Crypto exchange Coinbase has been accused of insider trading by Twitter users after the recent announcement of listing of tokens. Users of the microblogging site claim that certain people at the cryptocurrency exchange used this information to their own benefit by buying the tokens before the announcement became public.
Insider trading refers to the practice of using non-public, confidential, material information about an asset to book profits before the information becomes public knowledge.
Last week, Coinbase announced the listing of 50 tokens. These tokens were relatively unpopular. Moreover, the market cap of most of these tokens was below $1 billion and the liquidity of the tokens was also low.
Interestingly, just before the announcement became public, large sums of money were invested in some of these tokens. The funds invested multiplied by manifolds after the listing announcement became public. And this sent Twitter berserk.
Cryptocurrency influencer Jordan Fish, who goes by the name Cobie on Twitter, used on-chain data to accuse Coinbase of Insider trading.
Another user highlighted big trades of other tokens that took place hours before the listing announcement.
One user pointed out that the tokens listed were practically “shitcoins” and expressed his disappointment that an exchange like Coinbase would list them.
Business Today has reached out to Coinbase for an official statement but the exchange shared a tweet by Philip Martin, CSO of the exchange, as a response.
The CSO, in his tweet, responded to Cobie’s query by saying that an investigation in the matter had been initiated and would take some time to come to a conclusion.
