By Alicia Maher
Coinbase was regarded as the kingmaker (especially for altcoins) in the crypto kingdom for a very long time. The reason is that any token that Coinbase lists on its platform gets a massive boost in value; some even get boosted within a few hours. However, there is now a twist to this widely-held perspective.
Even though its recent token listing (the listing of StepN’s dual tokens) has had a similar effect, many traders have alleged that the popular exchange is involved in insider trading. Insider trading here means that there are those with insider information on when a token will be listed and purchase vast amounts of those tokens before they are listed. Then, when they’re listed and their price surge, those who have purchased these massive amounts dump the tokens causing a sudden price decline for the affected tokens.
Allegation Of Insider Trading On Coinbase With ‘Proof’
The recent listing of StepN (a move-to-earn lifestyle app) ‘s GMT token seems to follow a pattern of insider trading as described above. After its listing, GMT’s price surged by more than 21% and shot to a new peak price of more than $4.52 before a sudden price decline to its pre-listing price range.
While the rise and decline of a token price shouldn’t be surprising, crypto Twitter thought otherwise. A popular member of the Crypto Twitter community, Jordan Fish, made a substantial claim.
Fish, whose Twitter handle is @cobie, claimed that he stumbled upon an Ethereum wallet that amassed vast amounts of GMT tokens (worth hundreds of thousands of dollars) a day before Coinbase listed the GMT token.
Found an ETH address that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published, rofl pic.twitter.com/5QlVTjl0Jp
— Cobie (@cobie) April 12, 2022
Coinbase To Change Its Listing Protocol
Another crypto Twitter member made similar claims over the listing of other tokens (UPI and AVT). Following the revelation, there was a flurry of comments on Coinbase’s Twitter page accusing the famous exchange of insider trading. Thus, prompting the exchange’s CEO to issue a response. The exchange’s co-founder and CEO, Brian Armstrong, remarked that the exchange is looking into making some changes to its listing protocols.
Having acknowledged the possibilities of insider trading activities, Armstrong published a detailed blog post on the exchange’s steps to prevent insider trading permanently on its platform. According to the exchange’s CEO, the company would put necessary measures in place to monitor the activities of each employee to be sure they are not involved in any sharp practices.
He added that if any employee is found to be involved in activities that represent insider trading, whether personally or in collaboration with others by being an informant, such employee’s employment will be terminated instantly.
But Armstrong further remarked that many times, there are leaks within his organization. Instead, many traders usually take a keen interest in the exchange’s API to determine which tokens are about to be listed and buy such tokens immediately.
He added that “we would remove this information imbalance because not all customers can access it even though it is public data.” Before listing any other tokens, Coinbase plans to make the public aware of the tokens whose integrations it would test before starting the process. The exchange’s CEO further said that it would simplify the platform’s user interface to enable users to access token ratings and reviews easily.
HeraldSheets.com produces top quality content for crypto companies. We provide brand exposure for hundreds of companies. All of our clients appreciate our services. If you have any questions you may contact us. Cryptocurrencies and Digital tokens are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by our authors and the views expressed in them do not reflect the views of this website. Herald Sheets is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Read full terms and conditions / disclaimer.