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Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
- nus07 4y agoCurious about what would have happened had the protagonist managed to board the flight to India and get there ? Would the SEC and Coinbase been able to extradite or do anything then ?
- zerkten 4y agoThe US and India have an extradition treaty (https://www.state.gov/wp-content/uploads/2019/02/12873-India-Law-Enforcement-Extradition-6.25.1997.pdf https://www.state.gov/wp-content/uploads/2019/02/12873-India...).
- walrus01 4y agoI would rate the chances of an Indian (or Pakistani, or Bangladeshi) national being able to evade capture domestically in their home country in south asia as quite high. In either country you can exist entirely in a cash-based economy with no digital records of your actual identity linked to any transactions or accounts if you put a bit of effort and thought into it. Unless the fugitive was high enough profile that it would cause the US to really put pressure on the relevant local government to search out and capture them.
- codegeek 4y ago"cash-based economy with no digital records of your actual identity linked to any transactions or accounts" Not that easy in India anymore for last few years with thinks like Aadhar/PAN card and almost every bank requiring those. Even small time vendors prefer payment using phone apps these days in India.
- walrus01 4y agoIf someone had cooperative family members that could withdraw cash banknotes from their own accounts it would definitely be a lot easier. have also seen a large number of reports of how easy it is to get a fraudulent aadhar card under a fake name, using fabricated paper documents as origins of identity, so that's a possible route I think the likelihood of this working would also be much higher if someone relocated to a very rural location where the local economy is much more cash based. (eg: if you're from manipur, go find a medium sized town in the hills and don't draw any attention to yourself)
- lebed2045 4y agothere's billion dollar telephone scam industry. How many of these criminals were ever prosecuted or get extradited to US?
- elteto 4y agoFirst ever?
- ffggvv 4y agodidn't the guy who founded litecoin and worked at CB in the early days do the same?
- modeless 4y agoThe amounts in these insider trading schemes always seem small to me. $750k per person? If I had advance knowledge of all Coinbase listing announcements I'm pretty sure I could make more than that!
- notch656a 4y agoI mean one of the dudes was flying to india. 750k is probably enough to buy some rural property there and live the rest of your life off interest. The less money, the less radar signature.
- anewpersonality 4y agoHe goofed. Should have left the country far before. And was found out only after a random twitter account did correlations How much more crypto employees are getting away with it?
- ayewo 4y agoWhich Twitter account was it?
- mikeyouse 4y agohttps://twitter.com/cobie/status/1513874972552355846 https://twitter.com/cobie/status/1513874972552355846
- TechBro8615 4y agoI appreciate how the top reply to that Tweet is an animated GIF of Speaker Pelosi rubbing her hands together. Note: Speaker Pelosi has not been arrested for insider trading
- anewpersonality 4y agoSpeaker Pelosi's insider trades are a parliamentary privilege!
- bpodgursky 4y agoHmm. 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 actually illegal?
- modeless 4y agoIt's not confirmed to be illegal until they get a conviction. So we will find out! It will be an interesting case. I'd wager they do get convicted but we'll see.
- gizmo686 4y agoThere are two seperate questions: 1) Do the alledged facts meet the legal requirements for the crimes charged? 2) Are the alledged facts true? A trial is focused on question 2. A jury is called on to make a determination of the facts of the case, they will be instructed on what is/isn't illegal and not expected to make any decision regarding questions of law. Question 1 can be answered in summary judgment before you ever call a jury. Question 1 can also be answered through the appeals process long after a guilty verdict is given.
- toolz 4y agoA jury can decide if something _should_ be illegal and base their verdict on that. Meaning that the jury is also considering point 1 and whether this specific case should be illegal, regardless of how clear the law is on the subject.
- skc 4y agoDoes the fact that he tried to flee have any bearing on this or can it plausibly be argued away is irrelevant?
- 4y ago
- daenz 4y ago>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 were they setting up the arrest to happen at the office? Couldn't they just have arrested him in his home?
