Coinbase Under Investigation for Ethereum ‘Flash Crash’: What You Need to Know
Coinbase, one of the largest cryptocurrency exchanges in the world, is reportedly under investigation for a major Ethereum “flash crash” that occurred in June 2017. The Commodity Futures Trading Commission (CFTC) is said to be leading the probe, which is focused on whether Coinbase employees were involved in market manipulation or other illicit activities.
During the “flash crash,” the price of Ethereum briefly plummeted from around $320 to just 10 cents on the GDAX exchange, which is owned by Coinbase. The crash occurred in just a matter of seconds, and many traders were left with significant losses. The incident sparked widespread concern about the stability and security of cryptocurrency markets, and raised questions about the role of exchanges in ensuring fair and transparent trading.
The investigation into Coinbase’s role in the flash crash is just the latest in a series of regulatory inquiries into the cryptocurrency industry. In recent months, regulators in the US and around the world have been stepping up their efforts to crack down on fraud, market manipulation, and other abuses in the sector. As the industry continues to grow and evolve, it is likely that we will see more scrutiny and oversight from regulators in the coming years.
Overview of the Ethereum ‘Flash Crash’
The Ethereum ‘Flash Crash’ occurred on June 21, 2017, and led to a significant drop in the price of Ethereum on the GDAX exchange, which is owned by Coinbase. In just a few minutes, the price of Ethereum dropped from around $320 to as low as $0.10, before quickly recovering to around $300. This sudden drop in price triggered a lot of panic selling, which caused the price to drop even further.
Timeline of Events
The Ethereum ‘Flash Crash’ happened at around 12:30 PM Pacific Time on June 21, 2017. At that time, a large sell order was placed on the GDAX exchange, which caused the price of Ethereum to drop rapidly. This sell order was for around 30,000 Ethereum, which was worth around $9 million at the time.
As the price of Ethereum dropped, many traders panicked and started selling their holdings, which caused the price to drop even further. Within just a few minutes, the price of Ethereum had dropped from around $320 to as low as $0.10. This sudden drop in price triggered a lot of panic selling, which caused the price to drop even further.
Impact on Ethereum Market
The Ethereum ‘Flash Crash’ had a significant impact on the Ethereum market. Many traders lost a lot of money as a result of the sudden drop in price, and there was a lot of confusion and panic in the market. The crash also highlighted some of the risks associated with trading on cryptocurrency exchanges, particularly when it comes to large sell orders.
Following the crash, GDAX announced that it would reimburse traders who had lost money as a result of the crash. This move was welcomed by many in the cryptocurrency community, as it helped to restore confidence in the market. However, the crash also led to increased scrutiny of cryptocurrency exchanges, and in particular, the way in which they handle large sell orders.
