A consent order by the Commodity Futures Trading Commission indicates that the offense occurred between January 2015 and September 2018. The exchange allegedly devised the Hedger and Replicator trading programs to generate misleading orders. The CFTC adds that the wash trades artificially inflated Coinbase trading volumes giving an impression of high liquidity. The inflation consequently appealed to more investors. The investigation also unearthed the role of Coinbase employees in the scheme. CFTC Acting Director of Enforcement Vincent McGonagle adds that the fine is a warning to the cryptocurrency industry over illicit practices.
Coinbase maintains no harm on users
In a statement, Coinbase notes that the CFTC probe shows the there was no harm on the users’ end. However, the exchange did not admit or deny the allegations. The CFTC probe comes as Coinbase prepares to go public through a direct listing. The ongoing cryptocurrency bull run has propelled the exchange’s valuation to soaring levels. The exchange currently has a value of almost $67.6 billion. Coinbase hosts about 43 million users with close to 7,000 institutional customers.
