Coinbase to Disclose Corporate Data Due to NY Inquiry

US based exchange publicly shared part of its response to New York Attorney General Eric Schneiderman's ongoing inquiry
03 May 2018   1407

 Coinbase published a fragment of its response to the request of the Attorney General of New York, Eric Schneiderman.This is reported by Coindesk.

We applaud the [Office of the Attorney General] for taking action to bring further transparency to the virtual currency markets.

Mike Lempres

Chief Legal, Coinbase

In April, Schneiderman's department sent 13 exchanges, including Coinbase, a questionnaire for "data collection." The Office is interested in a wide range of information - leadership, financing, terms of service, privacy protocols, relationships with other financial institutions and the use of trading "bots".

In the public version of the letter, Lempres spoke about assets (totaling $ 150 billion), financing ($ 225 million to date), financial position ("profitable and sustainable business") and staff (more than 300 employees, together with contractors - 1000) of the Coinbase exchange .

The letter also talks about Coinbase's cooperation with law enforcement agencies and regulatory agencies around the world, its "masterpiece" cybersecurity program and recent improvements to the system, thanks to which, according to Lempres, in April, the useful work time of the platform was raised to 99.99%.

In addition, the letter says that Coinbase is a monetary service regulated at the federal level, because exchange received regulatory licenses in 31 US states, including New York's BitLicense. The letter notes that this license provides for "significant supervision by regulators".

However, the full version of the letter is likely to remain out of the public eye.

Lempres asked for "confidential treatment" with the full response that the exchange sent "via an encrypted end-to-end secure file exchange service consistent with our security protocol."

That full response has a bunch of highly confidential information that we are unable to share publicly. Our aim is to be as transparent as we can in responding to this action publicly so we shared the cover letter.

Rachael Horowitz 

VP of communications, Coinbase

Most exchanges favored the request of the New York general attorney's office, but Kraken, who left New York because of BitLicense, demonstratively refused to cooperate with regulators.

Coinbase to Appear in San Francisco District Court

Exchange representatives must appear in court due to issues related to BCH trading launch in 2017
07 August 2019   134

San Francisco District Court judge Vince Chhabria ruled that the latter showed negligence and “clear incompetence generated by haste” when it started trading in Bitcoin Cash (BCH) on Coinbase. Now Coinbase, apparently, will be forced to stand trial, Bloomberg reports.

So, at the end of 2017, the exchange opened BCH trading, but was forced to suspend operations after 2 minutes due to high volatility and suspicious price increases - the coin began to grow rapidly several hours before the announcement of Coinbase.

Then the company was accused of insider trading, later crypto enthusiasts even began to find confirmation of this.

According to the judge, the users who bought VSN at inflated prices were primarily affected. He noted that the suspension of trading was too hasty and disrupted the normal functioning of the market.

BCH buyers claim that Coinbase could have announced a bid in advance to prevent a price spike, but it did not. The judge agreed with this opinion and noted that shortly before the launch of BCH trading on Coinbase, the Chicago Mercantile Exchange opened trading in bitcoin futures, which could become a factor of too much market participants' recovery.

According to the publication, Coinbase has not yet commented on the court decision.

Recall that in March 2018, a class action lawsuit was filed against the company, in which Coinbase was accused of “artificially overpricing” Bitcoin Cash through trading based on insider data.