Insider trading alleged after Bitcoin Cash blast-off

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He plans to terminate any employee found violating company policy and take appropriate legal action.

Armstrong said that the Coinbase Staff, friends and family have been forbidden from trading on Coinbase ever since it has been planning to bring the support for Bitcoin Cash. We made this decision to ensure a fair and orderly market. At the time of publishing this article, the price of a Bitcoin was $17,659.29.

Bitcoin cash was created on 1 August when Hong Kong-based exchange Bitfinex said a minority of bitcoin miners would create a new version of bitcoin to make trading faster and easier.

When the Bitcoin "crash" happened earlier in the day, Gemini - the exchange which works with the CBOE on its futures trading - said that they couldn't process transactions due to problems on the blockchain related. From a cursory glance, it looked like someone knew about the Coinbase move in advance, triggered a flurry of trading that led to a spike in price, and took advantage of this for a massive windfall.

Although there have been other Bitcoin splits before, this "fork" was unusual in that everyone who owned the original virtual currency was offered a matching sum of Bitcoin Cash.

Bitcoin price saw a major correction in a matter of just 24 hours when it dipped from a high of $19,000 to $16,390 - a near 15 per cent decline.

The allegation from some critics was that Coinbase staffers could have purchased Bitcoin Cash - or BCH - on other exchanges at a lesser value - all the while knowing it was about to open for public trading.

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Were those bitcoin cash increases driven by insider trading?

Coinbase chief Brian Armstrong stressed in a blog post that there was no evidence of insider trading "at this time", but also promised a zero-tolerance approach.

Armstrong notes that Coinbase has strict confidentiality policies and doesn't allow for insider trading.

Bitcoin has soared to new highs this month as regulated USA derivatives exchanges in Chicago started trading futures in the unit.

"We've had a trading policy in place for some time at Coinbase".

"All BCH books will enter cancel-only mode, and all existing orders will be cleared".

At present, Bitcoin Cash is the third biggest cryptocurrency in the world with a market capitalisation of $55.8 billion, according to Coinmarketcap.