Litecoin price – Coinbase fined $6.5 million over improper trading practices
Coinbase has been hit with a $6.5 million fine from the Commodity Futures Trading Commission (CFTC) for allegedly misleading consumers about its trading volumes.
The CFTC said the cryptocurrency exchange ran automated trading programs that “recklessly delivered false, misleading, or inaccurate reports concerning transactions in digital assets” between January 2015 and September 2018.
The company is accused of including trades of bitcoin and litecoin between two programs run by Coinbase in the data it shared with outside services, therefore giving the appearance of more trading volume than there was in actuality.
The alleged “self-trading” took place on Coinbase’s two automated trading programs, Hedger and Replicator. Regulators say one of Coinbase’s motives was to attract more investors by giving the illusion of increased trading interest.
“Reporting false, misleading, or inaccurate transaction information undermines the integrity of digital asset pricing,” the CFTC’s Acting Director of Enforcement Vincent McGonagle, said in a statement. “This enforcement action sends the message that the Commission will act to safeguard the integrity and transparency of such information.”
Wash trading
The CFTC also found that a former Coinbase employee abused the programs between August and September 2016 to buy and sell cryptocurrency in “wash trades” that artificially inflated activity. The Commission said it’s holding Coinbase “vicariously liable” for the fraudulent trades.
“The order also finds that over a six-week period—August through September 2016—a former Coinbase employee used a manipulative or deceptive device by intentionally placing buy and sell orders in the Litecoin/Bitcoin trading pair on GDAX that matched each other as wash trades,” the CFTC’s statement continued. “This created the misleading appearance of liquidity and trading interest in Litecoin. Coinbase is therefore found to be vicariously liable as a principal for this employee’s conduct.”
The total penalty for the CFTC’s charges of improper reporting of exchange volume and “self-trading” is $6.5 million. Coinbase didn’t admit or deny the Commission’s findings.
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Litecoin price – Coinbase fined $6.5 million over improper trading practices
Tags: Litecoin price