The good, the bad and the ugly – Yesterday, Ishan Wahia former product manager Coinbase and two members of his entourage were arrested for insider trading and wire fraud. The opportunity being the thief, the zealous American financial policemen found material to hurt the crypto giant.
The cop and the thief
The secret of our case was lifted yesterday. the DOJ (Department of Justice) announced the arrest of three men. A old frame, product manager at Coinbase, his brother and a friend. The three accomplices are accused of insider trading and would have thanks to their crime won $1.5 million.
The procedure is quite simple. Our scammers used centralized exchanges with borrowed names. Then they transferred the funds to anonymous wallets on the blockchain Ethereum.
In a press release publicly disclosing the case, Damian WilliamsUnited States Attorney confirms and argues the importance of judge this case harshly in order to fight against fraud:
“Today’s charges are yet another reminder that Web3 is not a lawless zone. Last month, I announced the first ever insider trading case involving NFTs, and today I am announcing the first ever insider trading case involving cryptocurrency markets. (…) the Southern District of New York will continue to work hard to bring fraudsters to justice wherever we find them. »
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XXL bounty at Coinbase: $1.5 million larceny
I.Wahi, our defendant was in charge of the asset listing with Coinbase since October 2020. From August 2021 to May 2022, he was among the employees who therefore knew the future launch dates of the cryptocurrencies listed and supported by Coinbase. He had access to confidential discussions of the society. Good prince, this one informed his two accomplices. This then allowed them tobuy cheap cryptocurrency before their launch.
The scammers started to get noticed on April 11. A new list of 10 cryptocurrencies was then expected on Coinbase. At the time, Cobya crypto influencer, reports an Ethereum address that had purchased hundreds of thousands of dollars of a so-called proprietary cryptocurrency.
” Found an ETH address that purchased hundreds of thousands of dollars worth of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was posted”
Tweet by Cobie
Coinbase has replied publicly on Twitterr and announced investigate. Subsequently, the American giant confirmed, on its medium account, its strict policy in terms of confidentiality of confidential information.
In this sense, the director of security operations of Coinbase called I.Vahi on May 11. The subject of the call? A meeting on May 15. The investigation reveals to us, however, that the presumed culprit confirmed his presence and then, to dash heading to India.
Always a good prince, he of course took care to warn his accomplices. May 16, Ishan Wahi and his brother are arrested. In total, these are 14 cryptocurrencies that were purchased in this way.
Coinbase claims its innocence against the SEC
In this case, the DRYalways lively when it comes to tapping the fingers of a cryptocurrency platform, decided to open in parallel an investigation against Coinbase. Indeed, the latter would not have respected theasset registration as a security. The exchange would therefore not have respected the anti-fraud laws essential for the DOJ.
This debate, which echoes the setbacks of the Ripple company and its XRP cryptocurrency, is deplored by Coinbase, which then takes the decision toopen a petition for the SEC to explicitly define a legal framework around cryptocurrencies:
” Cryptocurrencies represent the next wave of innovation within the markets themselves – and any country that encourages this innovation while keeping investors safe will reap huge rewards. We need the SEC to once again write the rules that will unleash the potential of US financial markets, this time fueled by the benefits provided by crypto.»
The Coinbase cryptocurrency platform thus deplores the lack of flexibility of traditional finance. The latter does not take into account the parameters and the Fundamental principles decentralized finance. Beyond the news item, this scam will ultimately only have an impact on the gaps in US regulation which, shared and indecisive, does not settle a clear legal framework for cryptocurrencies.
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