Coinbase becomes the object of the attention from the US Futures Trading Commission (CFTC) in connection with the incident happened in June this year, when the price of Ethereum on the GDAX exchange dropped to almost zero for a few moments. That resulted in the loss of funds for some users.
Back then, the crash was triggered by $12.5 million trade that caused other traders to panic sell and automatic sell orders to initiate. Coinbase compensated traders who were impacted by the flash crash. The company representatives claim that it “fully cooperates with regulators” but they were “unaware of a formal investigation” into the event.
As detailed by cryptocoinsnews.com details referring to bloomberg.com, CFTC requests the information on the role that marginal trading, introduced at GDAX in March to attract institutional investors, could play in the event. Through margin trading, large-scale traders can use borrowed funds to place high-risk bets on the future value of the asset, in this case, Ethereum.
It is noteworthy, that the CFTC investigation into the Ethereum price crash on GDAX is yet another sign of the increased focus U.S. regulators are placing on the cryptocurrency markets.
Ethereum price chart on coinmarketcap.com
Meanwhile, at the time of writing, Ethereum price is about $296.79, its market capitalization is $28,172,251,304.