Current Events in March 2021

Pfizer, one of the pharmaceutical companies leading the way in vaccinations against the coronavirus, announced that it has begun an early-stage clinical trial to test its experimental oral antiviral drug for COVID-19.

The company’s move forward comes after completing a Phase 1 U.S. study in healthy adults to evaluate the safety and tolerability of an oral antiviral therapeutic drug for SARS-CoV-2, the virus that causes COVID-19. 

The company calls the “clinical candidate” -- formally known as PF-07321332 -- a “potent protease inhibitor with potent antiviral activity against (COVID-19).” Protease inhibitors are antiviral drugs most often used for treating viral infections like human immunodeficiency virus (HIV) and hepatitis C virus (HCV).

“Tackling the COVID-19 pandemic requires both prevention via vaccine and targeted treatment for those who contract the virus,” said Mikael Dolsten, Pfizer’s Chief Scientific Officer and President of Worldwide Research, in a press release. “Given the way that SARS-CoV-2 is mutating and the continued global impact of COVID-19, it appears likely that it will be critical to have access to therapeutic options both now and beyond the pandemic.”

Additional upsides to the drug

There’s a great upside to the drug if it’s proven successful. Pfizer says the drug has performed well against other coronaviruses, giving it added potential in addressing future coronavirus threats. The company also heralded the drug’s potential novel treatment option for hospitalized patients.

“We have designed PF-07321332 as a potential oral therapy that could be prescribed at the first sign of infection, without requiring that patients are hospitalized or in critical care,” Dolsten said. 

Pfizer is also testing an intravenous treatment in hospitalized clinical trial patients with COVID-19.

More consumers will see $1,400 stimulus payments from the government in their bank accounts or mailboxes on Wednesday, March 24. 

The second batch of stimulus payments began processing on Friday and will hit the bank accounts of taxpayers who haven’t yet received their money from the government on Wednesday or even earlier, the Treasury Department, IRS, and Bureau of the Fiscal Service announced on Monday. 

The agencies said the second disbursement round includes a “large number” of mailed paper checks and prepaid debit cards. Consumers who don’t receive a March 24 payment by direct deposit can expect to receive a mailed payment in the coming weeks. 

Coronavirus stimulus payments

Many Americans have already received the stimulus payments authorized by Congress and President Joe Biden earlier this month. The first batch of payments included about 90 million payments that totaled more than $242 billion. 

Eligible taxpayers are entitled to at least $1,400 per person, plus $1,400 per child and adult dependent.

“The IRS continues to send the third round of stimulus payments in record time,” IRS Commissioner Chuck Rettig said in a statement.

The IRS said consumers who haven’t received their payment shouldn’t call the agency. Instead, they should use its “Get My Payment” tool to check on the status of their payment. 

While it’s not exactly an honor that a city is going to splash on a billboard as you enter town, Miami, Los Angeles, Tampa, Washington D.C., and Atlanta lead the way in Orkin Pest Control’s annual Top 50 Termite Cities list. 

Columbia, SC isn’t likely to promote its ranking either -- unless it’s trying to get a pest control company to move and set up shop there. It made the largest leap this year, moving up eight spots from 2020. Waco, Wichita, and Austin are all newcomers to the list and hold spots 40, 46, and 47, respectively.

Weather and location are big factors

The just-released list is based on both residential and commercial treatment data from the metro areas where Orkin performed the most first-time customer termite treatments from February 1, 2020 – January 31, 2021. Many of the cities on the list are predisposed to these pests because of where they’re located.

"Weather conditions directly impact termite swarms," said Glen Ramsey, Orkin entomologist, in a press release. "Most subterranean termites swarm in the spring and summer, while drywood termites typically swarm in the late summer and fall."

Why are cities a favorite? "Termites swarm when they are looking for moisture and food, and with fewer dead trees to invade in urban areas, termites will move to residential areas for food and moisture," Ramsey said.

