Coinbase may be heading to court again after a new class action lawsuit was filed against the firm by traders in the US District Court for the Northern District of California on Tuesday.
In their filing, the plaintiffs argue that the cryptocurrency exchange “made false and deceptive statements” regarding the Bitcoin fork to Bitcoin Cash in August of 2017.
They allege that the exchange caused the price of Bitcoin Cash to spike and then crash, enabling insiders to rake in serious profits.
Concurrently, the plaintiffs allege that Coinbase insiders, who knew that the exchange would list Bitcoin Cash, were able to start buying the cryptocurrency before the exchange’s customers were.
More specifically, the exchange allegedly allowed those insiders to take positions in Bitcoin Cash, then opened up the market to the public which pushed the price up.
Q8 Trade Gains Recognition for ‘Most Trusted Trading Platform in MENA’Go to article >>
Coinbase – Pump and Dump?
Once the price had been inflated to a certain level, Coinbase allegedly shut down trading for Bitcoin Cash – except for those individuals that had taken positions in the cryptocurrency prior to its going live on the exchange.
Moreover, when the exchange did launch Bitcoin Cash, only buy orders were available – that made it impossible for everyone, except those permitted to do so by the exchange, to sell the cryptocurrency.
Coinbase may respond to the allegations made in the class action lawsuit by the 20 of December 2018. A hearing has also been set for January 31 of next year.
The new class action lawsuit comes a month after another case against Coinbase, regarding the same Bitcoin fork, was dismissed by a judge.
Much like the class action lawsuit filed this week, former customer Jeffrey Berk, representing a number of different investors, said that the exchange had tipped off insiders to the Bitcoin Cash launch prior to it being announced publicly.
Judge Vince Chhabria said that Berk did not clarify how Coinbase could have better performed the Bitcoin Cash launch.