San Francisco-based Coinbase, a cryptocurrency exchange, is now the target of a class-action lawsuit for allegedly engaging in insider trading. The lawsuit was filed on March 1 by a man who is representing a group of investors who placed trades between Dec. 19 and Dec. 21, 2017.
According to the court documents, the plaintiffs allege that Coinbase launched bitcoin cash trading in December 2017. Coinbase allegedly tipped off some insiders prior to the launch. This allegedly resulted in the price of bitcoin cash spiking just before the official launch of trading on Dec. 20.
Coinbase reportedly stated that it would conduct an internal investigation to determine whether or not any of its employees divulged information about the launch in violation of insider trading rules. the plaintiffs are seeking an undetermined amount of damages. They have alleged that the company was negligent in failing to prevent its employees from tipping off others about the launch of the bitcoin cash trading.
Securities regulations and laws prohibiting insider trading are in place to prevent people from gaining an unfair advantage in trading. When these laws are violated, investors have the right to sue for the losses that have resulted. People who have been harmed as a result may want to talk to an experienced commercial law attorney who has experience with these types of cases and who can analyze the evidence in order to determine whether or not it appears that such laws have been violated. If so, the attorney may file a lawsuit against the company and the people who engaged in insider trading, seeking appropriate damages.
Source: Coin Desk, “Coinbase hit by lawsuit over alleged insider trading,” Wolfie Zhao, March 5, 2018