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US: Coinbase ex-executive charged with insider trading

 


Coinbase can no longer get out of the negative headlines. Now a former manager of the company is on trial in the USA because he is said to have used his knowledge for insider trading. 


Among other things, he was familiar with which crypto assets the exchange would take up next and presumably used this knowledge to stock up on the respective tokens in advance. According to a press release from the US Department of Justice , he is said to have repeatedly given tips to his brother and an acquaintance.


The accused is accused of having made a total of 1.5 million US dollars in profit together with his brother. The two brothers have now been arrested after the main suspect tried unsuccessfully to flee the United States in May. The third suspect is probably still on the run.


Influencer takes over the search for clues

Probably the most notable detail is the fact that influencer Jordan Fish, also known as "CryptoCobain", exposed the crime in April. In addition to a very successful presence on Twitter, he also moderates the popular YouTube podcast UpOnly.


He uncovered the activities of the suspects and shared his suspicions and findings via social media. Accordingly, he found many suspicious transactions in which investments were made in the corresponding tokens shortly before they were listed on Coinbase. Since these were often ERC-20 tokens, the trail always led to the same Ethereum wallet.


Even then, the find suggested that it was probably a form of insider trading. Now his discoveries are even part of the investigations against the accused. 


SEC tosses her hat in the ring

The US Securities and Exchange Commission (SEC) also wants to pick a bone with the accused and without further ado declared 9 of the tokens to be securities. The supervisory authority promptly received criticism because such an assessment essentially does not correspond to the previous criteria. Coinbase also rejected the representation.


But by taking this step, the authority can conveniently open further proceedings against the accused directly, which is based on the US securities law. This gives the scandal a sideshow that could become relevant for the entire market in the future.

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