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Insider trading at Coinbase? Prosecutor determined

 


Coinbase can't get out of the scandals. The largest Bitcoin exchange in the US is struggling with falling crypto prices, laying off around 18 percent of the workforce and now also has a case of possible insider trading under its belt.


As the New York public prosecutor writes in an extensive press release, investigations are currently underway against ex -Coinbase employee Ishan W. The former product manager is said to have systematically given his brother Nikhil W. and friend Sameer R. information about upcoming coin and token listings at Coinbase have, which the two are said to have used for themselves. The prosecutor's office puts the profits made from this at 1.5 million US dollars. Investigations are also underway against brother W. and friend R.


According to the press release, the two brothers have already been arrested, but Sameer R. remains at large for the time being. According to the public prosecutor, between June 2021 and April 2022, R. is said to have known about upcoming listings on the exchange in at least 14 cases and passed this information on to one or both people. These, in turn, were able to use the information to open profitable positions, since the price of the coin in question typically rises after the announcement of new listings. W. is said to have been part of a small circle at Coinbase who knew about new listings during the period in question. However, the employer did not allow the information to be passed on.


The criminal energy with which the suspects are said to have acted is also shown by the fact that Nikhil W. and Sameer R. did not trade the assets in question in their own name, but with the help of accounts that run on third parties. They are also said to have attempted to obfuscate transaction history using a complicated system of Ethereum addresses.


Twitter influencer becomes private detective

“Cobie” was also decisively involved in the clarification of the alleged case of insider trading. The Twitter influencer, who has more than 700,000 followers, pointed out traders who had bought assets worth "hundreds of thousands of dollars" back in April this year. The assets, as you might have guessed, were listed on Coinbase within 24 hours.


According to the public prosecutor, Coinbase pulled out all the stops in the course of the Cobie tweet to find the originators of the insider trading system and finally came across Ishan W., who was then fired. A press release issued by the US company as part of the internal investigation against those involved states:


Coinbase takes allegations of misuse of company information very seriously, as demonstrated by our quick investigation into this matter. We have zero tolerance for this type of misconduct and will not hesitate to take action against any employee if we identify any misconduct.


When Ishan W. was informed about the ongoing investigations against him, he probably tried to leave the country for India. However, the police stopped the ex-Coinbase employee at the airport.

Insider trading carries a prison sentence of up to 20 years in the USA.

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