By
Tolu Ajiboye
April 24th, 2024
The scheme, according to the Department of Justice (DOJ), ran from June 2021 to April 2022. Over the period, they profited from at least $1.5 million in illegal trades.
The US Attorney’s Office for the Southern District of New York, and the Securities and Exchange Commission have charged a former product manager of Coinbase Global Inc (NASDAQ: COIN) over an insider trading tipping scheme. According to reports, Ishan Wahi who worked with the asset listing team leaked confidential information on new coins that were slated to be listed by Coinbase to his brother Nikhil Wahi and friend Sameer Ramani. They were charged with two counts of wire fraud conspiracy and two counts of wire fraud.
According to the description of US Attorney Damian Williams, this is the first-ever insider trading case concerning the crypto market.
“Our message with these charges is clear: fraud is fraud is a fraud, whether it occurs on the blockchain or Wall Street,” said Williams.
The trading Coinbase scheme, according to the Department of Justice (DOJ), ran from June 2021 to April 2022. Over the period, they profited from at least $1.5 million in illegal trades. This was from 25 separate crypto-asset and at least 14 different Coinbase public listings. DOJ also made mention of a case that happened on April 11, 2022. This was when Coinbase had announced that it was going to list dozens of cryptos. An investor and commentator identified as Cobie then made a revelation in a tweet stating:
“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.”
This, according to the DOJ, was referring to the activities of Ramani. In addition, it was mentioned that he and Wahi contributed to the large quantity purchase of at least six of the crypto assets in that listing by multiple anonymous Ethereum blockchain wallets.
Ishan Wahi was then called for an in-prison meeting regarding the Coinbase Internal Investigation. However, he attempted to fly out to India but was stopped by law enforcers at the airport.
SEC has based on the investigation claimed that nine of the assets traded by Wahi and Ramani were securities. This was stated in a complaint filed by the SEC in parallel with the DOJ. However, Coinbase has refuted this claim.
“No assets listed on our platform are securities, and the SEC charges are an unfortunate distraction from today’s appropriate law enforcement action,” said Coinbase in a blog post.