For the first time ever, federal prosecutors in the US have officially brought charges against business executives for insider trading of cryptocurrency. Usually, these charges are leveled for using insider information to make decisions about stocks, but this time, the charges are related to trading on the blockchain. Manhattan prosecutors charged Ishan Wahi, a former Coinbase executive, and two others with wire fraud conspiracy and wire fraud, and the SEC accused them of insider trading.
According to the federal prosecutors, Wahi would let his brother, Nikhil Wahi, and his friend Sameer Ramini know when new tokens were going to be listed on the platform. The two would then buy a bunch of that cryptocurrency right before it was listed on the trading platform, and its value would go up. The government says the two made more than a million dollars this way.
Key comments:
Today’s charges are a further reminder that Web3 is not a law-free zone,” said US attorney for the southern district of New York, Damian Williams, in a press statement. “Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street.”
“Any illicit behavior is something we take super seriously. We have zero tolerance for it,” said Coinbase’s chief legal officer Paul Grewal. Coinbase said they put Wahi on unpaid administrative leave as soon as they caught wind of the trading scheme and fired him after an investigation.