- notch656a 4y agoI know a lot of local police like to go into homes with guns blazing, but the smart cops would much rather set someone up outside of their home where they're less likely to be armed and bunkered. If I were a cop arresting somebody in their home would be my worst case scenario IMO.
- Scoundreller 4y agoToronto cops are definitely the dumb kind: went to execute a search warrant on a gunsmith while he was in his gun workshop and, whodathunkit, the gunsmith reached for a (non-operational) gun! https://www.cbc.ca/news/canada/hamilton/rodger-kotanko-self-defence-siu-1.6371860 https://www.cbc.ca/news/canada/hamilton/rodger-kotanko-self-...
- ianhawes 4y agoI 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.
- mikeyouse 4y agoOne perk of a public blockchain is that crimes like these are more transparent! A Twitter user 'discovered' the fraud a few months ago: https://twitter.com/cobie/status/1513874972552355846 https://twitter.com/cobie/status/1513874972552355846
- Ergo19 4y agoAs it turns out, a distributed immutable ledger is quite useful for investigators.
- koheripbal 4y agoMonero prevents all that. Nothing is publicly visible other than the data demonstrating that the transactions are valid.
- totony 4y agoUnless it has changed, that's not true. Monero obfuscate but does not hide (unlike zcash?)
- tempsy 4y agojust because it's available doesn't mean it's trivial to figure out. it does actually take effort to find something like this.
- capableweb 4y agoThat specific thing is kind of trivial to check though. Download the full chain, check which addresses has exactly the same list of tokens as the list was published by Coinbase, check which ones received the tokens shortly before it was announced.
- tempsy 4y agoyes true but you still have to be intentional about what it is you’re searching for.
- danso 4y agoThought this was a repost of the DOJ charges last month against the former product manager who knew about NFT listings [0], but that was OpenSea. I guess this Coinbase incident technically counts as "First Ever Cryptocurrency Insider Trading" scheme, even though it's common to conflate "crypto" with NFTs and coins these days [0] "Former OpenSea employee charged in digital asset insider trading scheme " https://news.ycombinator.com/item?id=31584937 https://news.ycombinator.com/item?id=31584937
- romellem 4y agoWow, 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 office on Monday, May 16, 2022. ISHAN WAHI confirmed he would attend the meeting. > On the evening of Sunday, May 15, 2022, ISHAN WAHI purchased a one-way flight to India that was scheduled to depart the next day shortly before ISHAN WAHI was supposed to be interviewed by Coinbase. […] Prior to boarding the May 16, 2022 flight to India, ISHAN WAHI was stopped by law enforcement and prevented from leaving the country. [1]: https://twitter.com/cobie/status/1513874972552355846 https://twitter.com/cobie/status/1513874972552355846
- tmp_anon_22 4y agoI wonder if the Tweet Account was fed info from someone in the accused's circle who didn't get their cut.
- askmike 4y agoCoinbase shady stuff around listings has been an open secret in crypto, everyone knows about it. Dates all the way back to LTC listing and probably earlier.
- biometry-woof 4y agoThe 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.
- ZephyrBlu 4y agoCobie used to co-ordinate pump and dumps?
- DSingularity 4y ago
- lizardactivist 4y agoThere's been a lot of shakedowns and refurnishings in the crypto landscape lately. The US seems to catch or point fingers at people left and right. Why is this happening now all of a sudden?
- nyokodo 4y ago> Why is this happening now all of a sudden? While the irrational exuberance is in full swing no one cares about fraud, they just want to keep the cash flowing. Once the crash starts that's when suddenly all that bad behavior gets put in the spotlight.
- nathanaldensr 4y agoWell, it has to happen at some point, right? Considering the fraud and scams are so blatant and obvious?
- jamiek88 4y agoThe wheels of government grind slowly but inevitably.
- wmf 4y agoYou're mixing two things. There has been a run of bankruptcies recently caused by the crypto price crash which itself was caused by macroeconomic factors. There has also been a slow but steady series of crypto enforcement actions over the last five years or so.
