March 29, 2024

Former Coinbase Executive Arrested on Suspicion of Insider Trading

Former Coinbase Executive Arrested on Suspicion of Insider Trading

Former product manager of the cryptocurrency exchange Coinbase, Ishan Wahi, was arrested in the United States. He was accused ofinsider trading fraud, the Justice Department said.

According to the press release, law enforcement agencies also arrested his brother, Nikhil Wahi, and charged Sameer Ramani. All three face up to 20 years in prison.

“[The suspects] conspired towire fraud and a fraudulent insider trading scheme in crypto assets through the exploitation of confidential Coinbase information about a planned listing on the exchange,” the publication said.

The prosecutor's office noted that Ishana Vahi hadaccess to data related to the cryptocurrency listing process on the platform. In particular, he knew when the company intended to make relevant public announcements and open trading. 

According to investigators, in the period from June 2021 toApril 2022, a former employee of the exchange passed on this confidential information to his brother and Ramani at least 14 times. The latter, in turn, entered into transactions with the aim of making a profit.

“Having received advice from Ishan Waha, [otherssuspects] used anonymous Ethereum wallets to purchase cryptocurrencies shortly before Coinbase publicly announced plans to list or listed those assets on its platform. […] As a result of the insider trading scheme, they realized realized and unrealized profits totaling at least $1.5 million,” the press release states.

Investigators explained that in order to hide traces of criminal activity, the suspects used accounts on centralized exchanges that were registered to dummies. 

In April 2022, influencer Cobie discovered an address that had invested "hundreds of thousands of dollars" in tokens featured on the Coinbase Asset Listing 24 hours before it was published.

After that, Coinbase COOinvited Vahi to a “personal meeting,” the press release said. The latter confirmed his intention to appear, but the very next day he tried to flee the country - this was prevented by law enforcement officers who were already watching him. 

The US Securities and Exchange Commission also brought similar charges against the suspects. 

Recall that in May 2022, the analytical companyArgus reported that a group of unknown investors made significant profits using insider information about upcoming listings on the Binance, Coinbase and FTX cryptocurrency exchanges.

Read ForkLog bitcoin news in our Telegram - cryptocurrency news, courses and analytics.