Major US cryptocurrency exchange and wallet provider Coinbase had just been granted a motion to dismiss a lawsuit over alleged insider trading. The alleged Coinbase BCH insider trading occurred last year during the company’s launch of Bitcoin Cash (BCH).
Coinbase BCH Insider Trading
The United States District Court North District of California published a court document this past Tuesday detailing the dismissal. Vince Chhabria, US District Judge, found that the plaintiff Jeffrey Berk from Arizona had “not sufficiently articulate[d] the legal bases for his claims” in his complaint. The original lawsuit had been filed against Coinbase in March of this year.
Berk represented all Coinbase customers that had allegedly “suffered monetary loss as a result” of the exchange’s misconduct. The cryptocurrency exchange launched BCH from Dec 19th–Dec 21st, 2017. Within minutes of the public learning that Coinbase was supporting Bitcoin Cash, BCH saw a massive and unexpected spike in price—almost instantaneously.
Berk had alleged that Coinbase employees and others with knowledge of the matter benefited from trading on the basis of non-public information, stating:
“On December 19, 2017, a month after tipping off its own employees as to when it would commence fully supporting BCH, Coinbase suddenly announced that it was opening up its books to the buying and selling of BCH within minutes after its announcements. Unsurprisingly, those who had been tipped off, immediately swamped Coinbase and the GDAX with buy and sell orders, thinning the liquidity but obtaining BCH at fair prices.”
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District Judge Chhabria found that Berk failed to describe the scope or content of Coinbase’s duty in “anything more than broad generalities.” Berk can still file an amended complaint within 21 days of the dismissal.
It remains unknown at this time if he will continue to pursue this legal matter.
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