Coinbase fined $ 6.5 million

 

Just before Coinbase is listed directly, agree to pay a $ 6.5 million fine after the US Commodity Futures Trading Commission (CTFC) determines the exchange is performing illegal "wash trades" practices.

CTFC has stated in Coinbase's practices to provide misleading information to trading applications such as CoinMarketCap and CME Bitcoin Real Time Index. There had been market manipulation called "wash trading", improper use of trading bots, and even irregular actions by an uncertain employee.

The currency is sending a message to the cryptocurrency industry that the CFTC is increasing efforts to investigate and punish free illegal practices that have taken place with regulated exchanges, according to deputy executive Vincent McGonagle:

“REPORTING FALSE, MISCELLANEOUS OR WRONG TRANSACTION INFORMATION DAMAGES THE INTEGRITY OF DIGITAL ASSET PRICING. THIS ENFORCEMENT ACTION SURSES THE COMMISSION TO ACT TO PROTECT THE INTEGRITY AND TRANSPARENCY OF SUCH INFORMATION. "

Coinbase agreed to pay the fine for not leaving a dirty past before its direct listing takes place. It also disabled margin trading on Coinbase Pro in order to comply with a set of guidelines provided by the CFTC. How did Coinbase get into debt of $ 6.5 million? CFTC explained that the problem has changed due to the abuse of automation, which GDAX has implemented in the past.

GDAX was later rebranded as Coinbase Pro in 2018 and became an advanced trading platform. Using Hedger and Replicator software to automate that whatsabah transaction. The CFTC has not explained in detail how the two programs work, but their counterpart trading is also known. When this event occurred, higher volumes were reported than actual activity on the platform. Therefore, investors turned to see and use Coinbase more actively.

US regulators did not like this situation. According to regulators, Coinbase submitted false, misleading, or inaccurate reports on digital assets transactions, including Bitcoin, on the GDAX electronic trading platform it operates. According to the FTX CEO, Hedger may be an algorithm that requires minimal intervention to stabilize prices, while the replicator may have the ability to maximize profits or maintain liquidity on pairs.