Business 23 November 2018

Ed Drake

Fresh Bitcoin Cash insider trading suit vs Coinbase goes to court

An amended class action lawsuit alleging insider trading at cryptocurrency wallet and exchange service Coinbase will go to court, after an initial application to the courts was turned down on a legal technicality.

The decision, published in court documents uploaded by Coinbase, means the case will be heard on January 31, 2019, in a district court in north California, giving the plaintiffs the chance to put their arguments in front of a judge for the first time.

The case concerns allegations of insider trading at Coinbase over its handling of the bitcoin BCH rollout in 2017, which many users had felt resulted in Coinbase staff profiting at the expense of the market.

The initial application was rejected in October, after petitioner Jeffrey Berk had failed to “describe the scope or content of Coinbase’s duty.” However, the amended filing now highlights how Coinbase breached its own listing rules, which claimants suggest will now form the basis of their class action.

According to the filing, Coinbase did in fact sell BCH at artificially inflated prices to its own benefit during the launch last year. It stated, “The sudden launch (of BCH) was effectively part of an attack by Coinbase and (CEO Brian Armstrong) to depress the price of BTC and to inflate the price of BCH, to encourage more transactions and greater profitability for Coinbase.”

“As a consequence of this scheme, the Individual Defendants and Coinbase enabled Coinbase to earn significant fees from the trades of its customers, from which Coinbase earned a spread over an inflated price for BCH, and to avoid a ‘run’ on the Company by sellers anxious to take advantage of the inflated price, by closing down trading within minutes of the Launch to all except certain insiders who were positioned to and did sell BCH at inflated prices during the Launch,” according to the filing.

Coinbase has until December 20 to file a response to the claim, ahead of its court hearing at the end of January.

The judge who ruled on the first filing, District Judge Vince Chhabria, accepted that Coinbase had “bungled” the rollout of BCH.

The firm has since conducted its own internal investigation, which perhaps unsurprisingly found no foul play.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

COMMENT

latest news

Japan to strengthen crypto AML and KYC laws and look hard at exchanges

Business 5 hours ago

Japan to strengthen crypto AML and KYC laws and look hard at exchanges

Japan doesn’t want to be embarrassed by lax crypto laws again, and they will set a new example for the world to follow.

Read More
US Presidential Hopeful Eric Swalwell accepting Bitcoin SV donations

Business 7 hours ago

US Presidential Hopeful Eric Swalwell accepting Bitcoin SV donations

He’s not a big contender yet, but Eric Swalwell is hoping that a few BSV donations might get him in the conversation as a Presidential hopeful.

Read More
Cobinhood exchanges reportedly goes bust–or not

Business 7 hours ago

Cobinhood exchanges reportedly goes bust–or not

Cobinhood has reportedly gone under, succumbing to the issues that plagued a number of companies during the prolonged crypto winter.

Read More
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]