A quick termite check-up

As we head into spring, home and property owners will want to take a closer look into their termite situation. Ramsey recommends that the first thing property owners should look into are termites residing in wooden structures, such as porches and decks that are directly touching the ground. Firewood leaning against the house, areas of damp soil, and dead trees or other landscaping near the house may also be problematic areas. 

The signs of a termite infestation to look for include:

• A temporary swarm of termites in your home, in the soil, or around the exterior of the house;

• Cracked or bubbling paint;

• Wood that sounds hollow when tapped;

• Mud tubes on the interior or exterior of walls or wooden beams;

• Discarded wings from swarmers; and

• Sightings of termite droppings in or near the house.

Hiring a pest control service

If you encounter any of those signs, then it might be a good time to call a pest control company to verify the situation. In preparing a consumer guide on pest control, ConsumerAffairs’ Research Team takes your prep work a step further by breaking down pest control companies by unique situations. Things to consider include:

Rodents: Some pest control companies work on ridding spaces of rodents like rats and mice. These companies may not have specialized solutions for dealing with insects (like sprays, chemicals, etc.), but they do have specialized knowledge for ridding of animals (e.g. with traps, steel wool, building maintenance, etc.).

Insects: Insect infestations are also a common problem that certain specialized pest control companies deal with. Companies that deal with insects often have specific sprays or poisons that can be sprayed to rid houses of bugs. They also have knowledge of using traps to attract and kill bugs, as well as different natural preventative methods families can take to ensure bugs do not reinfest a home.

Less common pests: Some pest control companies deal specifically with more specialized problems, such as bedbugs, raccoons, or termites. While some large, generalized pest control companies are well-versed in a homeowner’s most concerning pests -- like ants, roaches, and mosquitoes -- more specialized companies can deal with problems that are rarer (like bed bugs) or regionalized (like scorpions).

Before signing up with a company, there are things you should consider. ConsumerAffairs has put together a list of those FAQs here.

There’s more evidence that the steep reduction in people on the road during the pandemic last year didn’t make highways any safer.

Not only did traffic deaths from car crashes increase, but a new report from the Governors Highway Safety Association (GHSA) estimates that the U.S. pedestrian fatality rate rose 20 percent in the first half of 2020. The numbers for the second half of the year have not yet been analyzed.

The report was compiled by breaking down state data gathered by individual state governments. The analysis shows that 2,957 pedestrians were killed from January through June last year.

This occurred despite the fact that motorists traveled 16.5 percent fewer miles during that period, which included business closings and shelter-in-place orders. During that six-month period, the rate at which drivers struck and killed pedestrians jumped to 2.2 deaths per billion vehicle miles traveled (VMT). That’s a significant increase from 1.8 deaths during the same period in 2019.

“Walking should not be a life and death undertaking, yet many factors have combined to put pedestrians at historical levels of risk,” said GHSA Executive Director Jonathan Adkins. “The traffic safety community should focus on a comprehensive approach that uses every tool available to save lives, including engineering, community outreach, emergency response and equitable enforcement that prioritizes the prevention of driving behaviors – like speeding, distraction and impairment – that pose the greatest threats to non-motorized road users.”

Drivers have been less safe during the pandemic

Safety experts suggest that the increase in deaths behind the wheel and while walking comes from the same source. They say significant drops in traffic caused too many drivers to drive faster and be less attentive.

As we recently reported, the National Safety Council’s preliminary traffic death count for 2020 also showed a surprising increase. In a year when accidents, injuries, and deaths should have been dramatically lower because of the pandemic, 42,060 people are estimated to have died on American highways in 2020. That’s an 8 percent increase over 2019.

The National Safety Council also found that there was less traffic last year, with miles driven plunging by 13 percent. Despite that, the preliminary estimated rate of death spiked by 24 percent over the previous 12-month period. According to National Safety Council data, that’s the largest increase since 1924, when Americans were just learning to drive.

