Coinbase is paying the price for its previous cryptocurrency trading practices. According to Coindesk and the Wall Street Journal, the Commodity Futures Trading Commission fined Coinbase $ 6.5 million for allegedly providing misleading information about their trading volume. The company’s Coinbase Pro exchange ran two programs between 2015 and 2018, sometimes trading Bitcoin and Litecoin together, and incorporated those trades into data shared with outside services. So it looked like there was more trading volume than there actually was.
Coinbase also did not disclose that it had more than one program or traded across multiple accounts, the CFTC said. The exchange was responsible for its actions, the commission added when a former Coinbase employee abused the programs between August and September 2016 to buy and sell crypto in “laundries” that artificially inflated activity.
The commission did not accuse Coinbase of doing anything wrong and suggested it was more negligent than intended.
Concerned that the decision implied that her organization had more powers to regulate crypto exchanges than she did, CFTC Commissioner Dawn Stump stressed that Coinbase’s activities were firmly in the past. The activity took place “several years ago” and the employee in question left the company years before the fine. Coinbase has not repeated this behavior since then, Stump added.
The decision comes at a crucial time for Coinbase and the entire industry. Interest in cryptocurrency has grown dramatically in the past few months, and Coinbase, as one of the most famous exchanges, could play a crucial role in that surge. The fine could clear some uncertainties and help Coinbase focus on its future, although the move also highlights some uncertainties related to regulations.