Coinbase CEO Brian Armstrong.Anthony Harvey/Getty Images for TechCrunch
- Coinbase said Tuesday evening users wouldn’t be able to buy and sell bitcoin cash four hours after it said trading of the cryptocurrency would be enabled on its platforms.
- CEO Brian Armstrong said the company is looking into whether employees tried to profit from advanced knowledge of the news.
- Bitcoin cash is a spin-out cryptocurrency of bitcoin that was created in August.
Coinbase, one of the largest cryptocurrency trading platforms, shocked the crypto-world with its announcement Tuesday evening that it would allow users to buy and sell bitcoin cash.
The news sent bitcoin cash, the spin-off cryptocurrency of bitcoin launched in August, to an all-time high above $3,609 per data from Markets Insider. On Coinbase’s GDAX platform, the price of the cryptocurrency reached well above $8,000 per coin. That appreciation began slightly before the announcement on some exchanges, raising concerns about insider trading among employees aware of the news before the announcement.
Coinbase CEO Brian Armstrong said in a post early Wednesday morning that the company was looking into the matter.
“Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter,” he said. “If we find evidence of any employee or contractor violating our policies — directly or indirectly — I will not hesitate to terminate the employee immediately and take appropriate legal action.”
The price spike appeared to put pressure on Coinbase. Nearly four hours after the San Francisco-based firm announced it was supporting bitcoin cash trading, it said users wouldn’t be able to buy and sell the cryptocurrency until Wednesday.
“An update on Bitcoin Cash for our customers: sends and receives are functional,” the company said in a tweet at 11:15 p.m. ET. “Buys and sells on Coinbase.com and in our mobile apps will be available to all customers once there is sufficient liquidity on GDAX. We anticipate that this will happen tomorrow.”
Ouch.
The company said in a blog post it disabled trading because of “significant volatility.”
In addition to bitcoin cash spiking by almost $1,000, cryptocurrency trading volumes reached an all-time high above $49 billion, according to data from CoinMarketCap. Coinbase has struggled to fully function under such demand in the past.
On December 12, the company halted trading of litecoin and ether as the two cryptocurrencies reach all-time highs.
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