🤡 Coinbase Employee Might Get 20 Years In Jail Time For Insider Trading
Not just him, his brother and his friend as well
howdy degens 🥱
Let’s admit it. We had better days. We had better months too. But hey, at least that sell-off pressure is gone. Well, at least for now. Yesterday, The Federal Reserve raised interest rates by three quarters of a percentage (0.75%) points. Inflation at its highest (9.1%) for the last 40 years. Definitely not great signs for the near future.
Maybe this is a signal. Crypto is the solution for it!
Well, not all crypto. There are players in the space like Coinbase who ruined the space more than they did favors to it. This will be our focus today. We’ll talk more on why Coinbase sucks!
If you have been around enough, you have noticed that our overall feeling about Coinbase has been similar in our end. It always sucked. Here are some of the previous newsletter we wrote about them which prove that.
Today, we will cover the famous insider trading that happened from a Coinbase employee.
If you have already read about it and you are familiar with the case, feel free to leave today’s class. Go enjoy the amazing weather out there.
So how did the story develop?
It all started with a tweet from Cobie back in April this year. He was able to identify an ETH address which bought crypto tokens 24 hours before they were getting listed in Coinbase.
His tweet comes right after Coinbase posted a blog post saying that they are increasing transparency for new asset listings. The irony!!
On the indictment from DoJ and FBI, they referred to Cobie’s tweet specifically which lead to this investigation and not because of Coinbase. Nice try Brian.
While this might be a good thing that this tweet helped identifying insider trading, it is definitely something we need to worry about. What if there was no Cobie or if Cobie decided not to share this info? Who would go after them?! Crypto police should bring knowledgeable people on their team ASAP.
On the other side, Brian Armstrong (Coinbase CEO) tried to be cute on a twitter thread saying that they were the ones who identified and started this investigation. What a joke.
Coinbase used to a place where only worthy tokens were listed. Then slowly, they noticed they were losing market share so they started listing shitty coins just to get back on track with the market share. Then they started listing almost anything. Of course, expanding your token listings like that comes with a cost.
Apparently, some employees were informed about the upcoming crypto coins which were about to get listed in Coinbase. They would buy it before getting listed, then prices would always pump after the listing and they would sell and benefit from the price pump.
There is another article we wrote about OpenSea employee who got involved in insider trading with NFTs if you are interested to learn more about it as well.
So, who did this?
Ishan Wahi, Product Manager in Coinbase who was responsible for listing the new crypto tokens on the exchange. In the indictment, there are three people got arrested. That because Ishan was sharing this information with his brother (Nikhil Wahi) and one of his friends (Sameer Ramani). Of course, Ishan booked a one way ticket to India the day he was supposed to be interviewed from Coinbase with the reason that he cannot attend due to some medical emergency, but Ishan got caught before leaving the country. The overall profit they made seems to be around $1.5 million.
Here are the charges in the indictment
ISHAN WAHI, 32, of Seattle, Washington, is charged with two counts of wire fraud conspiracy and two counts of wire fraud, each of which carries a maximum sentence of 20 years. NIKHIL WAHI, 26, of Seattle, Washington, is charged with one count of wire fraud conspiracy and one count of wire fraud, each of which carries a maximum sentence of 20 years. SAMEER RAMANI, 33, of Houston, Texas, is charged with one count of wire fraud conspiracy and one count of wire fraud, each of which carries a maximum sentence of 20 years.
Don’t get me wrong. They should be paying for this. I mean they traded based on insider information which is punishable by law.
But the issue here is beyond that. Ishan, his brother and his friend are just the collateral damage on this process. This issue has been ongoing for 18 months. Coinbase should be penalized and investigated to see what processes they had in place to avoid such situations. Insider trading has been a thing for a while, it is not new.
Here is the link to the Press Release if you want to read all the details.
Btw, we are still working on a guide ‘Steps To Become a Web3 Developer 📝’ and should be sending out soon. After we received hundreds of emails from people interested about the guide, we have decide it to expand it even further.
If you would be interested to promote your own course/material within our guide which will contain mostly free sources (6 slots only with paid promotions), reach out at us email@example.com 🤓.
That’s it. You are free to leave now.