Allegations of Coinbase insider trading has social media raging

Coinbase, one of the world’s largest cryptocurrency exchanges, has been drawn into an insider trading furore after it posted 50 currencies it may list in future on Medium.

Readers of the article were quick to find multiple accounts which purchased tokens off the list hours before the article went public on Medium. This has caused a major social media backlash about potential insider trading.

The reason this is considered insider trading is due to the drastic price increases when tokens are added to large exchanges like Coinbase or Binance.

In a decent market, the price of a token from the time they are announced as a new listing to the point where the trading goes live can easily double or triple.

The posts on Twitter and Reddit included evidence of multiple accounts which purchased the tokens on the unreleased list. Posts also showed how the valuations of these wallets increased dramatically after the article went live.

Some of the wallets posted, such as this one, purchased hundreds of thousands of dollars’ worth of multiple project tokens which would be revealed in the post 24 hours later.

Others found wallets which were created just before the article was posted and purchased seven figures worth of tokens that were about to be announced.

Reddit and other communities are now filing US Securities and Exchange Commission (SEC) complaints for insider trading.

It is unclear at this time who the wallets belong too. Many speculate the wallets belong to Coinbase employees who had early access to this list. Others believe the projects on the list might have received the list early and purchased the tokens on the list for easy profit.

Insider trading is defined as using non-public information to trade and is currently illegal. All company employees with private information are usually required to sign non-disclosure agreements and are warned against trading with insider information.

Coinbase is currently the largest cryptocurrency exchange in the US. It has made great progress to work with regulating bodies in the US and from this work became one of the first cryptocurrency projects to go public on the New York Stock Exchange.

The reports made to the SEC might have significant impact if Coinbase is found to have been doing insider trading.

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Written by Tudor

Works as a developer and helps keeps the digital cogs turning. Leave them alone, they're busy.

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