Coinbase Sees New Amended Class Action Lawsuit In Latest BCH Insider Profit Trading Details
Coinbase recently became the subject of a class action lawsuit. This lawsuit, which was filed with the U.S. District Court for the Northern District of California, speaks on the ways that Coinbase allegedly “made false and deceptive statements” about how they planned to implement their hard fork.
The class action lawsuit goes into greater detail about these problems, adding that the plaintiffs believed that the exchange caused the Bitcoin Cash price spike, while causing the drop in Bitcoin price. Furthermore, the class action complaint went into detail about the ways that the plaintiff allege that Coinbase allowed for insider trading to manipulate the token before other customers could.
Explaining, the complaint continued, saying,
“As a consequence of this scheme, the Individual Defendants and Coinbase enabled Coinbase to earn significant fees from the trades of its customers, from which Coinbase earned a spread over an inflated price for BCH, and to avoid a ‘run’ on the Company by sellers anxious to take advantage of the inflated price, by closing down trading within minutes of the Launch to all except certain insiders who were positioned to and did sell BCH at inflated prices during the Launch.”
This filing is about a month after Jeffrey’s Berk’s original suit was thrown out of court. The original suit also included problematic details about the Bitcoin Cash hard fork. At that time, the judge did not seem to see a reason or legal basis to what Berk was suing for. With the amended version filed now, it clarifies that the token listed standards on what is now Coinbase Pro were not followed. They also said that they would notify investors in advance when Bitcoin Cash withdrawals would be permitted, though they opened them without warning.
The plaintiffs claim that the listing of Bitcoin Cash only came with the option to purchase, which is what sent the price soaring high. In their request, the plaintiffs want to be repaid for the damages sustained, though they are allowing the amount to be determined by the judge. They also want to be paid for the legal fees of pursuing the lawsuit.
Now, it is Coinbase’s move. They have until December 20th to respond, and the hearing has already been setup for January 31st next year.