The CFTC found that Coinbase acted wrongly over a three-year period, including the use of multiple trading programs that traded in unison.

The U.S. Commodity Futures Trading Commission (CFTC) posted a press release on Mar. 19 regarding its fine levied against Coinbase. The CFTC ordered the exchange to pay a fine of $6.5 million. The reason was “reckless false, misleading, or inaccurate reporting as well as wash trading by a former employee on Coinbase’s GDAX platform.”

The CFTC goes on to explain that between January 2015 and September 2018, the company engaged in trades that affected the market’s perception of pricing and volume on GDAX. In particular, a series of trades in August and September 2016 pumped the volume of activity related to the Litecoin/Bitcoin pair.

Coinbase previously gained the commission’s attention in November, 2020 regarding margin trading. Consequently, the exchange shut down its margin trading platform on Nov. 25, and ended the function entirely in December, once open positions had expired. Coinbase grounded its decision on “recent guidance” published in March 2020 by the commission.

On Mar. 12, 2021, BeInCrypto reported that the CFTC was investigating Binance. Specifically, the regulator wanted to know if U.S. residents were conducting illegal derivatives trades. The CFTC is acting on a tip, and it has not filed any charges against Binance as of yet.
Back  on Oct. 1, 2020, the commission took BitMEX to federal court. It claimed that BitMEX was operating an unregistered trading platform, among other issues, including the failure to install the anti-money laundering (AML) procedures that were required.

On Jan. 21, 2021, Heath Tarbert stepped down as chair of the CFTC. President Biden tapped Chris Brummer to replace him. However, Brummer has not been confirmed by the U.S. Senate. In the mean time, Rostin Behnam is acting chairman.

Until he is confirmed, Brummer is the Profession and Faculty Director at Georgetown University Institute of International Economic Law. Brummer’s research focuses on cryptocurrencies.

The CFTC ruled in 2020 that cryptocurrencies are commodities instead of currencies. This might put it in conflict with other federal agencies. States, too, make decisions on what is a currency. For example, the State of New York determined that XRP is a digital currency. However, the Securities and Exchange Commission (SEC) sued it as being a security anyway. Brummer, once he is confirmed, will need to actually define crypto.

The post CFTC Slaps Coinbase with $6.5 Million Fine appeared first on BeInCrypto.

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