Coinbase has been under attack from the SEC for a few months. The regulator accused some executives of insider trading. After a long investigation, the evidence is there and the crypto sector is having a rather sensational first experience.
When Coinbase decides to investigate
Earlier this year, one of the top crypto trading platforms was the subject of insider trading rumors. Faced with growing hostility towards the exchange, Coinbase decided to investigate to clear itself of all suspicion. At the end of the latter, it appears that an employee of the company communicated confidential information to his relatives.
On his Twitter profile, Brian Armstrong, the CEO of Coinbase wanted to explain facts. In doing so, he reiterated that his company carefully monitors any illegal activity. The Manhattan Federal Prosecutor’s Office and Regulatory Authority (SEC) announced Thursday the indictment of three suspects. In this case that of a product manager of the platform, his brother and a friend.
Thus, Ishan Wahi, 32, and Nikhil Wahi, his brother, were arrested Thursday morning in Seattle. As for the third, Sameer Ramani, he is still at large. FBI Deputy Director Michael Driscoll said the three suspects made around $1.5 million in illegal transactions in at least 25 cryptocurrencies.
The powerful action of social networks on this case
Ishan Wahi had worked at Coinbase since October 2020 as a product manager in charge of an asset list. Since he was aware of the asset listing schedule, the latter took the opportunity to prepare his dirty tricks. Indeed, he entrusted this information to his two acolytes who were responsible for buying the tokens before they were listed on the stock exchange.
Then they resold them for a profit after the public listing on Coinbase. It was Cobie, a crypto influencer who brought to light some suspicious details last April regarding a wallet’s activity. Indeed, the latter reported on Twitter that an ethereum wallet had bought certain tokens for several hundred thousand dollars 24 hours before they were listed on the platform.
The insider trading defendants repeated their wrongdoing 14 times before the matter was discovered. The latter believed they were using the apparent anonymity of the crypto ecosystem. However, even if it is often questioned by some politicians, this survey shows that activity on the blockchain still leaves traces.
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