Class Action Lawsuits: CoinBase Accused Of Insider Bitcoin Cash Trading
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A class action lawsuit was filed recently against the CoinBase accusing it of ‘insider trading’ for the Bitcoin Cash (BCH) launched December last year. The Bitcoin exchange was recently hit by two federal class action lawsuits, including an action against the company employees of fueling the insider trading during the launch of the BCH. Jeffery Berk and others filed the complaint demanding a jury trial against the Coinbase exchange, David Farmer, and Brian Armstrong for the losses that they incurred as customers.
The first lawsuit was filed on March 1, with plaintiffs claiming that the company executives were illegally involved in profited trading on the non-public information that the firm was planning to launch the BHC in December 2017. Berk filed the class action in the US District Court, North of Northern District of California representing him and other customers of the exchange.
In the 18-page lawsuit filing the discontented customers blamed the Coinbase exchange for allegedly tipping its employees a month earlier before the launch of the Bitcoin Cash (BCH), which was effected on December 19, 2017.
Berk claims that the clients who placed trade orders on the BCH during the launch suffered monetary losses after it was established that the company workers were tipping people off before the launch date was released. The lawsuit also alleged that the insider trading activity by the employees abnormally increased the price of the BHC thus leading to the customers to unfairly lose money on their trades.
The moment the trading of BHC was announced, Coinbase was swamped with buy and sell orders thus thinning the liquidity but obtaining them at low prices. The intention was supposed to unfairly drive up the price of BCH for non-insiders immediately the BCH appeared online.
Hence those who were not tipped off didn’t get the chance to act before the trading platform stopped the trading activities. The lawsuit is now demanding a jury trial and unspecified monetary damages for the affected customers whose orders were canceled.
