In a blog post, Coinbase CEO Brian Armstrong said that users are trying to determine which tokens would be listed based on blockchain activity.
“While this is public data, it isn’t data that all consumers have easy access to, therefore we seek to eliminate these information asymmetries,” he said.
The use of privileged knowledge to affect the price of a stock or cryptocurrency is known as insider trading. Section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5 prohibit unauthorised trading on inside business information in order to maintain employee confidentiality.
He also promised to track out leaks from Coinbase workers using the expertise of blockchain forensics firms. “We have zero tolerance for this and are monitoring it, conducting investigations with outside law firms as needed.” This is significant since altcoins accounted for the bulk of Coinbase’s trading activity in the fourth quarter of last year. “If any Coinbase employee is found to have helped or encouraged any malicious behaviour, such workers are promptly dismissed and sent to appropriate authorities,” Armstrong stated.
Following Coinbase’s statement that it will list 50 new tokens, Twitter users accused the company of insider trading once again. After reviewing on-chain data, one crypto influencer, Jordan Fish, tweeted on April 12, 2022, “Found an ETH address that acquired hundreds of thousands of dollars in tokens exclusively listed in the Coinbase Asset Listing article roughly 24 hours before it was released.” Kromatika (KROM) and RAC (RAC) Indexed tokens were acquired (NDX).