Besides speed, distracted driving may also be contributing to both highway and pedestrian deaths. The GHSA report notes that pedestrian deaths have been rising since 2010, a time when smartphones began to proliferate. 

The number of pedestrians killed after being hit by a vehicle fell from 8,096 in 1979 to 4,109 in 2009, but it has risen every year since then.

A new study conducted by researchers from the Endocrine Society looked at the benefits associated with starting meals earlier in the day. According to their findings, consumers who begin eating before 8:30 a.m. may lower their risk of developing type 2 diabetes. 

“With a rise in metabolic disorders such as diabetes, we wanted to expand our understanding of nutritional strategies to aid in addressing this growing concern,” said researcher Dr. Marriam Ali. 

Timing matters

To determine what effect the timing of meals had on consumers’ disease risk, the researchers analyzed data from more than 10,500 participants enrolled in the National Health and Nutrition Examination Survey (NHANES). While other studies have looked at the benefits associated with time-restricted eating and intermittent fasting, the researchers evaluated how various eating patterns affected blood sugar and insulin resistance. 

One group of participants ate their meals over the course of a 13-hour period; another group ate within 10 and 13 hours; and a third group ate all three meals within a 10-hour window. The participant groups were then broken down even further depending on what time of the day they started eating.

The researchers learned that the starting time of meals was more important to health outcomes than how long throughout the day the participants were eating. Starting meals before 8:30 a.m. was linked with the greatest health outcomes; participants who started eating earlier in the day had better insulin resistance and blood sugar levels than those who started eating later in the morning.

“We found people who started eating earlier in the day had lower blood sugar levels and less insulin resistance, regardless of whether they restricted their food intake to less than 10 hours a day or their food intake was spread over more than 13 hours daily,” Dr. Ali said. “These findings suggest that timing is more strongly associated with metabolic measures than duration, and support early eating strategies.”

Eating a lot of processed meats has been found to cause several adverse health effects. Now, researchers from the University of Leeds are exploring how unhealthy diet choices can affect consumers’ cognitive functioning. 

Their study showed that eating large quantities of red and processed meats may increase the risk of developing dementia. 

“Worldwide, the prevalence of dementia is increasing and diet as a modifiable factor could play a role,” said researcher Huifeng Zhang. “Our research adds to the growing body of evidence linking processed meat consumption to increased risk of a range of non-transmissible diseases.” 

Cognitive risks of an unhealthy diet

The researchers analyzed data from nearly 500,000 people enrolled in the U.K. Biobank to determine what effect processed meats had on long-term dementia risk. All of the participants were between 40 and 69 years old, and they recorded the frequency with which they consumed red and processed meats, as well as what kind of meat they were eating. 

The study showed that eating red and processed meats in excess were associated with an increased risk of dementia. Participants who ate 25 grams of processed meat each day were nearly 45 percent more likely to develop dementia. 

The researchers learned that several factors impacted the participants’ diet choices. Men were more likely than women to eat more processed meat, as were those who were overweight, smoked, or followed generally unhealthy diets. 

Certain factors increased the participants’ likelihood of developing dementia. For example, men were more likely than women to struggle with cognitive function. Those who didn’t exercise or had a genetic predisposition for the condition were also more likely to develop it.

Moderation is key

While eating processed meat in excess was associated with an increased risk of dementia, some red meats had protective benefits for consumers’ long-term cognitive health. Eating 50 grams of things like veal or pork per day was associated with a 20 percent lower risk of dementia. 

Moving forward, the researchers hope that more work is done in this area because knowing the risk factors can help prevent dementia among more vulnerable populations. 

“Anything we can do to explore potential risk factors for dementia may help us to reduce rates of this debilitating condition,” said researcher Janet Cade. “This analysis is a first step towards understanding whether what we eat could influence that risk.” 

More consumers are calling their credit card companies and asking for better terms, and a new report from LendingTree suggests that credit card companies are cooperating.

