Bitcoin Cash deals frozen as insider trading is probed
Here's the stickiest thing about this entire thing to me: the name.
Roger Ver (one of the people behind bcash) has said repeatedly that he believes that his fork deserves the name "Bitcoin" and that it is the "real" bitcoin. It seems obvious that the intent here is to confuse people.
This, to me, seems like blatant fraud. It is concerning to me that coinbase would continue to allow this market confusion to build by listing this under the name "bitcoin cash". Things like this make me long for better regulation in this space.
Full disclosure: I say this as somebody who holds both bitcoin and bcash in nearly equal amounts. I mean to say that I don't really have a dog in this fight.
When Coinbase launched Bitcoin Cash at 17:20 PST (01:20 BST) it was valued at about $3,500 (£2,612) per coin.
At the time it suspended it, the company was quoting a price of about $8,500.
Trade of Bitcoin Cash was frozen just four minutes after it began on the firm's Global Digital Asset Exchange (Gdax) and existing orders were cancelled.
So the prices more than doubled in just 4 minutes. It might not even be a case of insider trading rather very, very thin order book.
That is why this happened:
> Update - All BCH markets will remain cleared and offline until 9am PST 12/20/17. At that time, BCH markets will enter post-only mode for a minimum of one hour to allow liquidity to be established.
That is to say no matching orders allowed of any kind - limit or market which can suck the liquidity and cause a huge price jump.
One might think that Coinbase/GDAX understand liquidity and market making after so many years. But no. Makes you wonder what kind of stuff is going on in other exchanges.
Some people do know that its going to be listed. https://www.reddit.com/r/CoinBase/comments/7kfbjj/will_coinb...
The user mukiwa2 said "Bitcoin Cash coming in the next few days!!" 2 days back in that thread and he even joked saying he knew an employee in Coinbase.
That response has since been deleted. I was just talking to my friend about this. Here is the snapshot: https://imgur.com/a/cLlp7
Some questions I'm curious about (including other exchanges besides Coinbase too).
Do Coinbase employees have to disclose their external crypto-currency trading accounts (as well as for immediate family members) to the internal compliance dept?
Is Coinbase employee crypto trading activity subject to pre-approval prior to trade execution?
What is their policy regarding disclosure of material non-public information of pending changes/additions to their own exchange?
This is the second event involving BCH which is looking very "artificial" for the lack of a better word. About a month ago, BCH started an abrupt up-climb while the prices on BTC started to fall dramatically. BTC recovered soon after by hitting all-time highs while BCH prices fell pretty hard. Now we get these talks of insider trading at Coinbase. I don't have much stake in cryptocurrencies and I actually did not mind the BCH fork, hoping that the 2 cryptos can just co-exist. But from what I'm seeing now this has nothing to do with advancing Bitcoin and is just a money grab by Roger Ver.
"Brian Armstrong responded that he had repeatedly warned his staff not to disclose its launch plans to family or friends or to trade in the digital asset themselves."
So the whole staff new about this move, from which it is to be expected to move the market when published?
Charitably put, that's naive.
I watched this happen live. There was a very obvious trading software malfunction. Here's what I watched happen.
People could place orders before trading started. I was watching BCH/USD and BCH/BTC which had a fixed price, $3100 USD and 3.00 BTC respectively.
BCH/USD had a huge amount of buy pressure (people buying BCH with cash); BCH/BTC had a huge amount of sell pressure (people dumping the airdrop).
Only BCH/USD went live; BCH/BTC remained paused. (That was weird, I thought it looked like a human somewhere hit enter too soon, but apparently it was intended)
Once trading started (BCH/USD only), people couldn't place new sell orders. The unlimited buys cleared, including the guy on reddit whose order was "Buy $100000 USD of BTC at market price", which was filled at 6k and then he was unable to place a sell at 9k. Apparently placing buys without limits is common because unlimited buys are filled before limited ones are.
Since you couldn't place a new sell; the price was not bounded; the book cleared and everything was stuck at 9.5k for a couple minutes. There was a little bit of trades, not sure if it was only people with existing orders that were glitched or if maybe some people weren't glitched, maybe all the activity was orders placed before trading opened.
They realized the issue and paused trading; orders began to accumulate again roughly around here; here's a screenshot of the orders accumulating https://i.imgur.com/0NTyYXx.png There is incredible sell pressure here, the price was obviously out of whack with actual supply/demand.
