Bitcoin Cash: Scandal erupts as Coinbase investigates claims of insider trading

Adjust Comment Print

Coinbase, one of the world's biggest digital currency exchanges, on Wednesday, announced Bitcoin Cash support, allowing customers to buy, sell, send and receive this "hard-fork" of Bitcoin. Bitcoin cash started rising before Coinbase's announcement, which led CEO Brian Armstrong to announce he was looking into the potential activity.

Smooth trading aside, the situation sparked controversy following allegations that insider trading may have occurred ahead of the BCH market launch on Coinbase.

Trading in bitcoin cash will be suspended until 1200 ET on Wednesday, according to Coinbase's status page.

Although Bitcoin remains highly volatile, investors may panic less during short-term price swings if the liquidity of the cryptocurrency improves.

Bitcoin's price plummeted to as low as $15,800, reported Bitstamp and to as low as $16,484 on Coinbase, a 12 percent decline.

Bitcoin Cash price (BCH/USD) has skyrocketed following the cryptocurrency's surprise listing on Coinbase and its exchange platform GDAX.

Armstrong said he will not hesitate to terminate any employees who violated company policies.

Coinbase stated on its Bitcoin Cash blog announcement that it "maintains a strict trading policy" and employees have been "prohibited from trading in Bitcoin Cash for several weeks".

Bitcoin cash was created as an offshoot of the original bitcoin in August.

When the Bitcoin "crash" happened earlier in the day, Gemini - the exchange which works with the CBOE on its futures trading - said that they couldn't process transactions due to problems on the blockchain related.

He added that Coinbase will be conducting an investigation.

One of the leading crypto-currency exchanges has halted its newly introduced Bitcoin Cash after suspicions of insider trading.

Bitcoin Cash is a "forked" version - or alternative version - of bitcoin, the most traded and most prominent cryptocurrency.

"We have been monitoring the Bitcoin cash network over the last few months and have chose to enable full support including the ability to buy, sell, send and receive", Coinbase said in its announcement via a blog post. This meant a lot of people were suddenly getting in on the Bitcoin Cash game, in addition to the fact that the cryptocurrency would be tradeable on an app that recently topped Apple's download charts. Coinbase's Bitcoin Cash announcement on Tuesday seemed to steal the wind behind other cryptocurrencies, as values for Bitcoin, Ethereum, and Litecoin dropped at around the same time.