Last April, a potential insider trading was spotted on the Coinbase platform. Following this, the latter checked to identify the three suspects, including one of its employees. The latter was deported and all three are now facing American justice.
Coinbase investigates insider trading
Earlier this year, the platform Coinbase gossiped about insider trading. Seeking to dispel all suspicion, the exchange then took the matter seriously by conducted an investigation. It turns out that an employee actually disclosed confidential information to his brother and a friend. The employee in question was later fired by Coinbase report their results to the court.
Brian Armstrong, CEO of Coinbase made a point of revealing the facts on his Twitter profile, saying that his company actively monitors any illegal activity :
1/ At Coinbase, we actively monitor for illegal activity and investigate any alleged wrongdoing. In April, we received information about the possible foreclosure of assets before being listed on Coinbase. We immediately launched an investigation into it.
— Brian Armstrong – barmstrong.eth (@brian_armstrong) July 21, 2022
So is Ishan Wahi, former Coinbase product manager, as well as his brother Nikhil Wahi was arrested yesterday in Seattle. Their partner, Sameer Ramani, is is also charged, but still free. All three were charged with using Coinbase’s confidential information to conduct insider trading in crypto-assets to be listed. Each of them has a risk up to one maximum 20 years imprisonment.
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A case highlighted in social networks
It was crypto influencer Cobie who noticed the suspicious coincidences in April portfolio activity. In fact, one address acquired certain tokens for several hundred thousand dollars, 24 hours before Coinbase announced that it would be possibly listed on the platform.
According to the investigation, the three individuals would have repeated their wrongdoing to 14 acquisitions of 25 different properties. Events occurred between June 2021 and April 2022, to generate unrealized capital gains of approximately $1.5 million.
Michael J. Driscoll, Deputy Director of Federal Bureau of Investigation (FBI) in New York, which is also pursuing a similar case for OpenSea, spoke on the subject:
“While the allegations in this case relate to transactions made on a crypto exchange, rather than a more traditional financial market, they still constitute insider trading. […] Today’s action should demonstrate the FBI’s commitment to protecting the integrity of all financial markets, old and new. »
On May 16, Ishan Wahi was called to a meeting with Coinbase’s director of security operations as part of the investigation. Then the suspect tried to flee to India a day before the interview and was arrested by law enforcement before boarding.
This survey shows that given the apparent anonymity of our ecosystem, which is often questioned by politicians, a person’s activity on the blockchain always leaves traces. Here, in addition to this is the public nature of Ethereum (ETH), which allows the community to reveal a crime that, perhaps, would have gone unnoticed in traditional finance.
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Source: United States Department of Justice
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