The co-founder of Coinbase, one of the most popular cryptocurrency trading platforms, says the company is investigating claims that its staff were involved with insider trading.
"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," wrote CEO Brian Armstrong in a blog post Wednesday (20 December).
His comments followed accusations that Coinbase employees may have secretly profited following the launch of Bitcoin Cash – a new form of cryptocurrency which opened for trading on the website on Tuesday (19 December) at higher values than other exchanges.
The allegation from some critics was that Coinbase staffers could have purchased Bitcoin Cash – or BCH – on other exchanges at a lesser value – all the while knowing it was about to open for public trading.
Indeed, price charts showed the price of Bitcoin Cash increasing just prior to the company's official announcement. Armstrong, responding to mounting speculation, stressed that there was "no indication of wrongdoing at this time."
In a post on Medium, he elaborated: "We've had a trading policy in place for some time at Coinbase. The policy prohibits employees and contractors from trading on 'material non-public information', such as when a new asset will be added to our platform.
"All Coinbase employees and contractors were explicitly prohibited from trading Bitcoin Cash and from disclosing our launch plans over a month ago. This was communicated multiple times via multiple channels to employees. The trading restriction, which applies to all personal trading activity on any platform, remains in effect now.
"I take the confidentiality of material non-public information very seriously as CEO. Given the price increase in the hours leading up the announcement, we will be conducting an investigation."
The launch itself was hit with performance issues and trading was ultimately cut short.
Bitcoin Cash is a fork of the Bitcoin cryptocurrency which launched in August this year. Its namefellow had a meteoric rise in 2017, but many experts believe it is a bubble soon set to crash.