Coinbase Settles ‘Misleading Transaction Data’ Charges with the CFTC for $6.5 Million

The settlement, for the charges also including “wash trading,” comes ahead of Coinbase’s stock market listing with a valuation of $68 billion, which makes it more valuable than Nasdaq and NYSE’s ICE.

Coinbase has paid $6.5 million to settle its charges of reporting misleading transaction data, potentially inflating the trading volume on its professional GDAX platform, with the U.S. Commodity Futures Trading Commission (CFTC).

CFTC reported this week that it also fined the leading US cryptocurrency exchange for “wash trades” in Bitcoin BTC -0.79% Bitcoin / USD BTCUSD $ 26,844.25
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by a former Coinbase employee on GDAX.

“The settlement order today does not include any finding of harm to any Coinbase customer,” a Coinbase spokesman said.

“While Coinbase neither admits nor denies the CFTC’s findings, we firmly believe that Coinbase has always aimed to create a reliable and secure trading environment for the benefit of our customers.”

According to the agency, between January 2015 and September 2018, two trading programs, both operated by the exchange, matched orders with one another.

Though GDAX disclosed that Coinbase was trading on GDAX, it failed to disclose that the exchange was operating more than one trading program and through multiple accounts, the CFTC said.

“Transactional information of this type is used by market participants for price discovery … and potentially resulted in a perceived volume and level of liquidity of digital assets, including bitcoin, that was false, misleading, or inaccurate,” the CFTC added.

The settlement comes ahead of the company's planned direct listing with a valuation of $68 billion based on private market transactions, as stated by the company on Wednesday.

This valuation is up from over $8 billion during its last private fundraise in 2018, making it more valuable than the New York Stock Exchange parent Intercontinental Exchange Inc (ICE), the London Stock Exchange, and Nasdaq, and just $4 billion short of near CME Group.

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