Coinbase’s recent announcement of ambitions to launch new currencies has sparked significant controversy for the cryptocurrency exchange. The exchange is now facing an increasing number of allegations of insider trading in order to profit from a price rally associated with its listing aspirations.
The exchange’s decision to publish 50 new tokens drew widespread criticism for incorporating lesser-known and possibly defunct tokens. However, internet sleuths have discovered wallets that may have pre-purchased Coinbase’s selected tokens in order to profit from the subsequent rally.
Addresses that purchased tokens selectively before to Coinbase’s announcement
@Cobie, presenter of the cryptocurrency podcast uponlytv, stated that they discovered an ETH address that had pre-purchased multiple hundreds of thousands of tokens mentioned solely in Coinbase’s listing plans. Kromatika (KROM), DappRadar (RADAR), RAC, and DFX Token were purchased (DFX).
According to Coinmarketcap data, all of the tokens listed had a significant price increase following Coinbase’s announcement, ranging from 10% to 30%.
Additionally, Twitter sleuth @zachxbt stated that they discovered a related address that tailgated additional tokens listed in the list. Both addresses made use of centralised cryptocurrency exchanges such as Bittrex and Binance.
@AlanStacked, a cryptocurrency specialist, calculated that the Coinbase insider profited by more than $600,000. However, a connection between the addresses and Coinbase could not be established immediately. Additionally, the exchange has made no public remark on the incident.
Cryptocurrency insider trading is a frequent occurrence.
Social media users reacted angrily to the incident, slamming US regulators for focusing on the incorrect areas of cryptocurrency regulation. Recent months have seen multiple cases of insider trading in the space.
However, no legal action is taken against such trades, as wallet addresses do not reveal one’s identity. Additionally, the United States lacks a clear regulatory framework for preventing or punishing insider trading in the cryptocurrency industry.
Prior to this week, Coinbase was also accused of insider trading. According to an analysis by Wu Blockchain, Coinbase’s new crypto listings have a history of increasing in value ahead to their introduction.
NFT market Additionally, OpenSea has come under fire for pre-purchasing certain NFT projects prior to their listing on the marketplace.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
