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Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

justice.gov

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Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#121

Post by koolba »

zionic wrote: post #76
romellem wrote: post #16

Wow, 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 offic…

Wow, not that I would ever do anything like this… but if I was accused of such a thing the last thing I would do is book a flight for tomorrow .

Much better to drive across the border and then book a flight with a non-US airline.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#122

Post by tylersmith »

j0hnyl wrote: post #60
karpierz wrote: post #43

Earlier quoted context omitted.

By this same logic, fraud shouldn't be a crime. People will always find a way to profit by misleading people, and the most careful ones will reap the rewards and get away with it.

Who is the victim here?

Coinbase. It's in the indictment.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#123

Post by etothepii »

chollida1 wrote: post #108
giarc wrote: post #102

Earlier quoted context omitted.

What could they do though? Ask all employees to provide their personal wallet addresses then monitor that? Seems unlikely to happen.

I mean, this is exactly what happens when you work for a hedge fund. You have to provide statements for all trading accounts you and your immediate family own. So, yeah, this is exactly what coin base should be doing. They should require all employees to list all account addresses they have access to. It's a trivial ask for the employee and its trivial to scan

I worked for an investment bank for many years. We had to sign a declaration that we would not make trades of any kind without permission from compliance (the withholding of this permission in 2012 is why I am not a BitCoin millionaire). However, there was no requirement to hand over login details to brokerage accounts etc. I would be surprised if there was elsewhere.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#124

Post by googlryas »

stingraycharles wrote: post #47
est31 wrote: post #38

Note that they were charged for wire fraud and wire fraud conspiracy. So not for actual Section 10(b) violations, aka insider trading.

This may sound like a dumb question, but as a foreigner, I have no idea what wire fraud actually means, but I hear it pretty often. The explanation I found “Mail fraud and wire fraud are terms used to describe the use of a physical or electronic mail system to defraud another” doesn’t really help me further, other than it just being “fraud”. What would be the difference between insider trading and fraud, in this spec…

Insider trading is (roughly) specifically about using non-public corporate information to make money.

Fraud is generally about deceiving people. Wire fraud is specifically about deceiving people using telecommunications devices - imagine when telephones first became popular - a fraudster before had to go knock on every door, expose his face to the town, and possibly be driven out if people found out what he was doing. With telephones, the fraudster could sit in a loft in NYC and call thousands of people all over the country with their fraud, and there would be very little anyone could do to stop them.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#125

Post by duxup »

rmbyrro wrote: post #109
duxup wrote: post #100

Earlier quoted context omitted.

And yet the story is about a fraudster?

About a fraudster that was caught by a random person who could look at his fraud publicly, under the light of the sun. The part after "fraudster..." is what sets apart the blockchain and traditional financial networks, when it comes to fraud. If you commit fraud in the traditional financial system, only the financial institution has a chance to find it suspicious and tip the government agency responsible to investiga…

>is what sets apart the blockchain and traditional financial networks, when it comes to fraud

Are you telling me that fraudsters get caught on the blockchain more than other places?

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#126

Post by lawn »

danaos wrote: post #27

That is barely scratching the surface. I remember reports on reddit of people buying newly listed crypto assets in advance. That was in ~2016 and they didn't even try to hide.

Or how about Litecoin's creator who worked for Coinbase and lobbied for Litecoin to get added to the exchange?

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#127

Post by mellavora »

est31 wrote: post #38

Note that they were charged for wire fraud and wire fraud conspiracy. So not for actual Section 10(b) violations, aka insider trading.

I think Section 10(b) insider trading only applies to trading company-issued securities based on inside knowledge of events related to the company.

You can't "insider trade" FX, for example. Likewise, you cannot "insider trade" crypto.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#128

Post by spaceman_2020 »

vishnugupta wrote: post #56

It talks volumes about the internal controls at CB that it took a tweet to expose this. Given the speed with which they grew last two years I expect their financial and security processes to be next to nothing. This is just tip of an iceberg. Insiders would have made tens of millions over last two years of bull run, if not more. This dude just got greedy and unlucky to get caught just as the crypto bubble began burst…

Anyone who has used any leverage trading on any exchange knows that the exchange has visibility into your positions and will run your stops.

Open secret in the industry.

Unregulated markets promote all sorts of bad actors. And since the returns are wild anyway, everyone just accepts it.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#130

Post by aaaaaaaaaaab »

WJW wrote: post #30
misiti3780 wrote: post #21

I'm surprised they were table to track the laundering, given it sounds like they used a lot of different wallets.

I wonder how many wallets you would need before it becomes a problem to track. I would guess in the millions or more since graph algorithms are pretty efficient these days.

How long of a linked list do you need to be unable to reach its tail?
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