Crypto Monday sees downside as Coinbase faces lawsuit from traders

According to a weekend piece by Finance Magnates, the major cryptocurrency exchange Coinbase has to face down a class action lawsuit brought by traders against the exchange, who are accusing Coinbase of fraudulent practices, and the cryptospace is opening the new week in retreat.

Key quotes

In their filing, the plaintiffs argue that the cryptocurrency exchange “made false and deceptive statements” regarding the Bitcoin fork to Bitcoin Cash in August of 2017.

Concurrently, the plaintiffs allege that Coinbase insiders, who knew that the exchange would list Bitcoin Cash, were able to start buying the cryptocurrency before the exchange’s customers were.

More specifically, the exchange allegedly allowed those insiders to take positions in Bitcoin Cash, then opened up the market to the public which pushed the price up.

Moreover, when the exchange did launch Bitcoin Cash, only buy orders were available – that made it impossible for everyone, except those permitted to do so by the exchange, to sell the cryptocurrency.

Much like the class action lawsuit filed this week, former customer Jeffrey Berk, representing a number of different investors, said that the exchange had tipped off insiders to the Bitcoin Cash launch prior to it being announced publicly.