- misiti3780 4y agoI'm surprised they were table to track the laundering, given it sounds like they used a lot of different wallets.
- WJW 4y agoI 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.
- voakbasda 4y agoAnd there is the issue that what is inefficient today may become efficient tomorrow. The blockchain will be there waiting for new forensic techniques.
- aaaaaaaaaaab 4y agoHow long of a linked list do you need to be unable to reach its tail?
- mccorrinall 4y agoThere are exchanges which allow transactions from e.g bitcoin to monero. As soon as you’re on such a private chain, you most likely broke the link.
- WJW 4y agoI was thinking more along the lines of a directed graph where each of the wallets pass the funding received to multiple other wallets before the money finally converges to a destination wallet, it doesn't have to be a straight linked-list style line of wallets. In any case, the transaction costs alone probably makes this prohibitive for more than a few dozen wallets.
- kkielhofner 4y agoCompanies like Chainalysis and TRM have contracts with almost every federal law enforcement agency. They make this kind of analysis almost trivial.
- biggc 4y agoDidn’t a handful of Coinbase employees make out like bandits before Ethereum was listed? What’s changed since then?
- bhouston 4y agoPlease explain!
- tpxl 4y agoWhen a coin gets listed its price generally goes up.
- rvz 4y ago> Didn’t a handful of Coinbase employees make out like bandits before Ethereum was listed? I'm interested in this 'claim', Any source for that?
- O__________O 4y agoGiven the article explicitly covers the topic of an employee exploiting prior knowledge of what coins were going to be listed and when - clear the investigators were aware of the potential for this; if others were doing it, they must have done it in a way that was not obvious. If you have specific verifiable information, hire an attorney and use them to file a SEC whistleblower report. If your evidence leads to enforcement actions that are subject to their jurisdiction and the fines collected are over one million, you will anonymously get 10-30% of the fines they collect.
- Ave 4y agoYou might be thinking of Charlie Lee? Charlie Lee joined Coinbase, wash traded Litecoin [1] to give the appearance of wider interest and volume in order to get Litecoin listed on Coinbase, and promptly dumped all his bags at the peak. [1] https://i.redd.it/u9vhbxvr63t71.jpg https://i.redd.it/u9vhbxvr63t71.jpg
- anewpersonality 4y agoLet's admit the true problem of crypto is allowing sociopathic nerds to act as if they will not face consequences.
- danaos 4y agoThat 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.
- lawn 4y agoOr how about Litecoin's creator who worked for Coinbase and lobbied for Litecoin to get added to the exchange?
- jmoak3 4y agoYup! https://bitfinexed.medium.com/coinbase-insider-trading-litecoin-edition-be64ead3facc https://bitfinexed.medium.com/coinbase-insider-trading-litec...
- skylabmelody 4y agoWhy you keep spamming that link here? That twitter thread is built on a layer of conjectures with nothing tangible.
- jmoak3 4y agoI thought it was a good summary, and that people should see it. Have you read the CFTC's fines for Coinbase's wash trading between Litecoin/Bitcoin in 2016 to pump up volume? https://www.cftc.gov/PressRoom/PressReleases/8369-21 https://www.cftc.gov/PressRoom/PressReleases/8369-21 From the fine: >a former Coinbase employee used a manipulative or deceptive device by intentionally placing buy and sell orders in the Litecoin/Bitcoin trading pair on GDAX that matched each other as wash trades. This created the misleading appearance of liquidity and trading interest in Litecoin. Coinbase is therefore found to be vicariously liable as a principal for this employee’s conduct. I wouldn't be surprised if Jeff here is correct in his guess of who did this: https://twitter.com/jeffjohnroberts/status/1373054591160483843?lang=en https://twitter.com/jeffjohnroberts/status/13730545911604838... >According to the order, between January 2015 and September 2018, Coinbase recklessly delivered false, misleading, or inaccurate reports concerning transactions in digital assets, including Bitcoin, on the GDAX electronic trading platform it operated. During this period, Coinbase operated two automated trading programs, Hedger and Replicator, which generated orders that at times matched with one another. The GDAX Trading Rules specifically disclosed that Coinbase was trading on GDAX, but failed to disclose that Coinbase was operating more than one trading program and trading through multiple accounts.
