Coinbase CEO responds to insider trading allegations with changes for token listings
After some crypto sleuths made allegations of insider trading by individuals potentially connected to Coinbase, CEO Brian Armstrong said the crypto exchange would change some of its token listing practices.
In a Thursday blog post, Armstrong did not confirm whether any Coinbase employees had received disciplinary action or been referred for criminal charges in response to allegedly receiving insider information used to profit off certain token listings. According to the CEO, Coinbase planned to change its listing process over the next few quarters “to try and prevent on-chain data giving signal to watchful traders,” allow users to rate and review assets, and invest more in forensic tools.
“There is always the possibility that someone inside Coinbase could, wittingly or unwittingly, leak information to outsiders engaging in illegal activity,” said the Coinbase CEO. “We have zero tolerance for this and monitor for it, conducting investigations where appropriate with outside law firms [...] If these investigations find that any Coinbase employee somehow aided or abetted any nefarious activity, those employees are immediately terminated and referred to relevant authorities (potentially for criminal prosecution).”
According to Armstrong, employees are limited to trading crypto on Coinbase’s platforms by its company policies in order to monitor transactions and “stay ahead of possible abuse.” However, Cointelegraph reported in April that some online sleuths alleged certain investors had insider knowledge of which tokens Coinbase said it was considering listing in the second quarter of 2022 based on blockchain records of purchases prior to the exchange releasing that information.
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