Bitcoin Cash Market Frozen After Insider Trading; Value Drops Below 17K

Ashley Carr
December 22, 2017

The San Francisco-based company said it's investigating a price increase in Bitcoin cash ahead of the announcement. Still, for those concerned about insider trading, Coinbase CEO Brian Armstrong was quick to point out that Coinbase employees are locked out of the Bitcoin Cash game for now. As of now, both Coinbase and GDAX seem to be experiencing some irregular outages, so Bitcoin Cash trading has been suspended temporarily.

Bitcoin Cash prices surged to almost $9,000 on Tuesday prior to the announcement going live.

There are usually some differences in price for most cyrptocurrencies from exchange to exchange, as the length of time it takes to transfer cryptocurrencies makes arbitrage trades hard.

And, within minutes of the announcement, prices of Bitcoin plunged, falling below $17,000 from a high of $19,694 on Sunday (according to Coindesk). There was a sharp surge in prices of bitcoin cash just hours before Coinbase announced it is going to open up bitcoin cash trading on its platform. If we find evidence of any employee or contractor violating our policies - directly or indirectly - I will not hesitate to terminate the employee immediately and take appropriate legal action.

While it's unclear whether any Coinbase or GDAX employees actually acted on this information, the company explained via Twitter, "Coinbase maintains a strict trading policy and internal guidelines for employees".

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Bitcoin cash was created as an offshoot of the original bitcoin in August. Bitcoin Cash changes one key characteristic of Bitcoin by allowing larger chunks of data to be written to its blockchain at one time.

The resulting cryptocurrency - dubbed Bitcoin Cash - is up around 50 per cent within the last few hours, trading around $3,775 or £2,815 at the time of writing.

Bitcoin Cash sends and receives are functional. The policy prohibits employees and contractors from trading on "material non-public information", such as when a new asset will be added to our platform.

However the core Bitcoin developers disagreed with the proposed changes, so a group chose to copy and modify Bitcoin's code to create Bitcoin cash. Bitcoin Cash is now the third largest cryptocurrency in terms of market capitalization, sitting at more than $29 billion compared to bitcoin's more than $294 billion. GDAX said all of its Bitcoin Cash markets would remain offline until noon Wednesday, Eastern Time.

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