The report suggests that the coronavirus (COVID-19) pandemic has been a major factor. The financial hardships caused by the virus have prompted more requests from cardholders, and the report says it’s also a factor in making lenders more lenient.

The report found that 83 percent of cardholders who asked to have their credit card's interest rate reduced had their request granted. The success rate when asking a lender to waive a late fee was even higher -- 88 percent.

Eighty-three percent of cardholders who asked for a higher credit limit received one, which is remarkable since credit card companies unilaterally reduced credit limits for some customers early in the pandemic. 

It never hurts to ask

Ninety-two percent of those who asked their credit card company to drop an annual fee had their request granted. Matt Schulz, LendingTree’s chief credit analyst, says the lesson is that it never hurts to ask.

"The truth is that people have way more power over their credit card issuer than they realize, and they only need to wield it to save themselves some real money," Schulz said. 

But the report makes clear that too few credit card customers are making these kinds of requests. Fewer than half of those with an annual fee card asked for that fee to be waived or reduced in the last year, but almost everyone who asked got a “yes” answer.

Women were more likely than men to speak up and ask for these breaks than in past years and, in most cases, were more likely to have them granted than in previous years. People who experienced a loss of income during the pandemic asked their lenders for help more than those whose income remained the same. 

Lenders want to be seen as accommodative

LendingTree found that, for the most part, these requests were met with approvals on the part of the credit card companies, which no doubt wanted to be viewed as helpful during a trying time for the country. But Schulz says consumers shouldn’t wait for an emergency to ask their credit card company for a break.

"It's incredibly important to know that you have options during a global, economy-wrecking pandemic, of course, but it is also a good idea even in the best of times,” he said. “The more fees you can avoid and the more interest rates you can lower, the better — and as this survey shows, often all it takes is a simple phone call to make it happen."

Parker Squared of Dallas, Texas, is recalling about 3,000 Shepherd Boy plush toys with wire staff sold in the U.S. and Canada..

The metal wire in the shepherd’s staff can become exposed, posing a laceration hazard.

The firm has received 12 reports of the shepherd’s staff fabric unwrapping and exposing the metal wire with one report of a sharp edge. No injuries have been reported.

This recall involves the shepherd boy plush toy that holds a shepherd’s staff, and measures 12 inches tall. The staff is wrapped in fabric.

The shepherd boy toy is clothed in white with a red vest, a green sash and has sandals, a sewn on face and orange yarn hair.

The shepherd boy plush toy, manufactured in China, was sold online at TheShepherdsTreasure.com and on Amazon.com from November 2020, through January 2021, for about $16.

What to do

Consumers should immediately discard the toy’s wire staff and contact The Shepherd’s Treasure for a full refund of the value of the Shepherd Boy plush toy in the form of a gift certificate.

Consumers can continue to use the plush toy without the shepherd’s staff. The Shepherd’s Treasure is contacting all purchasers directly.

Consumers may contact The Shepherd’s Treasure toll-free at (844) 310-2229 from 9 a.m. to 5 p.m. (CT) Monday through Friday, by email at recall@theshepherdstreasure.com, or online at https://www.theshepherdstreasure.com/ and click on “Recall Notice” at the bottom of the page for more information.

Volkswagen Group of America is recalling 2,535 model year 2018-2019 Atlas vehicles with Continental tires.

One or more tires may have been cured for too long during production.

Over cured tires may develop a break in the sidewall, resulting in sudden air loss or belt edge separation which could lead to tread/belt loss.

Either condition can cause a loss of vehicle control, increasing the risk of a crash.

What to do

Volkswagen will notify owners, and dealers will inspect the tires, and replace them -- as necessary -- free of charge.

The recall is expected to begin May 4, 2021.

Owners may contact Volkswagen customer service at (800) 893-5298. Volkswagen's number for this recall is 44R1.

