The Commodity Futures Trading Commission (CFTC) said in a news release Friday that cryptocurrency exchange platform Coinbase has paid $6.5 million to settle regulators’ claims that it reported misleading transaction data.
According to the CFTC, between January 2015 and September 2018 “Coinbase recklessly delivered false, misleading, or inaccurate reports concerning transactions in digital assets.” The agency alleges that two trading programs operated by Coinbase generated orders that traded with each other, which could have misled traders about the trading volume on the exchange now called Coinbase Pro.
The CFTC also fined Coinbase for what are known as “wash trades” in the Litecoin cryptocurrency and bitcoin that were conducted by a former Coinbase employee on Coinbase’s GDAX platform. Wash trades are banned because they create a false appearance of trading volume.
A Coinbase spokesperson said in a statement emailed to The Verge that it did not admit or deny the CFTC’s charges, and had “proactively engaged with the CFTC” over the course of its investigation. The staement notes that the settlement order “does not include any finding of harm to any Coinbase customer.” The company says it “firmly believe[s] that Coinbase has always aimed to create a reliable and secure trading environment for the benefit of our customers.”
Last month, Coinbase publicly filed paperwork to list its stock on the NASDAQ exchange. According to the company’s S-1 prospectus, Coinbase had 43 million verified users at the end of 2020, with a total of $90 billion of assets held in trust. Since its founding in 2012 as a platform for bitcoin trading, Coinbase has handled some $456 billion of transactions. Last year, it had revenue of $1.2 billion, turning a profit of $322 million.
