Image: AFP/Stephane De Sakutin
Cryptocurrency trading app Coinbase is launching an investigation on insider trading after bitcoin cash (BCH) soared in value, hours before the company announced it would support the cryptocurrency.
Bitcoin cash was created as an offshoot of bitcoin. It is based on bitcoin’s existing transaction history and was developed to process more transactions.
According to Silicon Angle, four hours before the announcement, there was a spike in bitcoin cash being bought.
The cryptocurrency then increased by 40 percent when Coinbase enabled trading for two minutes and then disabled it, reports Business Insider.
Coinbase initially stated it wouldn’t allow bitcoin cash trading. Its decision to trade came as a surprise on Tuesday.
Trading has since resumed, with about 11,591 BCH or roughly $39 million exchanged within the first 15 minutes.
“All Coinbase employees and contractors were explicitly prohibited from trading Bitcoin Cash and from disclosing our launch plans over a month ago,” Coinbase CEO Brian Armstrong wrote in a blog post. “Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter.”
He added, “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.” Niña V. Guno/JB
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