In December 2017, Bitcoin Cash made an unexpected price run-up, increasing nearly 25 percent in a matter of days. The increase set the stage for Coinbase’s unprompted listing of Bitcoin Cash on December 19. Within hours of the announcement, rumors spread among community members that the two events were too closely correlated for comfort, and many argued that the out-of-the-blue run-up anticipated the listing by way of insider trading.
To make the drama worse, Coinbase suspended trading soon after the listing hit GDAX (now CoinbasePro), Coinbase’s exchange arm, blaming liquidity issues and a deluge of orders that flooded its system. Trading was reopened the following day.
Seven months later, and Coinbase has provided its answers to the skepticism. Originally reported by Fortune[1], two prominent U.S. law firms, the identities of which are undisclosed, just concluded a multi-month internal investigation of Coinbase. They’ve concluded that there’s no evidence of insider trading by the company’s employees.
“We would not hesitate to terminate an employee or contractor and/or take appropriate legal action if evidence showed our policies were violated,” a company spokesperson told Fortune. “We can report that the voluntary, independent internal investigation has come to a close, and we have determined to take no disciplinary action.”
Back in December, as community skepticism reached a fever pitch, Coinbase CEO Brian Armstrong quickly responded with a blog post[2] in which he denounced insider training and elucidated that such practices are explicitly against the company’s policies. He also made it a point to announce the company’s swift and stern response to the allegations with the recently concluded investigation.
“[Company] policy prohibits employees and contractors from trading on ‘material non-public information,’ such as when a new asset will be added to our platform … Our launch of Bitcoin
