As Core Media recently reported, popular U.S.-based cryptocurrency exchange Coinbase recently added Bitcoin Cash (BCH) to its platforms – Coinbase and GDAX – but had to quickly pause the order books due to “significant volatility.” Bitcoin Cash’s price surged over 50% on the exchange’s move, but some suspect of insider trading as it started surging on other exchanges before the move was made public.
The controversial addition led the company’s CEO, Brian Armstrong, to publish a blog post stating potential insider trading would be investigated, adding he would fire any employee who engaged in it. Now, Bitcoin.com and prominent Bitcoin Cash supporter Roger Ver came out in support of insider trading.
Through a tweet, Roger Ver cited American economist Milton Friedman, and pointed out that insider trading was legal until 1968.
"You should want more insider trading, not less." – Milton Friedman
"There shouldn't even be an SEC" – @BobMurphyEcon
Fun fact: Insider trading was legal until 1968https://t.co/SYOXg8oU1F
— Roger Ver (@rogerkver) December 21, 2017
On CNBC’s fast money, while defending Bitcoin Cash over Bitcoin, Roger Ver addressed the controversy and added that “insider trading is a non-crime,” as it helps the price reflect what the market price would be after the news became public. Moreover, he stated that exchanges are already being heavily regulated, and that buyers need to be aware of the service they use, so they don’t “depend on the government to keep you safe from everything out there in the world.”
Per the U.S. Securities and Exchange Commission (SEC), insider trading is an illegal activity, as it takes advantage of non-public information, and in turn undermines investor confidence in the “fairness and integrity” of the market.
Bitcoin Cash trading has since resumed on GDAX, and there are currently no updates on the insider trading investigation. On social media, various users have shared proof they reported the situation to authorities – that might take action, given that Coinbase is a regulated exchange.
Earlier this year, it was revealed Coinbase was unofficially under CFTC scrutiny over an Ethereum flash crash on GDAX, that saw the cryptocurrency’s price drop from about #317 to $0.1 in a split second before it quickly recovered.
At press time, Bitcoin Cash is currently trading at $3,503 as the cryptocurrency’s price seems to be correcting, following a surge from about $1,800 to over $4,000 this week, thanks to Coinbase’s addition. The correction is likely taking place as users who had Bitcoin on Coinbase at the time of the hard fork can now sell and move their Bitcoin Cash.