The Commodity Futures Trading Commission (CFTC) has reportedly been in contact with Coinbase as part of a probe into the June 21st flash crash that saw the price of ether plunge to 10 cents in mere milliseconds. A Bloomberg report suggests that the financial watchdog is seeking more information about that day’s events, including details about the role played by margin trading on the GDAX exchange.
That so-called ‘flash crash’ was sparked by a $12.5 million trade, which led other investors to sell. The resulting price decline set off a cascade of automatic sell orders that caused the price of ether to drop from $317.81 to a mere 10 cents. Buy orders quickly sent the price soaring above $300, and Coinbase has since said that it has credited the accounts of all customers affected by the incident.
Coinbase issued a statement via email, noting its effort to cooperate with regulatory agencies:
“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.”