One of the largest cryptocurrency exchanges, announced on Tuesday that it starts BCH trading. In few hours, this hardfork of Bitcoin reached $8,500 on Coinbase’s GDAX platform. It is almost 3 times higher than the 3,500 price being quoted on other exchanges. Shortly, BCH trading was suspended on GDAX, due to “significant volatility” and signs of foul play. This is reported by the Investopedia.
— GDAX (@GDAX) 20 декабря 2017 г.
On the next day, 20.12.2017, CEO Brian Armstrong published the blog post, saying the price of BCH on other exchanges began increasing hours before his company made its announcement, indicating that employees who knew about the launch engaged in insider trading. Armstrong noted that Coinbase is currently looking into the matter.
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.
Armstrong also added that Coinbase staff, together with their family and friends, had been forbidden from trading BCH for the past month as the company prepared to make the coin available on its own exchange. He added that a similar policy was also adopted before the San Francisco-based firm began supporting Ether and Litecoin.
We’ve had a trading policy in place for some time at Coinbase. The policy prohibits employees and contractors from trading on “material non-public information”, such as when a new asset will be added to our platform. In addition to trading restrictions, it prohibits communication of material non-public information outside the company. This includes to friends and family.
Coinbase is going to add BCH trading on Wednesday again.