The Commodity Futures Trading Commission and Coinbase Inc. have come to a settlement over charges against the San Francisco-based digital currency exchange.

What Happened: The commission on Friday ordered Coinbase to pay $6.5 million over charges of reckless false, misleading or inaccurate reporting, as well as wash trading by a former employee on Coinbase's GDAX platform.

Coinbase agreed to the order in a settlement in which the company did not admit or deny wrongdoing, the CFTC said.

The charges concerned practices that might have affected the appearance of liquidity in some cryptocurrencies.

In the charge over misleading reporting, the commission singled out two automated trading programs run by Coinbase, Hedger and Replicator, saying the two "generated orders that at times matched with one another." Information published by Coinbase regarding these orders, used in price discovery, in turn may have given investors the wrong impression about the volume and level of liquidity of digital assets, including Bitcoin (CRYPTO: BTC), the commission said.

The orders were made between January 2015 and September 2018, the commission said.

The commission said similar concerns were behind the other example it cited. The commission said a former Coinbase employee intentionally placed buy and sell orders for trades between Litecoin (CRYPTO: LTC) and Bitcoin on Coinbase's GDAX platform.

This constituted wash trading and "created the misleading appearance of liquidity and trading interest in Litecoin," the CFTC said in a statement.

Why It Matters: The action supports claims made by cryptocurrency-skeptics that wash trading and similar practices give an artificially inflated appearance of interest or activity in a given digital asset.

The settlement also comes as the commission reportedly is investigating the major cryptocurrency exchange Binance.

The CFTC has been wading into the crypto space because it considers cryptocurrencies to be commodities under its jurisdiction.

Coinbase is planning to go public in an IPO that could see the company valued as much as $100 billion.

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