- The company did not manipulate the prices in a fraudulent manner.
- Coinbases may still be accused of negligence in relation to BCH launch.
District Court Judge Vince Chhabria in San Francisco ruled that the company demonstrated “incompetence born of haste” at the launch of Bitcoin Cash in 2017.
The Judge emphasized that the cryptocurrency exchange had not committed fraud, but rather was guilty of negligence.
“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 for Bitcoin. Nor does it plausibly or coherently describe Coinbase and Armstrong’s motive to manipulate the prices,” he said.
At the end of 2017, the company launched Bitcoin Cash (BCH) trading but was forced to stop it in two minutes due to high volatility and suspicious activity. The price began to grow rapidly several hours before the listing announcement. The company was accused of insider trading at that time.
According to the judge, the users who bought BCH at inflated prices were primarily affected. He noted that the company suspended the trading too early and thus disrupted the normal functioning of the market.
Some BCH buyers believe that the company might have avoided the volatility issues if it had announced the listing beforehand.
In March 2018, BCH buyers filed a class-action lawsuit against Coinbase, stating that the company caused an artificial price growth due to insider trading.
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