Ex-Coinbase manager arrested for alleged crypto insider trading. This case is the very first one in which insider-trading charges have been filed relating to cryptocurrency assets.
On Thursday, July 21st, The U.S. Department of Justice (DOJ) arrested and charged 3 men in relation to an insider trading scheme. The three men in question were revealed to be former Coinbase product manager Ishan Wahi, his brother Nikhil Wahi, and Sameer Ramani.
In a recent press release, the DOJ explains that they suspected Ishan Wahi to have shared information about which crypto assets Coinbase would list with Nikhil Wahi and/or Ramani prior to the actual listing.
The U.S. Securities and Exchange Commission (SEC) also made a statement further explaining, “Ahead of those announcements, which usually resulted in an increase in the assets’ prices, Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were securities, and then typically sold them shortly after the announcements for a profit. The long-running insider trading scheme generated illicit profits totaling more than $1.1 million.”
According to the DOJ, the cryptocurrencies that were traded in relation to the insider trading include TRIBE, ALCX, XYO, GALA, ENS and POWR, among others.
In the statement made by the DOJ, they also referred to a tweet made by Twitter user @cobie in which he had found an ETH address earlier in April that had bought “hundreds of thousands of dollars of tokens” on an asset listing post from Coinbase, before the exchange actually published it.
Found an ETH address that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published, rofl pic.twitter.com/5QlVTjl0Jp
— Cobie (@cobie) April 12, 2022
Coinbase identified these individuals and provided information about them to the DOJ. Coinbase proactively monitors for illegal activity and investigates alleged misconduct.
— Coinbase (@coinbase) July 22, 2022
The crypto exchange itself is not being charged for partaking in the insider trading, however, Coinbase has recently released a statement through their Twitter account explaining that they are taking measures in monitoring and investigating the insider trading claims within their own company.