The US Commodity Futures Trading Commission (CFTC) announced that it would impose a fine of $6.5 million on the digital asset trading platform Coinbase. This fine is a result of the GDAX trading volume report on Coinbase which is misleading.
The CFTC said in a statement: “From January 2015 to September 2018, Coinbase recklessly issued false, misleading or inaccurate reports on the transactions of digital assets including Bitcoin”. The CFTC also fined former Coinbase employees for “washing and selling” transactions on GDAX.
From January 2015 to September 2018, two trading programs operated by Coinbase matched orders with each other, resulting in transactions between the two accounts owned by the company. Furthermore, CFTC states that GDAX reveals that Coinbase does transactions on GDAX. However, it did not disclose that it operates more than one trading program and uses multiple accounts.
Coinbase subsequently disclosed the transaction information through the website. It also providse the information directly or indirectly to reporting services and exchanges.
“This type of transaction information is relevant for market participants for price discovery… and may lead to false, misleading or inaccurate situations in the transaction volume and liquidity level of digital assets including Bitcoin,” CFTC Say.
Coinbase postpones its direct listing plan to April
According to reports, the U.S. cryptocurrency exchange, Coinbase Global, will postpone the direct listing from this month to April. The U.S. Securities and Exchange Commission has been reviewing the company’s direct listing plan. With respect to this report, Coinbase did not make any comment.
Coinbase supporters registered as many as 114.9 million shares this week and plan to trade after the listing. For companies that adopt direct listing, investors can sell their shares immediately after listing. This is also an option instead of waiting until the end of the restriction period. If they use the IPO method, there will usually be a lock-up period of up to 6 months.
Regulatory documents filed on Wednesday show that investment companies including Andreessen Horowitz and Union Square Ventures, as well as Coinbase CEO Brian Armstrong and co-founder Fred Ehrsam, have all registered to wait.
The price range of Coinbase’s private market transactions this year is $200 to $375.01. Also, the weighted average from January to March 15th is $343.58. Based on the total outstanding share capital as of Monday, the company’s corresponding valuation is $67.6 billion. This does not include the employee incentive plan and hold-up stocks. If we include these, the valuation will be much higher.
This will be Nasdaq’s first large-scale direct listing transaction. Previous transactions of this kind were mainly conducted on the New York Stock Exchange, including Spotify, Slack, Asana, Palantir, and Roblox, which was listed this month.
Coinbase’s latest financial report shows that the company is already profitable, so it is very different from other newly listed startups. The company turned losses into profits last year with a profit of $322 million.