Although bitcoin cash was already rising steadily before Coinbase enabled trading of it last night, it was trading at a significant premium on the platform versus the rest of the market. A little over an hour later, orders were cleared and the market was taken offline.
And while GDAX appears to be out of the woods (for now) on the bitcoin cash side, a new update to the parent company's status page indicates that customers of the flagship service could experience delays on their bank wires. The price that Coinbase displayed was also nearly triple what was being quoted on other exchanges. If anyone knew about this and bought Bitcoin Cash before the announcement was made, they could have easily made 300 percent in profit by selling on GDAX.
Bitcoin Cash prices surged to almost $9,000 on Tuesday prior to the announcement going live.
Although there have been other Bitcoin splits before, this "fork" was unusual in that everyone who owned the original virtual currency was offered a matching sum of Bitcoin Cash. "Given the price increase in the hours leading up to the announcement, we will be conducting an investigation into this matter". Armstrong added that Coinbase is now looking into the matter.
Moreover, "employees and contractors (of Coinbase) were explicitly prohibited from trading Bitcoin Cash and disclosing launch their plans over a month ago", stated Brian.
Our launch of Bitcoin Cash today is no exception to this.
However, after going live for only four minutes (via its GDAX exchange), Coinbase halted trading of bitcoin cash. This also had it canceling all resting orders and clearing order books for Bitcoin Cash.
Quartz has asked Coinbase for an explanation for the trading suspension.
Traders originally grew suspicious when the bitcoin cash value took a sharp upturn in the hours leading up to the company's announcement, with many suspecting that individuals with insider knowledge of the event procured bitcoin cash at a low rate prior to the launch. The policy prohibits employees and contractors from trading on "material non-public information", such as when a new asset will be added to our platform.