Coinbase’s recent unveiling of its plans to list new tokens has been a major source of controversy for the crypto exchange. The exchange now faces a growing number of accusations that it engaged in insider trading to profit from a price rally on its listing plans.
The exchange’s selection of 50 new tokens to list was widely criticized for including lesser known, and possibly dead tokens. But now, internet sleuths have uncovered wallets that possibly pre-bought on Coinbase’s selected tokens to benefit from the ensuing rally.
Addresses selectively bought tokens before Coinbase’s announcement
@Cobie, host of the crypto podcast uponlytv said they found an ETH address that pre-bought several hundreds of thousands tokens exclusively featured in Coinbase’s listing plans. The purchased tokens included Kromatika (KROM), DappRadar (RADAR), RAC, and DFX Token (DFX).
Data on Coinmarketcap shows that all the included tokens saw a large price spike after Coinbase’s announcement, ranging from 10% to 30%.
Twitter sleuth @zachxbt also said they found a related address which tailgated more tokens included in the list. Both addresses used centralized exchanges including Bittrex and Binance.
Crypto analyst @AlanStacked estimated that the Coinbase insider made a profit of over $600,000. But a link between the addresses and Coinbase could not be immediately established. The exchange has also not formally commented on the matter.
Crypto insider trade a common issue
Social media denizens were quick to express their ire over the incident, criticizing U.S. regulators for focussing on regulating the wrong aspects of crypto. The space has several instances of insider trading in recent months.
But no legal action against such trades is pursued, given that wallet addresses do not betray identity. The United States also has no clear regulation in place to prevent or punish insider trading in the crypto industry.
Coinbase has also faced accusations of insider trading prior to this week. A report by Wu Blockchain suggested that Coinbase’s new crypto listings tended to rise prior to their announcement.
NFT marketplace OpenSea has also come under fire for front-running certain NFT projects before they were listed on the marketplace.
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