Trading of Bitcoin Cash temporarily suspended pending an investigation
Dec 21 2017
Coinbase said earlier that customers who held a bitcoin balance at the time of the fork creating bitcoin cash August 1 will see an equal balance of the rival coin in their account.
Armstrong said that all Coinbase employees and contractors were "explicitly prohibited" more than a month ago from trading in bitcoin cash and from revealing launch plans.
Coinbase was concerned that its own workers had exploited the shift towards Bitcoin Cash and away from Bitcoin after its price skyrocketed. It wouldn't legally be considered insider trading because cryptocurrencies aren't securities, but the allegations, if true, would raise many questions about the company's trustworthiness.
On its blog, Coinbase said the service of buying and selling Bitcoin Cash was available on its exchange, GDAX.
The launch of Bitcoin Cash contributed to the price on the original bitcoin falling about $2,000 in less than hour, to below $15,700, before recovering.
Bitcoin cash emerged earlier this year amid a split between factions in the cryptocurrency space over proposed software upgrades to the blockchain technology underpinning bitcoin. Speculation is that is has caused a shift from users in bitcoin to that of bitcoin cash.
"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", wrote CEO Brian Armstrong in a blog post Wednesday (20 December).
"Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter", Armstrong said. It features a change in the digital software that was created to speed up the efficiency of transactions as the value of bitcoin ballooned.
While Coinbase briefly enabled orders to be posted in US dollars on its platform for more sophisticated traders, it suspended the facility after two minutes due to "significant volatility", the company said in a blog post.
Coinbase stated: "Coinbase maintains a strict trading policy and internal guidelines for employees".