Increased trading led to a spike in Bitcoin Cash's valuation, and just four hours after its introduction, Coinbase suspended trading of the digital currency. Until yesterday, Coinbase only participated in three markets - Bitcoin, Ethereum, and Litecoin. That made the addition of Bitcoin Cash a big deal for cryptocurrency as a whole, Coinbase, and Bitcoin Cash itself. If we find evidence of any employee or contractor violating our policies - directly or indirectly - I will not hesitate to terminate the employee immediately and take appropriate legal action. If it turns out that insider trading was involved at Coinbase, users will likely have to scream their outrage into the void until some type of regulation for the market is set in stone. But, only two minutes later, the exchange paused BCH/USD trading "due to significant volatility". Owners of Bitcoins at the time of the fork were rewarded with an equal sum of Bitcoin Cash.
At the same time, Bitcoin prices fell almost 15 percent to as low as $15,000 on Tuesday before the announcement.
On other exchanges, such as Kraken, bitcoin cash traded at about $3,600 on Wednesday.
Bitcoin cash split off from bitcoin on August 1 after a minority of developers chose to implement an upgrade to improve transaction efficiency. According to cryptocurrency tracker Coinmarketcap, at roughly 01:55 GMT, the Bitcoin price hit a record level of $3,813.70. CoinBase's CEO has announced they are launching an investigation into the activity that occured shortly before Bitcoin Cash went live on their platform. "The problem is that @brian_armstrong chose to launch Bitcoin Cash secretly and abruptly giving their employees a huge incentive to do so". Bitcoin Cash is now the third largest cryptocurrency in terms of market capitalization, sitting at more than $29 billion compared to bitcoin's more than $294 billion.More news: Deputy PM criticizes U.S. for veto on United Nations resolution condemning Jerusalem decision
As Bitcoin Cash has become more tradeable thanks to an increase in the number of miners, individual investors are purchasing more Bitcoin Cash, which is more affordable than Bitcoin.
While it's unclear whether any Coinbase or GDAX employees actually acted on this information, the company explained via Twitter, "Coinbase maintains a strict trading policy and internal guidelines for employees".
Moreover, "employees and contractors (of Coinbase) were explicitly prohibited from trading Bitcoin Cash and disclosing launch their plans over a month ago", stated Brian.
For now, all eyes are on Bitcoin Cash while other tokens are seeing dives.