In 2017, Coinbase officially launched commercial orders with the Bitcoin Cash cryptocurrency, which had to be suspended within 2 minutes of existence due to the high level of volatility that the cryptocurrency presented.
A judge from the Northern District of California dismissed the charges brought by customers from the US-based exchange, Coinbase, who said the company fraudulently handled the launch of commercial operations with Bitcoin Cash in 2017.
At that time, Coinbase announced the launch of the exchange between USD and Bitcoin Cash, but suspended operations two minutes later, signaling high volatility in the price of digital currency. The accusations indicated that the exchange manipulated the prices of the digital currency since the announcements in which it informed the beginning of operations generated an increase in the value of BCH.
The complainants also alleged that Coinbase chose that date just to take advantage of the fact that the Chicago Mercantile Exchange (CBOE) opened operations for trading Bitcoin futures the previous day, there being some correlation between the execution of orders with higher limits.
The claim may not be valid.
After presenting these arguments, Judge Vince Chhabria dismissed the allegations in which the alleged victims blamed the exchange for committing fraud for the launch of operations, freeing Coinbase CEO Brian Armstrong and the product manager, David Farmer, of all responsibility.
In his sentence, Chhabria alleged that although the accusations showed that the launch of this commercial modality proved completely ineffective, there were no clear indicators to ensure that what happened was due to a kind of manipulation perpetuated by Armstrong and Farmer.
The investigation into the case showed no evidence that managers handled privileged information that benefited private interests over users’ rights.
The day of the launch of Bitcoin Cash through Coinbase, the price of the digital currency increased exponentially reaching USD $9,500 before suspending operations. This resulted in inconvenience for both buyers and sellers interested in operating through the platform.
Basically, Judge Chhabria states that it is a conflict generated by a risky investment, which could mean that it is not necessarily the fault of the exchange, since they had no direct control over the values of the cryptocurrency or specific market positions that will benefit, although these cases of extreme volatility certainly attract attention.
Coinbase remains the target of accusations
Although the judge dismissed the allegations of the plaintiff, it seems that those affected could continue the case alleging negligence on the part of the exchange. In this regard, Chhabria indicated that there was evidence that Coinbase did not adequately fulfill its functions as it could not maintain the functional market for customers.
At the moment it is clear that neither the exchange nor its managers must face accusations of fraud and unfair competition. However, it would be necessary to wait and see what kind of action the plaintiffs undertake to give continuity to the current case.
Other Coinbase interests
Coinbase recently announced that it is evaluating the possible addition of eight new crypto assets to its exchange platform, among which are the native tokens of the Matic Network (MATIC) and Harmony (ONE) projects. These two candidates experienced a rise in the market that, at its highest point, reached 66.5% and 39.3%, respectively.
The statement published by the US exchange house mentions that six other crypto assets are also being evaluated, in addition to those mentioned previously. These are: SOMETHING, from Algoraland; ATOM, from Cosmos; DCR, from Decred; ONT, from Ontology; DASH and WAVES, of their homonymous projects. However, only MATIC and ONE enjoyed significant growth in the cryptoactive market between yesterday and today.
This impact on the market (although it does not mean that these cryptocurrencies will be available tomorrow) was enough to arouse interest in several investors.
After all, Coinbase is a reputable exchange that, like any other, is vulnerable to all kinds of criticism, grounded or not. We will see how the exchange decides to handle the situation and how justice proceeds in this case.