A former project manager of cryptocurrency exchange Coinbase, was recently arrested for insider trading of cryptocurrencies on the said platform where he works. The indictment was unsealed in a federal court in Manhattan, and the charges were made in the Southern District of New York.
In a press release, the United States Department of Justice (DOJ) stated that there was no room for breaking the law in the decentralized technology space. The justice department has filed cases against former Coinbase employee Ishan Wahi, his brother Nikhil Wahi, and his friend Sameer Ramani with wire fraud conspiracy and wire fraud.
This is the first insider trading case involving cryptocurrency trading.
According to the DOJ, Ishan tipped off his two accomplices about the assets that were soon to be listed on the exchange—when listings happen, especially on a major exchange like Coinbase, the value of those cryptocurrencies will most likely increase.
For over ten months, the three were able to generate $1.5 million in profits from 25 cryptocurrencies. Their scheme ran from June 2021 to April 2022, according to the filings. Among the cryptocurrencies traded were Powerledger (POWR), Gala (GALA), XYO (XYO), Alchemix (ALCX), and Tribe (TRIBE).
The DOJ alerted that Ishan’s friend, Sameer Ramani, is still at large. The Wahi brothers, on the other hand, have already been presented at the United States District Court for the Western District of Washington.
With the recent event, U.S. Attorney Damian Williams assessed that the charges were a reminder that people in web3 and the metaverse as a whole must follow the law.
“Today’s charges are a further reminder that Web3 is not a law-free zone. Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street,” says Atty. Damian Williams
Coinbase also responded to the issue saying that it had provided information to the DOJ and that it monitors for illegal activity and investigates alleged misconduct. Philip Martin, Chief Security Officer, also noted that the exchange had terminated the employee and that it was keen on preventing wrongdoing.
Last month, former OpenSea product manager Nathaniel Chastain was finally charged with wire fraud and money laundering nine months after the insider trading incident where he used insider knowledge from working at the company to purchase NFTs, which would likely to go up in price, that were about to be posted to the popular trading site’s homepage. (Read more: Former OpenSea Exec Charged With NFT Insider Trading)
This article is published on BitPinas: What You Should Know about Insider Trading Charges Against a Former Coinbase Employee
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.