Coinbase is paying the price for its previous cryptocurrency trading practices. Coindesk and the Wall Street Journal they say the Commodity Futures Trading Commission fined Coinbase $ 6.5 million for allegedly providing misleading information about its trading volumes. The company’s Coinbase Pro exchange ran two programs that sometimes traded Bitcoin and Litecoin between 2015 and 2018 and included those trades in data shared with external services – making it appear that there was more trading volume than there actually was.
Coinbase also did not disclose that it had more than one program or was trading through multiple accounts, the CFTC said. The exchange was responsible for its actions, the commission added, as a former Coinbase employee abused programs between August and September 2016 to buy and sell encryption in “laundering operations” that artificially inflated the activity.
The commission did not accuse Coinbase of doing anything wrong and suggested that it was more careless than intentional.
CFTC commissioner Dawn Stump was concerned that the decision would imply that her organization had more power to regulate crypto exchanges than it had, and emphasized that Coinbase’s activity was firmly in the past. The activity took place “several years ago”, and the employee in question left years before the fine. Coinbase had not repeated this behavior since, added Stump.
The decision comes at a crucial time for Coinbase and the industry as a whole. Interest in cryptocurrency has increased in recent months, and Coinbase may play a key role in this increase as one of the most well-known exchanges. The fine can eliminate some uncertainties and help Coinbase to focus on its future, even though the change also highlights some of the uncertainties about regulations.