Brain Armstrong is the CEO of Coinbase, the largest cryptocurrency exchange operating in the United States of America. He recently talked about an ongoing controversy concerning the platform that involves the employees of the firm and allegations of insider trading. Insider trading is a legal term that is used to describe a type of financial scam that is performed by manipulating the crucial information concerning a company.
In his latest statement, Armstrong refrained from denying the allegations, and he further explained that the management is working on introducing better protocols to discourage such practices in the future. He also claimed that the company management is also finding ways to curb the illicit trade practices with asset listing and front-running.
Coinbase Receives Backlash After Insider Trading Accusations
Speaking to the media, Armstrong claimed that the best course of action is to audit any loopholes and fix the loose ends. It is worth noting that Coinbase token listings are often subject to unexpected pumps as soon as the token in question debuts. Some experienced traders used data from on-chain metrics and obtained subtractions by reconciliation with the API reaction of Coinbase exchange during an asset-listing.
Coinbase further stated in its latest statement that the company has decided to keep its tokenized listing despite the foul play allegations. These investors were able to use differential analytics to front-run the upcoming Coinbase token listing by arbitrage. The data hackers purchased the same coins from other exchanges and sold them on Coinbase during the new listing and thus making money in the process. However, it is unfair to the existing clients of Coinbase, who stand to lose money due to buying it at a higher price.
At present, the news about Coinbase employees taking part in Insider Trading is circulating on social media platforms, especially Twitter. During his latest press conference, Armstrong claimed that the data under question is available for everyone. However, due to technical constraints, not everyone can understand or filter it. He further claimed that Coinbase developers are currently working on removing such asymmetries.
He further exclaimed that it is impossible to completely extinguish the possibility that Coinbase employees end up leaking such sensitive information with or without malicious intent. He also said that the company is still working on minimizing such risks and maintains a zero-tolerance policy toward Insider Trading practices. Coinbase has already decided to label risk-positive assets and introduce a new rating system and community reviews section.