Just thinking: how can they "do this intentionally and maliciously for their own insider trading to profit off of customers".
How can they profit from it? I guess it's better for them to process your order and get commission?
No idea about coinbase service tho
You place order for BTC at $500 price. Coinbase doesn't actually buy (or account for / match) BTC when you place an order.
Scenario A: BTC rises to $600 each. Coinbase cancels your order.
Scenario B: BTC drops to $400 each. Coinbase approves your order, buys/matches BTC at that point, makes $100 point + spread.