, a judge has ruled. U.S. District Judge Vince Chhabaria of the Northern District of California dismissed the plaintiffs’ fraud and unfair competition claims against Coinbase, and the negligence claims brought by the ones who sold BCH. But he denied Coinbase’s motions to move the case to arbitration and to dismiss the buyers’ negligence claims, saying it is plausible that the company breached its duty to maintain a functional market.”

As the leading cryptocurrency exchange at the time, Coinbase had a lot of responsibility resting on their shoulders. Their decision to list Bitcoin Cash and then immediately halt trading has been seen as a form of market manipulation, with many investors apparently contacting courts to attempt to get Coinbase to own up to these allegations. Now, after some deliberation it seems that Coinbase will have to undergo full court proceedings here in order to determine if they did breach their duty of care by listing Bitcoin Cash at that time and ultimately manipulating the markets.

Many believe that this listing allowed for insider trading, something that happens when people from inside the markets are tipped off about potential changes that could give them an easy route to investment:

“The case was brought last year by Jeffrey Berk, a former Coinbase user, who accused the exchange of allowing insider trading on its GDAX trading platform from Dec. 19–21, 2017, because BCH prices spiked right before Coinbase announced trading options on Dec. 20. Berk, an Arizona resident, brought the case on behalf of other traders. Two earlier versions of his complaints were dismissed.”

Now, these cases are finally being moved forward. 

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