- princevegeta89 4y agoOMG gimme a break, isn't crypto itself a huge insider-trading sort of market? Why is this such a big deal for Coinbase unless there are other intentions behind this arrest?
- fny 4y agoYes it is... which is why the hammer needs to come down and hard.
- toolz 4y agoThis is a value judgement. If you find crypto to be unfair, there's a very simple solution that doesn't require bringing in guys with guns to deal out punishment. You can simply just not participate. In an ideal world we could get rid of insider trading, but selectively punishing people just makes the problem worse and with so much of congress dominating the market I think it's quite clear the punishment is selective and itself incapable of being fair. It is much worse to give the illusion of fairness than to let people freely choose whether the "fairness" of some market is enough to justify participating. Of course, this is just my opinion.
- AlexandrB 4y ago> This is a value judgement. If you find crypto to be unfair, there's a very simple solution that doesn't require bringing in guys with guns to deal out punishment. You can simply just not participate. Ok. And I assume the welfare bills of crypto scam victims will be paid directly by crypto companies? What about hospital bills from attempted suicides? If you want crypto to be its own special island, fine, but you have to accept the costs of dealing with all the externalities.
- toolz 4y ago> but you have to accept the costs of dealing with all the externalities. cost benefit analysis seems rather simple to me. You either pretend you can govern money into a better place using vast amounts of precious resources, such as time and political capital of our central planners, or you celebrate that no one has reasonable expectations that crypto is a safe market and allow it to continue to be an unsafe market which will either die or sort itself out with market pressures. We're not talking about necessary resources like food land or shelter here. Crypto can live or die by its own merits and to pretend governing into the remarkably unfair landscape that is modern finance is worth the resources necessary, seems to me, to be easily dismissed as anything approaching reasonable. Crypto will very likely continue to get more governance, but that's not good or unexpected. It's just centralized power doing what centralized power does, which is expand its power and reach.
- est31 4y agoNote that they were charged for wire fraud and wire fraud conspiracy. So not for actual Section 10(b) violations, aka insider trading.
- stingraycharles 4y agoThis 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 specific case? Would it mean that someone basically enriched themselves with Coinbase without it being through trades (just to name an example, skimming rounding inaccuracies in your favor) ?
- mjburgess 4y agoThe federal government effectively needs "legal fictions" in order to prosecute at the state level. The way it prosecutes fraud here is by observing that it's over electronic wires which cross state lines.
- noughtme 4y agoUS authorities often don't have enough evidence to prosecute for the underlying crime, or it may have low penalties, but they often have the evidence to prosecute for mail fraud or wire fraud(basically any means of electronic communication). Mail/wire fraud are federal offences, so this also involves federal prosecutors and agencies with more resources, surveillance abilities, and higher penalties.
- projektfu 4y agoFraud can be a state or federal crime, "wire fraud" usually means it is at the federal level because of its use of interstate electronic communications. Mail fraud is similar. If you send someone a letter, you're using the US Mail system and thus are involving the federal level making it a federal crime. If you exclusively use a private interstate letter carrier (FedEx, for example), you are still committing mail fraud because the law was amended to cover that.
- c7DJTLrn 4y agoUnpopular 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 is a middle class person profiting in a way the ruling class don't like. Apparently it's legal for Congress to insider trade. It's legal for CEOs to insider trade.
- ouid 4y agotrading on information asymmetry is usually referred to as fraud. insider trading is just a subcategory that is relatively easy to prosecute and prevent
- karpierz 4y agoBy 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.
- skidd0 4y agoKnowing privileged info and acting on it as an individual is not he same as intentionally misleading another person.
- pavlov 4y agoIn a market that promises information symmetry, there’s no difference between the two.
