The US-base unicorn, or better yet, the largest cryptocurrency exchange in the US, Coinbase is reportedly facing a negligence lawsuit for not handling the launch of BCH the right way.
According to released court documents, US District Judge Vince Chhabria has formally accused the exchange of unfair competition practices and misrepresentation.
Bitcoin Cash was launched after a Bitcoin fork in 2017. Shortly after that, the altcoin was split to two other cryptocurrencies namely Bitcoin Cash SV and Bitcoin Cash BCH.
The problem stems from the fact that Coinbase allowed trading or US dollar orders, but shortly after that suspended them several minutes after the start of orders. The reason for the haphazard: “significant volatility”. Simultaneously, the prices of the cryptocurrency skyrocketed within a very short amount of time before BCH was actually added on the Coinbase platform. As a result, the general opinion was that there is an insider trading scheme going on.
According to Judge Vince Chhabria:
The fact that Coinbase halted trading within three minutes of the launch is indicative of dysfunction. Most prominently, Coinbase could have announced its launch of trading in Bitcoin Cash more than an hour in advance, which would have permitted more buyers and sellers to place limit orders.
The quote comes from a news post from Hard Fork. According to the online newspaper, there was no response from Coinbase regarding the issue at this point.