On Aug. 18, three financial researchers at the University of Technology Sydney in Australia allege that insider trading may have occurred on the Coinbase platform over the past four years, saying the problems extend beyond a case brought by the U.S. Department of Justice in July.
In a paper that has not yet been peer-reviewed, Prof. EsterFelez Vinas, Prof. Talis Putnins, and PhD student Luke Johnson estimated that between September 2018 and May 2022, 10%-25% of tokens listed on the Coinbase platform were There was an insider trading issue involving funds reaching $1.5 million.
Researchers examined 146 Coinbase-listed cryptocurrencies and tracked the prices of those cryptocurrencies 300 to 100 hours before listing, looking for unusual trading patterns on decentralized exchanges (DEXs) for the underlying assets, and found that they were listed on a decentralized exchange (DEX). About 250 hours before the announcement, there was a significant rise in the price of relevant assets, and the rise continued until the listing announcement was released.
In response, a Coinbase spokesperson said in a statement: “Coinbase takes allegations of front-running very seriously and we work hard to ensure that all market participants have access to the same information. As part of this work, we have Take steps to minimise the likelihood of technical signals during asset testing and integration steps. We have zero tolerance for illegal conduct, monitor it and investigate when appropriate.”
Coincidentally, in July of this year, the former manager of the cryptocurrency trading platform Coinbase was arrested in a US cryptocurrency insider trading case. The U.S. Department of Justice said former Coinbase manager Ishan Wahi was charged with providing information to his brother and a friend about a crypto asset that was about to be listed on Coinbase. The inside information leaked by Ishan Wahi led the other two defendants to trade shortly before at least 14 Coinbase public listing announcements involving at least 25 cryptocurrency assets.
Coinbase CEO Brian Armstrong has said that this incident is a wake-up call for Coinbase and the entire encryption field. Insider trading is illegal and can erode users’ trust in you. We will continue to investigate misconduct and turn them over to law enforcement, where they will face real legal consequences, including serving time in prison.
At present, Brian Armstrong has not yet responded to the latest accusations.