- Dracophoenix 4y agoThat's incorrect. Due diligence is expected of any person who enters a contract. This forum was recently poopooing Musk for violating his purchase contract even though he may have had legitimate concerns of Twitter keeping secret its number of bot accounts. If you want to make the case that the ignorance of one party is sufficient to accuse the other of fraud, the burden of proof is on you.
- vishnugupta 4y agoIt 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.
- woodruffw 4y agoPrecisely. This was one actor; it beggars belief to expect that his is the only (much less largest) instance of insider trading at these firms.
- admn2 4y agoI was surprised to see the CSO replying to the tweet. I do agree with you, but do you think that was more for the PR and they knew about it or no way?
- pjc50 4y agoA lot of people suspect there's ""official"" insider trading at the exchanges; there's no reason for the exchange not to front-run orders or fake the order book if they think they can get away with it. Or trade against heavily leveraged positions to liquidate them. Or prop-trade with the customers' money.
- ChainOfFools 4y agoCrypto people love to talk about incentives when referring to things like crypto adoption by the market, or corrupt actions on the part of incumbent powers like bankers or politicians. They are much less enthusiastic about discussing incentives when it comes to things like exchange operatiors front running their clients, centralizing forces in crypto generally, etc.
- pcthrowaway 4y agoI work for a company that provides financial services to/on centralized exchanges, but none of us really like the centralization there; even if it's our bread and butter (for now) I think most "crypto people" are more excited about decentralized exchanges.
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- jrochkind1 4y agoI am shocked, shocked to find that gambling is going on in here!
- maerF0x0 4y agoWhat they did is definitely unethical, but I place at least some of the blame on the government themselves. How did "crypto" become a >$1T marketplace with so little legislation? Failures on multiple fronts of the US government.
- saos 4y ago> On the evening of Sunday, May 15, 2022, ISHAN WAHI purchased a one-way flight to India that was scheduled to depart the next day shortly before ISHAN WAHI was supposed to be interviewed by Coinbase. Prior to boarding the flight, ISHAN WAHI falsely told Coinbase employees that he had already departed for India when he had not. [...] Prior to boarding the May 16, 2022 flight to India, ISHAN WAHI was stopped by law enforcement and prevented from leaving the country. hahahah
- H8crilA 4y agoWhy are they being prosecuted? Those are not securities, or are they? "Wire fraud" implies that they defrauded someone by lying to their own advantage over a digital channel. Insider trading is generally legal for non-securities. EDIT: I am not implying that they shouldn't, on a moral level. They should! I am asking about legal technicalities, and about the state of law around those issues.
- MR4D 4y agoI have this same question. Crypto has not been defined as an asset category yet (and the SEC has not declared it to be a “security” so far). FTA - “. . . wire fraud conspiracy and wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets. . .” I’m presuming that it’s the fraud they are going after, and the “insider trading” aspect is verbal sugar. I can’t imagine that insider trading would ever apply to real estate or art, so not sure why it’s even mentioned here. IANAL, so perhaps someone wiser than me can add some clarity here?
- pirate787 4y agoFrom another angle, he defrauded Coinbase, through violating the terms of employment as part of the listing team.
- H8crilA 4y agoRight! That may be the answer.
- fallingknife 4y agoWouldn't that be a civil matter between him and Coinbase?
- JumpCrisscross 4y ago> Wouldn't that be a civil matter between him and Coinbase? It’s that, too. But fraud is a crime.
- kwertyoowiyop 4y agoCaptain Renault: “I'm shocked, shocked to find that gambling is going on in here!”
- tqi 4y agoA few hypotheticals I'm curious about: 1. If Coinbase itself had purchased a bunch of coins before listing on its own exchange, would that be illegal? 2. If the employee had purchased coins that were correlated with the ones that were listed, but not the specific ones that were listed, would that be illegal?
