Coinbase BCH Insider Trading Lawsuit Dropped by California Court
A local US court has rejected the case of a customer who sued Coinbase for insider trading prior to the inclusion of Bitcoin Cash on the platform.
A lawsuit accusing Coinbase of insider trading has been thrown out by the United States District Court for the Northern District of California, as per documents released on Tuesday.
The plaintiff, a trader named Jeffrey Berk, alleged that the exchange engaged in some shady practices prior to listing Bitcoin Cash (BCH) due to the disorganized manner in which it proceeded.
The court ruled Berk had no just cause to pursue the motion, saying that his arguments do not fit the context of this particular case.
“Berk’s complaint does not sufficiently articulate the legal bases for his claims. Taking Berk’s negligence claim as an example, Berk fails to describe the scope or content of Coinbase’s duty in anything more than broad generalities. A reader of the Complaint is thus left wondering what Coinbase should have done differently, or why the rollout of Bitcoin Cash would have gone more smoothly had Coinbase done whatever Berk thinks is appropriate,” the court wrote in its dismissal.
Some context
December 2017 was a chaotic month for those trading any of the major cryptocurrencies on the market. Bitcoin Cash and Bitcoin, in particular, reached heady heights.
Some time before that, Coinbase announced it would be adding Bitcoin Cash to its roster by the end of the year, letting people who cashed into BTC benefit from the BCH airdrop. The exchange decided to do this just as the month was ending. The price of Bitcoin Cash exploded moments before the integration.
Coinbase maintains the timing was not intentional, but several skeptics came forward with speculation and accusations, leading to the lawsuit in question. Back when the scandal was hitting its apex, the exchange itself ran an investigation to determine whether any insider trading had really happened.
Users were particularly suspicious of the order books for BCH being opened earlier than usual as opposed to making the coin available strictly for withdrawals. Whether Coinbase did something wrong remains the subject of debate in the community.
The internal investigation was carried out by two independent US law firms and concluded a few months ago, finding nothing that could tie the company to any wrongdoing.
As for the lawsuit, Berk has 18 days left to amend his motion with arguments that could compel the court to proceed.