A new amended class action complaint has been filed against Coinbase, providing more detail on how insiders allegedly profited from the cryptocurrency exchange’s rollout of cash last December.
The document, filed Nov. 20 with the U.S. District Court for the Northern District of California, outlines why the plaintiffs believe Coinbase “made false and deceptive statements” about its rollout of the bitcoin fork; how the exchange allegedly caused bitcoin cash’s price to spike while simultaneously depressing bitcoin’s price; and how insiders who knew Coinbase would list bitcoin cash were able to allegedly buy and sell the token before other customers.
The complaint explained:
“As a consequence of this scheme, the Individual Defendants and Coinbase enabled Coinbase to earn significant fees from the trades of its customers, from which Coinbase earned a spread over an inflated price for BCH, and to avoid a ‘run’ on the Company by sellers anxious to take advantage of the inflated price, by closing down trading within minutes of the Launch to all except certain insiders who were positioned to and did sell BCH at inflated prices during the Launch.”
Tuesday’s filing comes just under a month after a federal judge initially dismissed plaintiff Jeffrey Berk’s original suit. At the time, Judge Vince Chhabria stated that it was unclear what Berk’s legal basis was, what he believed Coinbase should have done or how the rollout could have gone more smoothly.
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