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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

#51

Post by alasdair_ »

seanhunter wrote: post #25
bpodgursky wrote: post #7

Hmm. 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…

Your Warren Buffet example would absolutely be illegal. Trading on the basis of material non-public price-sensitive information or tipping someone off so they trade is market abuse (ie illegal) in Europe. In the US, the rules are a little more complex but basically yes it is illegal (if that's what he did). You absolutely don't have to have fiduciary responsibility, and you don't have to be an official insider, you s…

> Your Warren Buffet example would absolutely be illegal.

My understanding is that it very much depends upon how the information was obtained. If I, as a third party, overhear Warren talking in a restaurant, that’s very different from hearing it during a Berkshire board meeting.

Of course, everything, everywhere, is securities fraud. https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...

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

#52

Post by ianhawes »

daenz wrote: post #8

>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 doubt that Coinbase would want to arrest this person at their offices. I'm sure that the plan was to question the suspect with the FBI present. If the FBI asks a question, and you lie, it's a felony. If your employer asks you a question and you lie, it's legal.

Either way, this was a ruse to get WAHI to start talking. Likely they would execute a search warrant at his residence after he left to appear in-person.

As an FYI, people under investigation by federal authorities are added to a database that alerts agents to the purchase of any flight tickets (domestic or international). Unfortunately for the suspect this means he will undoubtedly be detained until his trial in several years.

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

#53

Post by iso1631 »

seanhunter wrote: post #25
bpodgursky wrote: post #7

Hmm. 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…

Your Warren Buffet example would absolutely be illegal. Trading on the basis of material non-public price-sensitive information or tipping someone off so they trade is market abuse (ie illegal) in Europe. In the US, the rules are a little more complex but basically yes it is illegal (if that's what he did). You absolutely don't have to have fiduciary responsibility, and you don't have to be an official insider, you s…

If Joe Bloggs ran the autocue screen and got an advance copy of the speech, would it be illegal?

What if he overheard Buffet practicing his speech and bought it - would that be illegal?

If he were to tweet "I Joe Bloggs heard Buffett saying he is about to say something good about Microsoft" and then buy a few seconds later, would that be public information?

When does public information change from being private information to being public information nobody has noticed?

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

#54

Post by greenthrow »

modeless wrote: post #22
greenthrow wrote: post #18

Earlier quoted context omitted.

The bigger the amount the more likely someone will notice.

I doubt these guys were that afraid of law enforcement because nobody thought insider trading laws applied to crypto markets at the time. I guess they could be afraid that their source would get fired, but if you've already made 20x his salary then getting fired doesn't seem like a huge problem.

They could have just been scared of getting in trouble at work. Who knows.

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

#55

Post by biometry-woof »

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…

The irony here is that the linked Twitter account made his money by coordinating pump and dumps back in the day, before he rebranded into this entity.

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

#56

Post by vishnugupta »

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 bursting.

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

#57

Post by endisneigh »

c7DJTLrn wrote: post #40

Unpopular opinion incoming: the concept of insider trading is stupid, and even more stupid applied to cryptocurrency. People will always find ways to profit from privileged information. The least careful ones will just keep getting caught while the most careful reap the rewards and get away with it. Cryptocurrency isn't even a regulated asset, how can someone be 'insider trading' it? What insider trading really means…

This logic is dumb. Scams also should be legal I guess? As well as theft.

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

#58

Post by skidd0 »

karpierz wrote: post #43
c7DJTLrn wrote: post #40

Unpopular opinion incoming: the concept of insider trading is stupid, and even more stupid applied to cryptocurrency. People will always find ways to profit from privileged information. The least careful ones will just keep getting caught while the most careful reap the rewards and get away with it. Cryptocurrency isn't even a regulated asset, how can someone be 'insider trading' it? What insider trading really means…

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.

Knowing privileged info and acting on it as an individual is not he same as intentionally misleading another person.

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

#60

Post by j0hnyl »

karpierz wrote: post #43
c7DJTLrn wrote: post #40

Unpopular opinion incoming: the concept of insider trading is stupid, and even more stupid applied to cryptocurrency. People will always find ways to profit from privileged information. The least careful ones will just keep getting caught while the most careful reap the rewards and get away with it. Cryptocurrency isn't even a regulated asset, how can someone be 'insider trading' it? What insider trading really means…

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?
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