After settling the accusations of inappropriate reporting of foreign exchange volume and “auto-trading” with the CFTC yesterday, reports have emerged that cryptocurrency exchange giant Coinbase is scheduled to postpone its stock listing until next month. The company was expected to go public in March.
Yesterday, March 19, the Commodity Futures Trading Commission announced an agreement with Coinbase on charges that the company reported commercial data incorrectly about Bitcoin and that an employee “traded on his own” to create the illusion of volume and demand for Litecoin.
“Reporting false, misleading or inaccurate transaction information undermines the integrity of the prices of digital assets,” said Chief Inspector Vincent McGonagle. “This enforcement action sends the message that the Commission will act to safeguard the integrity and transparency of such information.”
The CFTC order says that between January 2015 and September 2018, the company operated two automated trading programs, Hedger and Replicator. Although the exchange disclosed the use of a trading program, they did not disclose that they were using two that often corresponded to trading.
As a result, the Coinbase API delivered fraudulent trading data to entities such as CME Bitcoin Real Time Index and CoinMarketCap, as well as the NYSE Bitcoin Index via Coinbase’s “direct transmission”.
The CFTC notes that this falsified data “potentially resulted in a perceived volume and liquidity level for digital assets, including Bitcoin, which was false, misleading or inaccurate”.
In addition, the announcement notes that an employee intentionally placed the corresponding LTC / BTC trades over a six-week period in 2016 to create the illusion of liquidity and demand for LTC. The CFTC found Coinbase “indirectly responsible” for these fraudulent transactions.
The total penalty for these expenses is $ 6.5 million.
Delayed direct listing
After the deal with the CFTC, a report last night by Bloomberg says the exchange has postponed its direct listing of shares until next month.
Citing “people familiar with the matter,” Bloomberg said plans for a March share offering on US stock exchanges “fell” and no further details were provided.
Earlier this month, Bloomberg cited anonymous sources to report that Justin Sun had won Christie’s nearly $ 70 million auction for a Beeple NFT, which later proved to be false, as well as that Binance was under investigation by the CFTC for allowing US residents to place illegal businesses. Binance’s CEO, Changpeng Zhao, vigorously denied the characterization of the report.