Cryptocurrency exchange Coinbase has reached an agreement with the US Commodity Futures Trading Commission (CFTC) to pay $6.5 million fine for "reckless false, misleading, or inaccurate reporting as well as wash trading by a former employee on Coinbase’s GDAX platform." According to a press release, the exchange will settle allegations it used two automated trading programs, Hedger and Replicator, which created "orders that at times matched with one another" between January 2015 and September 2018.
Acting Director of Enforcement, Vincent McGonagle, says the enforcement action "sends the message" that the watchdog will act to safeguard the integrity of information.
"Reporting false, misleading, or inaccurate transaction information undermines the integrity of digital asset pricing," McGonagle added.
The watchdog found that from August through September 2016, a former Coinbase employee used a "manipulative or deceptive device" by intentionally placing buy and sell orders in the LTC/BTC trading pair on GDAX. According to the CFTC, this manipulation made the misleading appearance of liquidity and trading interest in litecoin (LTC).
As iHodl earlier reported, the CFTC is investigating cryptocurrency exchange Binance to find out whether the exchange broke rules by permitting Americans to trade on its platform, which is not registered with the agency. Since the CFTC considers cryptocurrencies like bitcoin (EXANTE: Bitcoin) and ether (ETH) to be commodities, it claims jurisdiction over their futures and other derivatives.
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