- pvarangot 4y agoWith 1. I think it depends on intent. For example when Tesla purchased BTC before announcing they were taking payments to have some liquidity on it for financial reasons or whatever, then it's ok. If you can prove they are front-running the market because for example right after announcing they are listing a coin they dump what they got before listing it then yeah maybe that's insider trading. The thing is if they take enough measures to prevent their employees from doing it. It's hard considering they can do it on another exchange, but at least on their own exchange my understanding is they should prevent their employees from trading if they have privileged information.
- 323 4y ago1. Unlikely, it's just investing. You are expected to gain from your investment, to promote it, etc. Like how companies buy and sell their own stock all the time and it's not considered insider trading. 2. Yes, since the fact that the coin was to be listed was inside information. You will be accused of insider trading if you trade correlated assets. Obviously there is a threshold somewhere, like if you have positive insider info on TSLA and you invest in a passive stock market index fund.
- Kukumber 4y agoSpring cleaning, about time! Unfortunately, it is too late for coinbase, their reputation took a massive hit, and this arrest came way too late The alternative to wallstreet, but with the same problems..
- iryntyis3 4y ago
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- bogota 4y agoAbout time this happened. It has been widely known for a long time. Crypto does not mean no regulations. Anyone who thinks that is likely a teenager who has not seen what happens to the average person when none exist.
- blocked_again 4y ago> As a result of the insider trading scheme, NIKHIL WAHI and RAMANI collectively generated realized and unrealized gains totaling at least approximately $1.5 million. Is this a joke? Seriously. I thought this case was about people inside trading hundreds of millions of dollars.
- pcwalton 4y agoYou expect to go to jail for being caught stealing $1,000 from a cash register. So you shouldn't be surprised when you go to jail for stealing $1,500,000 in cryptocurrency.
- smsm42 4y agoIt's nice that $1.5 million is pocket change to you, but it's still against the law to get even such as small - for you - sum by fraud, so SEC will prosecute it.
- bulbosaur123 4y agoCharged for what? There is no "insider trading" with cryptos, just as there isn't any with Forex, fiat currencies. He can't be charged, because there is no crime. No law prevents you to trade cryptocurrencies or fiat on insider knowledge. Might be unethical, but not illegal.
- tdhoot 4y agoThe article says Wire Fraud and Conspiracy.
- andrewljohnson 4y agoThere is actually no particular law against insider trading at all, not even related to equities… it’s all securities and wire fraud. https://www.bloomberg.com/opinion/articles/2022-06-02/don-t-insider-trade-nfts#xj4y7vzkg https://www.bloomberg.com/opinion/articles/2022-06-02/don-t-...
- dragonwriter 4y ago> There is actually no particular law against insider trading at all, not even related to equities… There actually is. See, well, a whole lot of 15 USC Chapter 2B [0], notably provisions like 15 USC Sec. 78p (prohibiting certain trades by corporate insiders, and creating civil liability of those conducting such trades to the issuer of the security thus traded) and 78u-1 (authorizing civil penalties by the SEC for insider trading made illegal by the Securities and Exchange Act.) What Bloomberg probably meant to say is that there is not a distinct crime of insider trading, but that illegal insider trading is generally also the crime of securities fraud. [0] https://www.law.cornell.edu/uscode/text/15/chapter-2B https://www.law.cornell.edu/uscode/text/15/chapter-2B
- jc_811 4y agoEverything Everywhere Is Securities Fraud: https://www.bloomberg.com/opinion/articles/2019-06-26/everything-everywhere-is-securities-fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
- choppaface 4y ago
- Tengiono 4y agoSoooooo people are slowly realizing that a regulated market might actually became regulated for a reason? I wouldn't mind all of this cryptoshit if it wouldn't be for the co2 and gpu/chip shortage...
- NelsonMinar 4y agoWhat is happening here? This link is to stacker.news, a HN-like website. It's for a story that is another active top story already on HN. Are folks just commenting on the headline without even clicking the link?
