Coinbase admits data manipulation, postpones IPO to April


The influential crypto exchange Coinbase is postponing its IPO planned for March to the next month, which is presumably in connection with a fine to the American supervisory authority CFTC, which accused the trading platform of multiple manipulation of trading data.

Accordingly, the “Commodity Futures Trading Commission”, the American supervisory authority for derivatives trading, announced on March 19 that it had reached an agreement with the crypto exchange in the proceedings against Coinbase. The allegations were that Coinbase should have deliberately transmitted trading data for Bitcoin incorrectly, and an employee of the platform is said to have carried out illegal proprietary trading in Litecoin in order to suggest high trading volumes and high demand for the crypto currency.

“Submitting false, misleading and inaccurate transaction data undermines the integrity of the pricing of cryptocurrencies,” said Vincent McGonagle, CFTC law enforcement director. He adds: “The prosecution of the present facts underlines that the CFTC is intervening to protect the integrity and transparency of this information.”

As stated in the regulatory agency notice, Coinbase deployed two automated trading programs called Hedger and Replicator from January 2015 to September 2018. Although the crypto exchange had admitted that it uses trading programs, it had not disclosed that they were used specifically to match trades. Because the crypto exchange has thus concluded open trades on the platform, the impression arose of much higher trading activity than actually existed.

As a result, the Coinbase API transmitted false or falsified trading data that was fed “directly” into reliable data sources in the crypto market such as the CME Bitcoin Real Time Index, CoinMarketCap and the NYSE Bitcoin Index.

The CFTC argues that this falsified data “may have simulated high trading volumes and high liquidity of cryptocurrencies such as Bitcoin, which were not true”.

In addition, the authority points out that a Coinbase employee concluded unlawfully pending trades for the LTC / BTC currency pair over a six-week period in 2016 in order to simulate liquidity and demand for the cryptocurrency Litecoin. The CFTC sees Coinbase as responsible for the actions of the employee.

As part of the agreement, the crypto exchange will be fined $ 6.5 million. At the same time, this is accompanied by an admission of guilt that the platform could at least for a short time be a mess.

IPO postponed?

This is probably already noticeable, because following the agreement with the CFTC, Bloomberg reports that Coinbase has postponed the IPO planned for March to April.

Citing internal sources, the news portal states that the envisaged IPO on the American stock exchange was initially postponed without giving any specific details.

However, not all Bloomberg reports on the crypto industry are to be taken at face value. The newspaper recently claimed that TRON boss Justin Sun had won the nearly $ 70 million record auction for a crypto artwork (NFT), which later turned out to be a hoax. In addition, Bloomberg had rumored a few days ago that the CFTC was investigating the market-leading crypto exchange Binance, which Binance boss Changpeng Zhao denied shortly afterwards.

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Coinbase admits data manipulation postpones IPO April


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