Bravo Packing of Carneys Point, N.J.. is expanding its earlier recall of two pet food products to include all pet food and bones in all package sizes.

The products may be contaminated with Salmonella and Listeria monocytogenes.

No human or animal illnesses have been reported to date.

A list of the recalled products, sold in retail stores and to consumers directly nationwide, may be found here.

What to do

Customers who purchased the recalled products should handle them with caution and discard them in a secure container.

Consumers with questions may contact Bravo Packing at (856) 299-1044 Monday – Friday, 9:00 AM-2:00 PM (EST).

Coronavirus (COVID-19) tally as compiled by Johns Hopkins University. (Previous numbers in parentheses.)

Total U.S. confirmed cases: 29,821,403 (29,799,255)

Total U.S. deaths: 542,382 (542,168)

Total global cases: 123,321,541 (123,040,456)

Total global deaths: 2,716,990 (2,712,656)

AstraZeneca vaccine shows 79 percent efficacy in U.S. trial

The U.S. could soon have a fourth vaccine to use against the coronavirus (COVID-19). AstraZeneca reports that its vaccine was 79 percent effective in just-concluded U.S. clinical trials. The company plans to seek authorization to distribute the vaccine in the U.S.

The vaccine has been widely used in Europe, but it was sidelined earlier this month after reports of some vaccine recipients developing blood clots. After an investigation, European health regulators determined there was no proven link between blood clots and the vaccine.

“This analysis validates the AstraZeneca COVID-19 vaccine as a much-needed additional vaccination option, offering confidence that adults of all ages can benefit from protection against the virus,” said Ann Falsey, a professor at the University of Rochester School of Medicine and co-lead principal investigator for the trial.

Spring break crowds pose virus threat, police say

Law enforcement officials in Miami Beach are expressing frustration at the growing crowds of young people gathering on beaches and at nightspots, many of whom are foregoing masks and social distancing. Police imposed an 8 p.m. curfew over the weekend to try to disperse the crowds.

Authorities have suggested that Florida is experiencing an influx of out-of-state people, in part, because of its relaxed coronavirus restrictions. Florida no longer has a statewide mask mandate.

Police used force Saturday night to remove people from the streets after the curfew. They say they made more than 1,000 arrests, with 90 percent of those arrested being from out of town.

Royal Caribbean ready to set sail

After being sidelined for nearly all of 2020, the Royal Caribbean International cruise line has announced a summer lineup of seven-night cruises onboard Adventure of the Seas. The voyages will set sail this June from a new homeport in Nassau, The Bahamas. 

Destinations for the trips include Coco Cay, various ports in The Bahamas, and Cozumel, Mexico. Travelers can start booking as soon as Wednesday, March 24, and set sail starting June 12. The new itineraries departing through August, which will sail with a vaccinated crew, will be available to adult guests who are fully vaccinated against COVID-19 and those under the age of 18 with negative test results.

"The vaccines are clearly a game-changer for all of us, and with the number of vaccinations and their impact growing rapidly, we believe starting with cruises for vaccinated adult guests and crew is the right choice,” said Michael Bayley, president, and CEO, Royal Caribbean International.

Many Americans are taking it slow

You wouldn’t know it by the crowded stores, restaurants, and airports, but a new poll shows that a majority of Americans are leery of getting back to normal while the pandemic is still going on. Sixty-two percent of people questioned by healthinsurance.com say they worry about getting the virus.

A quarter of those in the survey said they would unfriend someone if they exposed them to COVID-19, and seven in 10 say they have or know someone who has tested positive for COVID-19. 

Most say they plan to get the vaccine, but even after being vaccinated, 62 percent said they have apprehensions about life "returning to normal.".

Texas Roadhouse CEO dies after COVID-19 battle

Texas Roadhouse founder and CEO Kent Taylor is the latest high-profile victim of COVID-19. His family confirms that Taylor took his own life over the weekend after suffering extremely severe symptoms of the virus.