- kerblang 4y agoShould I give a link to the other one even though it's currently listed right under this story? Heck why not... occasionally the crypto discussions are intelligent... https://news.ycombinator.com/item?id=32180428 https://news.ycombinator.com/item?id=32180428
- jmoak3 4y agoThis is nothing new for Coinbase employees: https://bitfinexed.medium.com/coinbase-insider-trading-litecoin-edition-be64ead3facc https://bitfinexed.medium.com/coinbase-insider-trading-litec...
- skylabmelody 4y agoThat was a painful read. An "investigation" made by an anonymous twitter user based on cherry-picked tweets, hearsays and full of speculations. Many factual errors as well he didn't sell at all time high and the timeline doesn't match either. The claim regarding Litecoin increase and a supposed Bitfinex escape is made up as well.
- jmoak3 4y agoThis is nothing new for Coinbase employees: https://bitfinexed.medium.com/coinbase-insider-trading-litecoin-edition-be64ead3facc https://bitfinexed.medium.com/coinbase-insider-trading-litec... I recommend caution to crypto engineers - the world loves you when you make people rich, and the world might be willing to excuse shady behavior for a brief time. When things sour shady people will get what they deserve, and the metaphorical mob will come for their associates/companies.
- jmoak3 4y agoFollow up: https://www.cftc.gov/PressRoom/PressReleases/8369-21 https://www.cftc.gov/PressRoom/PressReleases/8369-21
- Asparagirl 4y agoThat mob is not so metaphorical... "Do Kwon, the founder of the cryptocurrency Luna and the stablecoin TerraUSD, has reportedly been in contact with police after a possible investor in the coin “trespassed” at his home, according to a new report from South Korea’s largest newspaper, The Chosun Ilbo. Crypto News reports the investor lost roughly $1.56 million in the collapse of Luna, a claim Gizmodo could not independently verify. An unnamed man rang the doorbell to Kwon’s apartment around 6:23 p.m. local time Thursday night, according to Chosun, and Kwon’s wife answered the door. The man reportedly asked something like, “Is your husband home?” and then proceeded to run off... The unnamed man who arrived at Kwon’s home faces a charge of trespassing because he allegedly entered the apartment complex by slipping through a gap in the apartment building’s common door, according to Chosun. CCTV footage from the incident and surrounding area is reportedly being reviewed..." https://gizmodo.com/luna-price-do-kwon-police-south-korea-home-apartment-bi-1848921120 https://gizmodo.com/luna-price-do-kwon-police-south-korea-ho... See also: the Mt. Gox protestors who staked out the company's headquarters in Tokyo, almost a decade ago: https://www.theverge.com/2014/2/19/5425220/protest-at-mt-gox-bitcoin-exchange-in-tokyo https://www.theverge.com/2014/2/19/5425220/protest-at-mt-gox...
- jqpabc123 4y agoI recommend caution to crypto engineers Fraud is everywhere in crypto but it has very little to do with *crypto engineers*. In other words, lots of *engineers* are bedazzled by blockchain but this isn't the source or the cause of most of the fraud. Blockchain is just an accounting system. As this example shows, there are lots of way to commit fraud outside of forging the books.
- paulpauper 4y agoHe shoud have just made fake Saylor and Musk youtube livestream videos instead . Those ppl make way more money and don't caught, hence why the scam will never go away.
- _5uxp 4y agohttps://news.ycombinator.com/item?id=30797879 https://news.ycombinator.com/item?id=30797879 I asked but now we get some details, lol
- paulpauper 4y agoHe should have just made those youtube livestream giveaway videos instead--the ones impersoning famous people like Michael Saylor and others. Those people make way more and no arrests.
- ourmandave 4y agoHopefully they're investigating Andreessen Horowitz (a16z) pump and dump business model. https://amycastor.com/2022/05/19/a16zs-state-of-crypto-report-a-rehash-of-bad-crypto-market-pitches/ https://amycastor.com/2022/05/19/a16zs-state-of-crypto-repor...
- nickff 4y agoWhy are you calling it "pump-and-dump"? Is there evidence of them dumping? The link just says that the author thinks a16z is wrong and likely engaging in motivated reasoning.