(MY SPECULATION) Since there was never a functioning market I'd expect Coinbase to rewind all the trades which is what it looks like they are doing.
I might have gotten some of the details wrong, I am just a detached layperson learning about finance who happened to see this go down.
Sorry reddit, no consipiracy here. But none of those posts in r/bitcoin are actual humans anyway, it's all fake bots and a couple poor suckers who don't realize they're arguing with a content farm. Here's some required reading about the bitcoin information manipulation shitshow. https://np.reddit.com/r/BitcoinMarkets/comments/6rxw7k/infor... TLDR: Nothing is real, everything is fake news, you think it can't possibly be that bad? it's actually worse than that.
>"I will not hesitate to terminate the employee immediately and take appropriate legal action."
What possible legal action can he take? Breach of contract, maybe?
There's no laws regarding cryptocurrency insider trading or manipulation as far as I know.
This same pattern seems to repeat immediately preceding any "big announcement" for pretty much every single coin/token out there. It's obvious that insider trading is rampant across the entire cryptocurrency market.
I hope Coinbase and their employees' activities are properly investigated at some point. I think they'll find a lot of "interesting" activity going back very far, assuming Coinbase hasn't "lost" or modified records to hide those activities by now.
Why is the name Blockstream constantly popping up as a source of blame for BTC's issues?
That seems to be a theme in the last day or two by the BCH proponents.
Reminds me of when ZRX was added to Poloniex out of the blue. I very much doubt people with such knowledge wouldn't trade based on it. It's practically impossible to catch anybody short of getting the SEC involved. It's not like Coinbase is keeping track of everyone's wallets or has any ability to get info from other exchanges.
I also think it's funny that people are complaining about this. Isn't this part of the appeal of crypto trading? That the government doesn't 'level' the playing field?
Watching this all go down, I don't see why it would be insider trading. They opened their retail side (Coinbase) at the same time as their exchange (GDAX) and gave minutes notice before going live. There was about 0% chance there would be enough liquidity on the exchange to support a dual launch, so the price skyrocketed. There wasn't time to deposit enough BCH to give liquidity either. I don't care about traders making bad moves on GDAX, but to screw their retail clients so much is not cool.
Did anyone not expect this? For example, I believe they may add Ripple next so I have made moves into Ripple knowing the price will spike if they add support. What's to prevent Coinbase employees to do the same?
The initial BCH trading on GDAX was pitiful. They shut it down really quickly.
Regulations are the next logical step here. My best guess is that the red tape will at least dampen a lot of the mania around cryptocurricines and bring people back to reality.
undefined
It was so apparent if you watched just a few exchanges.
I will not hesitate to terminate the employee
Surely if there is wrongdoing it is not the work of one employee.
I don't have a lot of sympathy for anyone who got burned by this. Anyone who is trading crypto knows that there is a lot of risk. Also, everyone who was paying attention knew that BCH was coming to Coinbase before the end of the year, since September. If you're acting like this is a big deal, put your big boy pants on and/or stop trading crypto.
So should I sell the BCH in my wallet right now, before 9AM PST?
Is Bitcoin considered a security now?
But but but crytocurrency is so useful right??
1.) It's just like dollar! Shoot, coinbase won't allow me to trade it for 3 months! Every country is banning it? It went up 20% then dropped 50% today?!
2.) It's just like Visa!! Damn it costs me $500 to send $500
3.) It's just like gold! So rare....oh wait, another crytocurrency just came out with 100M unit of supplies.
4.) It's just like the bank!! Damn another exchange got shut down/frozen. The insiders made out like bandits
Oh well, who cares. It's for gambling!!!!
Cryptocoins are all a big fraud - fake money to buy fake drugs. This comes at no surprise.
I mean lets be honest... If you knew in advance that this was going to happen, who wouldnt have done something like this? You could have made a quick 100k+.
But but but crytocurrency is so useful right??
1.) It's just like Visa!! Damn it costs me $500 to send $500
2.) It's just like the bank!! Damn another exchange got shut down/frozen. The insiders made out like bandits
3.) It's just like gold! So rare....oh wait, another crytocurrency just came out with 100M unit of supplies.
4.) It's just like dollar! Shoot, coinbase won't allow me to trade it for 3 months! Every country is banning it? It went up 20% then dropped 50% today?!
Oh well, who cares. It's for gambling!!!!
