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Coinbase’s possible insider trading: A look at XRP transactions in the weeks leading up to Coinbase listing

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Coinbase's possible insider trading: A look at XRP transactions in the weeks leading up to Coinbase listing
Source: Unsplash

Opinion:

The debate on XRP being classified as a utility or security could easily be the most controversial and debated topic since the stablecoin Tether’s [USDT] controversy. The debate on XRP and Ripple has risen from the dead after Coinbase Pro decided to list XRP on February 25, 2019.

While the XRP community and XRP army breathed a sigh of relief, users in the cryptocurrency ecosystem like Pierre Rochard, and Alistair Milne, suggested that Ripple had allegedly “paid” Coinbase to list XRP. Some users even suggested that the huge and unusual transactions that took place on the XRP Ledger before the listing was compensation for Coinbase to list XRP.

Others suggested that Coinbase had lost its footing in the cryptocurrency space due to the brutal bear market and against the likes of exchanges like Binance, which forced it to list XRP.

The announcement by Coinbase came on February 25, 2019, 11:30 PM IST [10:00 AM PT], however, the price of XRP was bumped by approximately 6.30% prior to the announcement, which reeks of insider trading even for the volatile cryptocurrency market. After the announcement, the price of XRP went from $0.31 to $0.34 in a matter of hours, which is the “Coinbase Effect” on the listed tokens.

Apart from the surge in price before the announcement, there was a massive amount of XRP accumulation in certain wallets. These incidents imply that there was a breach of information. The source of the breach could either be from Coinbase or Ripple, but it cannot be confirmed at the moment.

The activity of the transactions of XRP on the XRPL increased by a massive amount, weeks before the announcement. The data was collected from XRPL Monitor [@XRPL_Monitor], a Twitter account that posts XRP transactions which are above 5 million XRP.

According to the table recording the amount of XRP transacted in the weeks leading to the announcement, the transactions were normal a week prior to the announcement, but increased absurdly as the announcement came closer.

Number of transactions

Number of transactions

On February 25, out of the total 16 transactions that took place, 9 transactions occurred a few hours before the announcement. Although the transactions were into multiple wallets, they cumulatively amounted to 88,743,691 XRP. XRP was trading anywhere between $0.29 to $0.30 on February 25, resulting in a total of $25,735,670.39 being accumulated before the announcement.

The data above would suggest that there were people or a group of people who knew about the announcement earlier, explaining why there was a surge in XRP’s transaction volume. Furthermore, this is not the first time Coinbase is in the limelight for such accusations. Coinbase’s listing of Bitcoin Cash [BCH] faced serious accusations of insider trading by people in the community as there was a serious price pump in the hours leading up to the announcement.

The transactions only give us a partial picture and above all, it is circumstantial and proves nothing. However, if there were people who actually bought such large sums of XRP prior to the pump in prices, they would have made millions of dollars in a couple of hours in all probability.



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Akash is your usual Mechie with an unusual interest in cryptos and day trading, ergo, a full-time journalist at AMBCrypto. Holds XRP due to peer pressure but otherwise found day trading with what little capital that he owns.

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