US authorities fined Coinbase $ 6.5 million for falsifying tra | Crypto Investment
US authorities fined Coinbase $ 6.5 million for falsifying trading volumes
Coinbase cryptocurrency exchange on Friday entered into a settlement with the US Commodity Futures Trading Commission (CFTC) and is due to pay a $ 6.5 million fine. The settlement dealt with two issues: information on trading activity on the GDAX platform (now Coinbase Pro) and laundering allegations.
“Between January 2015 and September 2018, Coinbase irresponsibly submitted inaccurate, misleading and inaccurate reports relating to digital asset transactions, including bitcoin, on the electronic trading platform GDAX, of which it operated,” the US regulator writes.
For example, Coinbase used automated trading programs Hedger and Replicator, whose orders were compared with each other from time to time, which led to an overestimation of trading volumes. As a result, traders may have been more inclined to enter into deals in a particular pair, seeing increased activity in it. The CFTC notes that Coinbase reported its own trading on GDAX in the platform's rules, but did not disclose information that it uses more than one program to do this and trades through multiple accounts.
“This type of transactional information is used by market participants to make decisions about trading or owning digital assets. Potentially, they led to the formation of the estimated volumes and levels of liquidity of digital assets, including bitcoin, which were unreliable, inaccurate or misleading, "the regulator adds.
The CFTC did not ignore the facts of intentional laundering trading on Coinbase. It was found that for six weeks from August to September 2016, a former exchange employee manipulated the market by placing buy and sell orders in the LTC / BTC pair to create the appearance of active trading and interest in Litecoin. The CFTC claims that on some days this employee's transactions could account for up to 99% of the trading volume of this pair.
As part of the agreement with the CFTC, Coinbase has neither admitted nor denied any guilt. In a filing for a public listing of her shares in February, she mentioned that in July 2017, the US authorities opened an investigation into a number of issues, including “the events on the Ethereum market in 2017, the transactions of one of the Coinbase employees who was him at the time, the listing of Bitcoin Cash on the company's platform and the operation of certain algorithmic functions of liquidity management ”.
To prevent the public from creating a misconception, CFTC Commissioner Don Stump warned that the agency does not regulate platforms such as Coinbase. She also noted that the settlement refers to violations that were committed several years ago.
“The transmission of inaccurate, misleading or inaccurate transactional information undermines the integrity of digital asset valuation. This enforcement action serves as a message that the Commission will take steps to ensure the integrity and transparency of such information, ”said CFTC Acting Director of Enforcement Vincent McGonagle.
