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Investors who are furious with the allegation that Coinbase employees engaged in insider trading prior to the exchange their decision to invest in crypto- currency, according to a prominent leader of a venture capital company.
Coinbase will investigate alleged employee insider trading
As CCN reported, Coinbase made surprise announcement on Tuesday that it had added full support for bitcoin, allowing customers not only to claim their BCH which had been blocked since the August range but also to buy and sell BCH. Coinbase and GDAX.
The spot price of bitcoin rose before the announcement, causing many people to accuse Coinbase employees of engaging in insider trading by buying bitcoin, rightly assuming that the price would explode once public news
.
Although there is currently no tangible evidence to support this claim, Brian Armstrong, CEO of Coinbase, has written a blog promising to launch a full investigation and dismiss any employee who has traded in the company. Bitcoin money in violation of company policies. in the weeks leading up to the announcement.
Investors who "just want" should stay away from cryptocurrency
However, despite the best efforts of Coinbase, there will probably be no way to definitively prove that no one has been informed of the announcement, whether directly or through the Internet. intermediary of a family member or associate.
Commenting on the allegations, the investment expert in cryptocurrency Ari Paul wrote on Twitter that the insider's offense is "impossible to prevent" and that the best companies can explicitly prohibit employees from negotiating particular pieces before the big announcements.
"It's literally impossible to prevent," said Paul, the chief investment officer at BlockTower Capital, a venture capital firm specializing in cryptocurrency. "A team needs to integrate a new piece on the platform.There is no way to keep a secret that requires the involvement of a team." And there is no way to prevent those who know the secret of secretly buying a cryptocurrency. "
Paul, who previously worked as a portfolio manager for the $ 8 billion endowment of the University of Chicago, said the insider trading laws are "quite subtle" and do not have the same rules. Often do not apply to commodities or currencies
.
"Insider trading laws apply primarily to equities, not commodities or currencies, and the same thing happens (and is often legal) in traditional currency and foreign exchange markets. commodities, "he wrote, adding that investors who want a fair deal should reconsider their decision to participate in the" no confidence "cryptocurrency markets.
"Is it" unfair "? Of course.If you just want, cryptocurrency is not for you.Get with assets that are based on the trust of the regulatory and legal infrastructure Cryptocurrency is "without trust", which also means it's mostly uncontrollable, "he concluded.
Write to Josiah Wilmoth at josiah.wilmoth (at) cryptocoinsnews.com.
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