The Commodity Futures Trading Commission (CFTC) has requested information from leading digital asset exchange company Coinbase regarding a flash crash in Ether price on June 21, 2017, on its GDAX platform, Bloomberg reported.
On June 21, ETH/USD plunged from $317.81 to 10 cents within seconds. Reports suggested that the drop was driven by a multimillion-dollar market sell placed on the GDAX ETH-USD order book.
In an update posted on June 21, GDAX said that its investigations revealed no foul play, adding that its matching engine operated as intended throughout this event. However, in a second update posted on June 24, GDAX noted that some customers “did not receive the quality of service we strive to provide and we want to do better.”
Sources familiar with the matter told Bloomberg that the CFTC has sent Coinbase a letter with a list of questions, including queries on margin trading. In a bid to attract institutional investors, Coinbase began offering margin accounts in March. However, the service was disabled following the June crash.
In a statement, Coinbase told Bloomberg:
“As a regulated financial institution, Coinbase complies with regulations and fully cooperates with regulators. After the GDAX market event in June 2017, we proactively reached out to a number of regulators, including the CFTC. We also decided to credit all customers who were impacted by this event. We are unaware of a formal investigation.”
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