Coinbase Lists Stellar Lumens Amid More Insider Trading Claims

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Coinbase Pro listed XLM, the token belonging to the Stellar Lumens project yesterday, but once again the specter of insider trading raised its head, as a pump prior to the announcement intimated that those with privileged information bought up before the listing. In this case, the official announcement only lifted the coin by 5%, the lowest reaction to a Coinbase listing yet, bringing the power of the Coinbase effect into question.

More Price Manipulation?

XLM was already on Coinbase’s radar, but not many were expecting another listing to come so soon after XRP’s addition. While XLM fans and holders reacted with joy, others were more circumspect about the move and the price action leading up to it, with many comments centering round the same kind of insider trading accusations that have hung around Coinbase listings ever since Bitcoin Cash was listed in 2017. In the case of XLM, the token had seen a 25% rise in the days leading up to the listing was confirmed. This price action confirmed to many that the listing had been revealed up front and kept under the radar, constituting a blatant case of price manipulation:

Some chose to focus on the decreasing impact of the so-called ‘Coinbase effect’, which used to typically see pumps in the 30-50% range upon the official announcement alone:

The Death of the Pre-announcement Pump?

Coinbase announced recently that they were seeking to increase their token offering and match the exploits of exchanges such as Binance, who offer a plethora of altcoins, so we may see tokens being added on a much more regular basis. Through this, the Coinbase effect will probably die out altogether and will be assigned to the crypto past. This would also presumably reduce the benefits of insider trading, which would be a benefit for the ecosystem as a whole.