One perk of a public blockchain is that crimes like these are more transparent! A Twitter user 'discovered' the fraud a few months ago:
Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
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Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#12Thought this was a repost of the DOJ charges last month against the former product manager who knew about NFT listings [0], but that was OpenSea. I guess this Coinbase incident technically counts as "First Ever Cryptocurrency Insider Trading" scheme, even though it's common to conflate "crypto" with NFTs and coins these days
[0] "Former OpenSea employee charged in digital asset insider trading scheme " https://news.ycombinator.com/item?id=31584937
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#13Hmm. Is this actually "insider" knowledge? I personally question the validity of this charge. This employee had knowledge of what COINBASE was going to do with the currency (ie, list it). He had no fiduciary responsibility as pertaining to the coin itself. This is like knowing that Warren Buffer is going to say good thing about Microsoft tomorrow, and buying it today as a result (expecting it to rise). Is that actual…
It's not confirmed to be illegal until they get a conviction. So we will find out! It will be an interesting case. I'd wager they do get convicted but we'll see.
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#14Earlier quoted context omitted.
He goofed. Should have left the country far before. And was found out only after a random twitter account did correlations How much more crypto employees are getting away with it?
Which Twitter account was it?
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#15>On May 11, 2022, Coinbase’s director of security operations emailed ISHAN WAHI to inform him that he should appear for an in-person meeting relating to Coinbase’s asset listing process at Coinbase’s Seattle, Washington office on Monday, May 16, 2022. ISHAN WAHI confirmed he would attend the meeting. Anyone know why Coinbase would set up this meeting if they knew it was him? Was it a bluff to see if he'd flee? Or wer…
I know a lot of local police like to go into homes with guns blazing, but the smart cops would much rather set someone up outside of their home where they're less likely to be armed and bunkered.
If I were a cop arresting somebody in their home would be my worst case scenario IMO.
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#16Wow, the indictment references [this tweet][1] that caused Coinbase to investigate the matter and ultimately led the defendant in being caught at the airport before trying to leave the country.
> On May 11, 2022, Coinbase’s director of security operations emailed ISHAN WAHI to inform him that he should appear for an in-person meeting relating to Coinbase’s asset listing process at Coinbase’s Seattle, Washington office on Monday, May 16, 2022. ISHAN WAHI confirmed he would attend the meeting.
> On the evening of Sunday, May 15, 2022, ISHAN WAHI purchased a one-way flight to India that was scheduled to depart the next day shortly before ISHAN WAHI was supposed to be interviewed by Coinbase. […] Prior to boarding the May 16, 2022 flight to India, ISHAN WAHI was stopped by law enforcement and prevented from leaving the country.
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#17Hmm. Is this actually "insider" knowledge? I personally question the validity of this charge. This employee had knowledge of what COINBASE was going to do with the currency (ie, list it). He had no fiduciary responsibility as pertaining to the coin itself. This is like knowing that Warren Buffer is going to say good thing about Microsoft tomorrow, and buying it today as a result (expecting it to rise). Is that actual…
You need to remember that Coinbase is a regulated entity like other financial institutions and TFA clearly mentions that the insider was part of a small set of employees that had access to info that the rest of the employees did not have access to:
> Beginning at least in August 2021 and continuing through May 2022, ISHAN WAHI was a member of a private Coinbase messaging channel reserved for a small number of Coinbase employees with direct involvement in the Coinbase asset listing process. The private channel was used to discuss, among other things, “exact announcement / launch dates + timelines” that Coinbase did not wish to share with all of its employees.
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#18Earlier quoted context omitted.
750k is a lot of money.
Sure, but $7.5m is more money, and seems achievable. Dogecoin spiked 6% after its Coinbase listing announcement and Binance offers 50x leverage. And Coinbase listed 83 different things in 2021.
The bigger the amount the more likely someone will notice.
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#19There's been a lot of shakedowns and refurnishings in the crypto landscape lately. The US seems to catch or point fingers at people left and right. Why is this happening now all of a sudden?
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#20Hmm. Is this actually "insider" knowledge? I personally question the validity of this charge. This employee had knowledge of what COINBASE was going to do with the currency (ie, list it). He had no fiduciary responsibility as pertaining to the coin itself. This is like knowing that Warren Buffer is going to say good thing about Microsoft tomorrow, and buying it today as a result (expecting it to rise). Is that actual…
If your knowledge is privileged an non public, and might reasonably impact share prices either way, yes it is illegal. Not a lawyer, but your Buffet example above would be something I'd either run through compliance before traiding or I just wouldn't trade at all before said whatever he planned to say.
Source: Countless of SOX-mandatory insider trading trainings and falling under rules covering restricted traiding windows at US listed companies.