Coinbase Delays Direct Listing of Shares Following $ 6.5 Million CFTC Fine

After settling charges of incorrectly reporting trading volume and ‘auto-trading’ with the CFTC yesterday, reports have revealed cryptocurrency exchange giant Coinbase on the verge of pushing back its listing on the stock market next month. The company was previously scheduled to go public in March.

Yesterday, March 19, the Commodity Futures Trading Commission announced a settlement with Coinbase over charges that the company inaccurately reported Bitcoin trading data and that an employee was ‘auto-trading’ to create the illusion volume and demand for Litecoin.

“Reporting false, misleading or inaccurate transaction information undermines the integrity of digital asset pricing,” said Vincent McGonagle, acting director of enforcement. “This coercive measure sends the message that the Commission will act to protect the integrity and transparency of this information.”

The CFTC order states that between January 2015 and September 2018, the company operated two automated trading programs, Hedger and Replicator. Although the exchange did disclose the use of a trading program, it did not disclose that it uses two trades that often correspond to trades.

As a result, the Coinbase API provided fraudulent trading data to entities such as the CME Bitcoin Real Time Index and CoinMarketCap, as well as the NYSE Bitcoin Index via a “direct transmission” from Coinbase.

The CFTC notes that this falsified data “potentially resulted in a perceived volume and level of liquidity of digital assets, including Bitcoin, that were false, misleading, or inaccurate.”

Further, the ad notes that an employee intentionally placed corresponding LTC / BTC trades for a period of six weeks in 2016 to create the illusion of liquidity and demand for LTC. The CFTC has declared Coinbase “vicariously liable” for these fraudulent transactions.

The total fine for these charges is $ 6.5 million.

Delayed direct announcement

Following the settlement with the CFTC, a late report last night from Bloomberg indicates that the exchange has postponed their direct listing until next month.

Citing “people familiar with the matter,” Bloomberg said plans for a March stock offering on the US stock exchanges “slipped” and no further details were provided.

Earlier this month, Bloomberg cited anonymous sources to report that Justin Sun won Christie’s nearly $ 70 million auction for an NFT Beeple, which later turned out to be bogus, as well as Binance was under investigation by the CFTC for allowing US residents to place the illegal trade. Binance CEO Changpeng Zhao vigorously denied the qualification of the report.