Coinbase Hit With Lawsuits Alleging Insider Trading And Stealing Customer Funds

The US exchange Coinbase is under some serious legal trouble. To start with, Coinbase needs to deal with the attention of the Internal Revenue Service of US requesting the exchange to handover the trading histories of its clients. A couple of days back, Coinbase gave the records of its 13,000 customers to the authorities.

Presently, the lawsuits have been filed on 1st and 2nd March that points out insider trading and unclaimed digital currency funds.

Jeffrey Berk, the lead plaintiff in the lawsuit alleges:
“On December 19, 2017, a month after tipping off its own employees as to when it would commence fully supporting BCH, Coinbase suddenly announced that it was opening up its books to the buying and selling of BCH within minutes after its announcements.”

He additionally states at the following point that:

“Unsurprisingly, those who had been tipped off, immediately swamped Coinbase and the GDAX with buying and sell orders, thinning the liquidity but obtaining BCH at fair prices. The market effect was to unfairly drive up the price of BCH for non-insider traders once BCH came online on the Coinbase exchange.”

Coinbase did its own investigation concerning the allegations of insider trading too when the bitcoin price multiplied on Coinbase when contrasted with different exchanges. However, it has not uncovered if the investigation is done or if any move has been made against any of the workers. Presently, the lawsuit is requesting a jury trial to resolve the issue.

The second complaint is filed by Jeffrey Hansen and Timothy G Faasse that further says “individually and on behalf of all other similarly situated” blames Coinbase for unfair and unlawful business practices.

It is claimed by the plaintiff that Coinbase sealing cash that is an unclaimed digital currency that is alluded as being similar to a circumstance where somebody composes a cashier’s check to a payee who doesn’t cash it. Subsequently, the bank chooses to keep the funds.

The plaintiff expresses that:

“Coinbase users can send Bitcoin, Ethereum, Litecoin and Bitcoin Cash (collectively “Cryptocurrencies”) to an email address. Plaintiffs and the Class were sent an email from Coinbase stating they had Cryptocurrency, with a link to create a Coinbase account to redeem it. But until 2017, most people never heard of a “bitcoin” or cryptocurrency, so most of these emails were disregarded. And most of the Cryptocurrency went unclaimed.”

In the following point, he additionally illustrated:
“But instead of notifying Plaintiffs and the Class they had unclaimed Cryptocurrencies or turning those Cryptocurrencies over to the State of California as required by California’s Unclaimed Property Law…Coinbase kept them.”

Presently, they are fundamentally asking for an answer where the exchange should return the digital currencies to their intended beneficiaries.


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