Trading of Bitcoin Cash has been frozen as one of the largest cryptocurrency exchanges carries out an investigation into insider trading.
Coinbase, a massive cryptotrading exchange, has temporarily frozen trading on the altcoin as a result of fears its own works may have exploited the currency’s move to the trading platform.
The San Fransisco-based firm announced the move after the price of Bitcoin Cash (BCH) spiked, according to the BBC.
Coinbase only began letting its users transfer the currency on Tuesday, taking the crpyto world by surprise.
But it has already decided to temporarily suspend trading, four minutes after allowing transactions, thanks to suspicions of workers taking advantage of the move for their own financial gain.
The company’s chief executive intervened after several market watchers began making allegations of illegal activity across social media.
Brian Armstrong responded saying he had repeatedly told his staff not to disclose the launch of BCH to family or friends, and even said they shouldn’t trade in the Bitcoin-alternative themselves.
some serious insider trading has just gone down with Bitcoin Cash being announced on Coinbase, have never seen anything more obvious in my life
— Erich Landa (@erich_landa) December 20, 2017
He wrote on Medium:
It appears the price of Bitcoin Cash on other exchanges increased in the hours before our announcement.
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.
BCH is merely an alternative to Bitcoin which was created after transaction times and fees of the original cryptocurrency became too frustrating for many users.
Looking at trading prior to Coinbase adding Bitcoin Cash, it’s obvious word leaked out prior to addition. US Gov’t will undoubtedly have the knives out for them. Either insider trading or someone inside leaked info. Regardless, Coinbase can only blame itself for what’s to follow.
— Jordan Schachtel (@JordanSchachtel) December 20, 2017
Bitcoin Cash distinguishes itself from Bitcoin by allowing their blockchain to process bigger chunks of data at a time.
Although this isn’t the first fork for Bitcoin, it is distinct because everyone who owned BTC was offered a matching sum in BCH.
It currently sits pretty as the third biggest cryptocurrency in terms of market cap – ie the total value of a company trading – of $59 billion, according to Coinmarketcap.
Trading of Bitcoin Cash is expected to re-open later on today.