👀 Ones to watch: Undervalued stocks to buy before they report Q3 earningsSee Undervalued Stocks

Coinbase pays $6.5 million to settle U.S. false reporting charges

Published 03/19/2021, 06:12 PM
Updated 03/19/2021, 08:05 PM
© Reuters. FILE PHOTO: Representation of the virtual currency Bitcoin is seen on a motherboard in this picture illustration
LTC/USD
-

By Michelle Price

WASHINGTON (Reuters) - The U.S. Commodity Futures Trading Commission (CFTC) said on Friday digital asset exchange Coinbase Inc paid $6.5 million to settle charges it reported misleading transaction data that potentially inflated the apparent trading volume on its professional GDAX platform.

The regulator also fined the company for so-called "wash trades" in Litecoin and bitcoin by a former Coinbase employee on GDAX, it said in a statement.

The settlement comes ahead of a planned stock market listing for the world's largest cryptocurrency exchange which is valued at around $68 billion based on private market transactions, the company said on Wednesday.

The eye-popping figure, which implies Coinbase is more valuable than the New York Stock Exchange and Nasdaq, underscores how the perceived value of Coinbase has rallied in lock-step with the surge in the price of bitcoin.

"The settlement order today does not include any finding of harm to any Coinbase customer," a Coinbase spokesman said. "While Coinbase neither admits nor denies the CFTC’s findings, we firmly believe that Coinbase has always aimed to create a reliable and secure trading environment for the benefit of our customers."

Between January 2015 and September 2018, two Coinbase-operated trading programs matched orders with one another, resulting in transactions between accounts owned by Coinbase.

GDAX disclosed that Coinbase was trading on GDAX but failed to disclose it was operating more than one trading program and through multiple accounts, the CFTC said.

Coinbase subsequently included the information for these transactions on its website and provided that information to reporting services and exchanges, either directly or through access to its website.

© Reuters. Signage is seen outside of CFTC in Washington, D.C.

"Transactional information of this type is used by market participants for price discovery ... and potentially resulted in a perceived volume and level of liquidity of digital assets, including bitcoin, that was false, misleading, or inaccurate," the CFTC said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.