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Arthur T Knackerbracket has processed the following story:

The U.S. Department of Justice has charged a former Coinbase manager and two co-conspirators with wire fraud conspiracy and scheme to commit insider trading in cryptocurrency assets.

This is the first case of its kind in litigation history and a signal that those performing cryptocurrency and NFT fraud will be targeted by law enforcement.

Coinbase is an American cryptocurrency exchange platform with almost 90 million registered users and a revenue of $7.84 billion (2021).

Defendant Ishan Wahi, who worked as a product manager for the company, is accused of abusing his position and insider knowledge to make cryptocurrency investments that were almost guaranteed to rise in price.

“Although the allegations in this case relate to transactions made in a crypto exchange – rather than a more traditional financial market – they still constitute insider trading,” commented FBI’s Assistant Director, Michael J. Driscoll.

[...] Coinbase periodically adds new crypto assets on its platform to provide its users with fresh investment opportunities.

The value of these coins and tokens typically increases when a large platform like Coinbase makes them available for purchase, so those investing in them before the event are set to make a profit.

Ishan Wahi knew when Coinbase was planning to add new cryptocurrency assets before the company announced it publicly, so he coordinated with his co-conspirators to purchase large amounts in advance.

[...] “Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street.  And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them,” warned U.S. Attorney Damian Williams.

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