The Commodity Futures Trading Commission (CFTC) said in a press release on Friday that the cryptocurrency exchange platform Coinbase paid $ 6.5 million to resolve regulators’ claims that it reported misleading transaction data.
According to the CFTC, between January 2015 and September 2018, “Coinbase recklessly delivered false, misleading or inaccurate reports on transactions in digital assets.” The agency claims that two trading programs operated by Coinbase generated orders traded among themselves, which could have misled traders about the volume of trading on the exchange now called Coinbase Pro.
The CFTC also fined Coinbase for what is known as “laundering operations” in the cryptocurrency Litecoin and bitcoin that were conducted by a former Coinbase employee on Coinbase’s GDAX platform. Washing operations are prohibited because they create a false appearance of trading volume.
A Coinbase spokesman said in an emailed statement to The Verge who did not admit or deny the CFTC’s accusations and “proactively engaged with the CFTC” during his investigation. The statement notes that the settlement order “does not include any finding of damage to any Coinbase customer.” The company says that “I firmly believe[s] that Coinbase has always aimed to create a reliable and secure trading environment for the benefit of our customers. “
Last month, Coinbase publicly filed the paperwork to list its shares on the NASDAQ. According to the company’s S-1 prospectus, Coinbase had 43 million verified users at the end of 2020, with a total of $ 90 billion of assets in custody. Since its founding in 2012 as a bitcoin trading platform, Coinbase has managed about $ 456 billion in transactions. Last year, it had revenues of US $ 1.2 billion, generating a profit of US $ 322 million.