"Kent battled and fought hard like the former track champion that he was, but the suffering that greatly intensified in recent days became unbearable,” the company said in a statement.

Taylor’s family said one of the most severe symptoms was tinnitus, a common condition involving ringing or other noises in the ears. Although it’s not that common, health experts say the coronavirus can exacerbate tinnitus problems.

Around the nation

• New Jersey: The state is suddenly grappling with an uptick in COVID-19 cases after weeks of declines. The state health department now lists three counties --  Hunterdon, Mercer, and Somerset -- as showing “high” coronavirus activity.

• Kentucky: Gov. Andy Beshear reports on Twitter that cases of COVID-19 have continued to fall in the state for 10-straight weeks. He also reported a positivity rate of 2.97 percent, the lowest it's been since July. 3.

• Washington: Colleges throughout the state have sent letters to students urging them not to travel to crowded beaches for spring break. The University of Washington has told students that “non-essential travel is strongly discouraged” until the virus is under control.

Drug giant AstraZeneca reports that its coronavirus (COVID-19) vaccine was 79 percent effective in U.S. clinical trials, raising the possibility that the U.S. could soon deploy a fourth vaccine against the pandemic.

The vaccine, produced in collaboration with scientists at Oxford University, was tested on 32,000 people in the United States. Its efficacy was similar to results conducted in other nations.

The vaccine has been widely used in Europe, but its use was halted earlier this month after reports of some vaccine recipients developing blood clots. After an investigation, European health regulators determined there was no proven link between blood clots and the vaccine.

Following the completion of the U.S. trial, company officials said they would seek emergency use authorization (EUA) from the U.S. Food and Drug Administration (FDA) for use in the U.S. If approved, the AstraZeneca vaccine would be added to the vaccines produced by Moderna, Pfizer and BioNTech, and Johnson & Johnson.

‘Much-needed option’

Like the other approved vaccines, the AstraZeneca vaccine was found to be 100 percent effective at preventing severe forms of COVID-19 and death. It was 80 percent effective in preventing illness in people aged 65 and older.

“These findings reconfirm previous results observed in AZD1222 trials across all adult populations but it’s exciting to see similar efficacy results in people over 65 for the first time, said Ann Falsey, a professor at the University of Rochester School of Medicine and co-lead principal investigator for the trial. “This analysis validates the AstraZeneca COVID-19 vaccine as a much-needed additional vaccination option, offering confidence that adults of all ages can benefit from protection against the virus.”

The U.S. trial results have yet to undergo an independent peer review, a critical last step. AstraZeneca said the results of the U.S. trial will be submitted for publication in a peer-reviewed journal.

Like the Pfizer and Moderna vaccines, the AstraZeneca vaccine requires two doses, four weeks apart, to be fully effective. Previous studies have shown that an extended interval between shots could further improve the efficacy.

The vaccine also has some logistical advantages. Like the Johnson & Johnson vaccine, it can be stored, transported, and handled at normal refrigerated conditions of 36-46 degrees Fahrenheit for at least six months and administered without the need for preparation within existing health care settings.

The FBI’s Internet Crime Complaint Center (aka IC3) has just released its latest Internet Crime Report, and, in a word, it’s concerning.

Online crime mushroomed in 2020, with 791,790 complaints of suspected internet crime -- an increase of 300,000 complaints over 2019 with losses amounting to more than $4.2 billion. 

Phishing scams took home the prize for the most frequent crime, with 241,342 victims; it was followed by non-payment/non-delivery scams (108,869) and extortion (76,741). The FBI said that ransomware incidents also continue to rise, with 2,474 incidents reported in 2020.

When it comes to losing the most money, the title went to business email compromise scams, with $1.8 billion lost. Romance and confidence schemes contributed to $600 million in losses, and investment fraud led to $336 million swindled from consumers.

