Coinbase to explain the strange price drop reason to the U.S. regulator
The U.S. Commodity Futures Trading Commission (CFTC) demands information regarding the strange price drop happened on the 21th of June this year. During that day, the Ethereum-based digital tokens dramatically dropped in price from $317.81 to 10 cents and returned back to normal shortly after that. The inquiry is justified – if someone knew about this drop before it occurred, this someone could illegally gain a lot of money. It’s called inside trading.
Bloomberg explains the reason of this drop, stating that many traders decided to turn on the automatic sell orders issue in case the tokens’ price gets low, and after a $12.5 million trade that devalued those tokens, the automatic sell order issue from traders accelerated the drop even more. However, since that crash, Coinbase decided to disable margin trade.It should be noted that it’s not the news about some 3rd-world country vague exchange. Coinbase is amongst the most trusted exchanges in the world, and any inquiries like that serve as an example of which future steps American regulators might take towards other exchanges working with the U.S.-based clients. While Coinbase will almost certainly be able to explain what happened, those exchange owners who plan to manipulate the market via huge price drops and inside trading should think twice.
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