Coinbase clears employees of Bitcoin Cash insider trading
Coinbase Inc. has cleared its employees of insider trading after concerns were raised about a rise in the price of Bitcoin Cash prior to its support by Coinbase in December.
Bitcoin Cash, a fork of the better-known bitcoin that uses the original bitcoin blockchain ledger, debuted in August and was embraced by some as a viable alternative investment opportunity.
Coinbase initially said it would not support Bitcoin Cash, resulting in reports that some users were planning to sue it. But it changed its mind four months later when it added support for Bitcoin Cash Dec. 19, when the accusations of insider trading started.
Coinbase’s support is an important step for any cryptocurrency because it’s the largest U.S. cryptocurrency exchange. After the announcement, the price of BCH surged as much as 30 percent at a time when other cryptocurrencies did not increase by anywhere near similar percentages.
In its defense, Coinbase was quick to launch an investigation, saying Dec. 20 that it was “specifically looking at whether employees or contractors profited from the Bitcoin Cash announcement by either trading the cryptocurrency or providing details to others that it was coming.”
Fast-forward to Tuesday and Fortune reported that the inquiry into insider trading, said to have been undertaken by two unnamed law firms, had found no wrongdoing.
“We would not hesitate to terminate an employee or contractor and/or take appropriate legal action if evidence showed our policies were violated,” a company spokesperson is quoted as saying. “We can report that the voluntary, independent internal investigation has come to a close, and we have determined to take no disciplinary action.”
There’s no evidence to suggest that the outcome of the inquiry was predetermined, but what’s lacking is details of what it actually found. In particular, did it find a reason for the BCH price increase in the hours leading up to Coinbase’s announcement?
Coinbase likes to talk about transparency, and indeed Chief Executive Officer Brian Armstrong said on a post on Medium today — which did not mention the Bitcoin Coin investigation finding — that the company wants to “help provide transparency into our operations.” But until such time it offers information on what its investigation found, there are going to be people who doubt its findings.
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