After a week of uncertainty, Coinbase has launched an internal investigation over fears its own staff exploited its move into bitcoin cash – a spin-off of the original bitcoin.
Trading on market information not available to the public would be a major breach of trust for an industry still struggling for mainstream legitimacy.
Brian Armstrong said he had repeatedly warned his staff not to disclose its launch plans to family or friends or to trade in the digital asset themselves.
He wrote on Medium: ”It appears the price of Bitcoin Cash on other exchanges increased in the hours before our announcement.”
Watch live bitcoin price streams as the cryptocurrency continues to shift in value.
Bitcoin was down to $16895 (£12642) this morning after climbing above $19600 late last week.
The cryptocurrency is continuing to drop and it is currently valued at £12140, according to Coindesk on Thursday afternoon.
Oliver Isaacs, a Cryptocurrency investor, believes the cash coin bubble will eventually burst with massive consequences for investors.
He said: “Personally I think Bitcoin will be the biggest bubble of our lifetime.
“Due to the lack of Bitcoin regulation investing in Bitcoin is a risky business and no one knows if or when Bitcoin will crash.”
Since its inception, bitcoin has been linked to illicit criminal activity. Its criminal use was up to 75 per cent this year and it accounts for 40 per cent of payments between criminals.