Coronavirus and unemployment insurance scams make waves

Pandemic-related scams flourished in 2020, with the FBI receiving over 28,500 complaints related to COVID-19. Scammers targeted businesses and individuals alike with schemes related to CARES Act stimulus funds, unemployment insurance, Paycheck Protection Program (PPP) loans, and Small Business Economic Injury Disaster Loans. Most of the IC3 complaints that were linked to CARES Act fraud involved grant fraud, loan fraud, and phishing for Personally Identifiable Information (PII). 

Scams related to unemployment insurance were particularly troublesome for consumers to deal with. Officials said that citizens in several states ran into dishonestly submitted online unemployment insurance claims using their personal identities. 

Unfortunately, a number of the victims in this scheme had no clue they had been targeted until they attempted to file their own legitimate claim for unemployment insurance benefits. At that point, they got a notification from either their state unemployment insurance agency or employer to inform them that the benefits had already been collected.

Don’t take the bait

The FBI says no one is excluded from being a fraud target -- not Facebook, not churches, and not even grandma and grandpa. The agency encourages people to protect themselves by following these tips::

• Be extremely careful with online communications. Verify the sender of an email. “Criminals will sometimes change just one letter in an email address to make it look like one you know. Also, be very wary of attachments or links. Hover your mouse over a link before clicking to see where it is sending you,” IC3 officials suggested.

• If it’s too good to be true… You already know the axiom, but the agency can’t emphasize it enough: be on the lookout for anyone offering you something that is “too good to be true,” especially when it comes to an investment opportunity or medical advice.

• Trust people you know are reliable. Trust sources like your personal doctor, the Centers for Disease Control and Prevention (CDC), and your local health department for medical information, and use government agencies like the Federal Trade Commission and Internal Revenue Service when you need financial and tax information. Taking the effort to contact them for confirmation about any notification you receive can save you a lot of headaches in the long run. They’re in the business of protecting consumers and can quickly verify whether something is real or not. 

IC3 itself is also a valuable resource. Through the Recovery Asset Team, the center successfully froze approximately $380 million of the $462 million in reported losses in 2020 -- an impressive success rate of nearly 82 percent. 

To file a complaint or contact IC3, you can visit its website here.

Coinbase has been hit with a $6.5 million fine from the Commodity Futures Trading Commission (CFTC) for allegedly misleading consumers about its trading volumes.

The CFTC said the cryptocurrency exchange ran automated trading programs that “recklessly delivered false, misleading, or inaccurate reports concerning transactions in digital assets” between January 2015 and September 2018.

The company is accused of including trades of bitcoin and litecoin between two programs run by Coinbase in the data it shared with outside services, therefore giving the appearance of more trading volume than there was in actuality. 

The alleged “self-trading” took place on Coinbase’s two automated trading programs, Hedger and Replicator. Regulators say one of Coinbase’s motives was to attract more investors by giving the illusion of increased trading interest. 

“Reporting false, misleading, or inaccurate transaction information undermines the integrity of digital asset pricing,” the CFTC’s Acting Director of Enforcement Vincent McGonagle, said in a statement. “This enforcement action sends the message that the Commission will act to safeguard the integrity and transparency of such information.”

Wash trading

The CFTC also found that a former Coinbase employee abused the programs between August and September 2016 to buy and sell cryptocurrency in “wash trades” that artificially inflated activity. The Commission said it’s holding Coinbase “vicariously liable” for the fraudulent trades.

"The order also finds that over a six-week period—August through September 2016—a former Coinbase employee used a manipulative or deceptive device by intentionally placing buy and sell orders in the Litecoin/Bitcoin trading pair on GDAX that matched each other as wash trades,” the CFTC’s statement continued. “This created the misleading appearance of liquidity and trading interest in Litecoin. Coinbase is therefore found to be vicariously liable as a principal for this employee’s conduct.” 

The total penalty for the CFTC’s charges of improper reporting of exchange volume and “self-trading” is $6.5 million. Coinbase didn’t admit or deny the Commission’s findings.