It has been a pretty eventful day for the Coinbase team as well as supporters of Bitcoin Cash. Although it was only a matter of time until this altcoin was added to the platform, things have worked out in a rather interesting manner. More specifically, the company temporarily froze all trading activity across both its platforms due to illegitimate behavior. Things got so out of hand that the Coinbase team decided to launch an official investigation regarding the matter. It’s a very problematic development, although it remains to be seen if this investigation will turn up anything suspicious.
Coinbase Isn’t Happy About the Bitcoin Cash Manipulation
It is commendable to see exchanges such as Coinbase and GDAX enable Bitcoin Cash trading at this point in time. Although this altcoin only launched a few months ago, it has certainly made a big impact. Whether or not the momentum will spill over into 2018 remains to be determined. It is certainly possible this may only be the beginning of what is to come for BCH, although it’s also evident a lot of people will attempt to manipulate its price moving forward.
More specifically, a lot of trades took place on Coinbase and GDAX during the 90 minutes this new trading market was accessible. As is usually the case when a new coin is added, people will try to get the most bang for their buck. For some reason, some people decided to buy Bitcoin Cash at over US$9,000. It is possible they confused it with Bitcoin, although there’s also a chance something more nefarious is going on. Price manipulation is not necessarily illegal, but it’s certainly frowned upon.
For now, the Coinbase team has no evidence of any wrongdoing as far as this trading market is concerned. No one can deny those high BCH prices certainly raise a lot more questions than answers. Even prior to the announcement, the price of Bitcoin Cash on both Coinbase and GDAX seemed to rise. This degree of anticipation is nothing new in the world of cryptocurrency, although it seems some of the differences may have been rather substantial.
Said Brian Armstrong, Coinbase’s CEO:
I take the confidentiality of material non-public information very seriously as CEO. 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.
It’s a bold statement, to say the least, and it shows the team is committed to sniffing out any illicit activity associated with Bitcoin Cash trading. It seems highly unlikely one of the company’s employees was involved in this attempt to manipulate the markets. At the same time, no one can deny all possibilities should be looked into in this regard. It is evident something has gone awry, but no one knows for sure in what direction one should look right now.
Nonetheless, it is good to see the company taking responsibility. Being the most trusted and convenient exchange in the world is not easy by any means. It is unclear if the company will refund users who were affected by these wild price swings or not. Some people have made and lost money, either due to their own doing or because of some market manipulation. Whether or not this internal investigation dredges up any wrongdoings remains to be determined.