Coinbase Fraud Charges Dismissed by California Courts
The last two years have seen Coinbase fighting with the California Courts over a Bitcoin Cash dispute that occurred in December 2017. It was claimed that Coinbase committed fraud. However, as of today, those charges have been dropped by the courts. They were abandoned by the United States District Judge Vince Chhabra for the Northern California District determined that the allegations were unsubstantiated. They weren’t also significant proof that Coinbase halted trading for two minutes after they listed Bitcoin Cash on their exchange.
Vine Chhabra official statement to the public media was: “The plaintiffs identify three potential laws for the unlawful prong of the Commodities Exchange Act, the FinCEN rules, and New York state regulations. Even assuming Bitcoin Cash is a commodity subject to the Commodities Exchange Act, the complaint does not sufficiently explain how the launch manipulated the market for Bitcoin Cash or Bitcoin. Nor does it plausibly or coherently describe Coinbase and Armstrong’s motive to manipulate the prices.”
An Incompetent Launch
Bitcoin Cash was listed as a viable currency with Coinbase beginning December 2017. This period was when the exchange was reaching its peak and when BTC skyrocketed in value due to industry-wide speculation. However, when the spike in valuation for Bitcoin Cash began, the coin couldn’t be found on the exchange for two minutes. This led many investors and retail clients to believe that Coinbase shut down trading for two minutes to make insider trading. This is considered the highest level of fraud amongst financial companies in the USA.
The court’s official documents also stated: “The motion to dismiss the fraud claims is granted. The plaintiffs have not particularly pleaded their reliance on Coinbase’s allegedly fraudulent statements. Moreover, while the factual allegations paint a compelling picture of an incompetent launch by Coinbase, the complaint does not outline a coherent account of fraud by Coinbase, Armstrong, and Farmer.”
Jeffrey Berk, one of the prior traders with Coinbase, filed the lawsuit on behalf of all Coinbase traders. This never stopped this exchange from expanding their services. Coming soon are eight new digital currencies and an expansion of their Altcoin offerings.