- nathias 4y agovery good, do politicians next
- nullc 4y agoLooks like the prosecution is actually over the use of coinbase's confidential information for personal profit. ... I suppose the DOJ is of the view that coinbase itself trading on this information was just fine.
- uncomputation 4y agoGreat example of how most of the fluff around decentralized finance being more fair just because it is public and “open” is naive at best and a wolf in sheep’s clothing at worst. They claim that regulated banks are a moral evil and “wouldn’t you want something neutral and open and transparent,” conveniently forgetting that this will always favor those with money to market, attract, and sell to potential “buyers” (scam victims, really). Especially with the use of bots and crypto’s rather insular and hype-driven community, it becomes dangerously easy to get tons of dumb money, almost entirely from people who are desperate enough to believe it.
- null0pointer 4y agoCoinbase is not decentralized finance, it's a centralized crypto bank. > the fluff around decentralized finance being more fair just because it is public and “open” is naive at best As another commenter pointed out, the investigation was triggered by this tweet [0]. How is that not more open and fair? If there wasn't a public record of the transactions, like in traditional finance, this guy would have likely gotten away with it. 0: https://twitter.com/cobie/status/1513874972552355846 https://twitter.com/cobie/status/1513874972552355846
- uncomputation 4y agoBecause there still exists informational asymmetry where the platform/exchange owners (and all employees privy to that information) still have material advantage over their customers but can now manipulate them easier than they can in traditional systems. With traditional systems, you have to purchase shares with your real name and thus regulators are able to detect patterns easier. In DeFi, these guys just spun up new anonymous wallets each time and if they were slightly better at it, they likely never would’ve been caught. Getting to parity of current insider trading detection in DeFi would require massive data analysis constantly keeping track of which wallets make suspiciously timed trades, leading to the same financial surveillance and de-anonymity DeFi wants to solve. One good tweet is not enough to validate the whole system.
- deleted 4y ago[deleted]
- runako 4y agoAm I reading the indictment correctly that they are actually being charged with defrauding Coinbase, and that they are not being directly charged with insider trading?
- derangedHorse 4y ago"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." Yeah from what I understand it seems like the charge comes from defrauding Coinbase
- deleted 4y ago[deleted]
- yayitswei 4y agoMoral judgements aside, how is what Ishan Wahi did legally different than Nancy Pelosi purchasing millions worth of Nvidia stock ahead of the CHIPS Act vote? Is it a private/public sector difference?
- VT_Dude 4y ago"Former Coinbase Employee First Ever Charged in Crypto Insider Trading Scheme" There, headline fixed, first changed maybe, first committed no way. Also, how quickly we forget about Magical Tux. Or is it not insider trading if you're on both sides of the trade?
- maerF0x0 4y ago> (including interstate wire communications sent from ISHAN WAHI to a fellow Coinbase employee located in Manhattan, New York) This is an interesting side effect of our remote workplace culture. It used to be that if you committed a crime physically in the workplace, I presume it would not be an interstate crime. However, now you likely are required to work with people all over the place so the laws are all escalated (as i understand it typically interstate law is more punishing).
- thomasjudge 4y agoI don't think interstate really matters to wire fraud charges
- andrew-jack 4y ago
- superzamp 4y agoHey what's up with your comment being almost verbatim this one https://news.ycombinator.com/reply?id=32184233&goto=item%3Fid%3D32180428%2332184233 https://news.ycombinator.com/reply?id=32184233&goto=item%3Fi...
- vultour 4y agoIt's a bot that rewords other comments.
- shawabawa3 4y agoBut Coinbase isn't "decentralised finance" Uniswap doesn't have any insider trading because all asset listings are public including discussions about which assets to list
- PointyFluff 4y agoCool, DOJ. Now do Trump and his fellow traitors.
- chaosbolt 4y agoHe's just a scapegoat, it's been going on for years and you can easily verify it, just check when any coin/token has been listed on Coinbase (the twitter announcement, from the Coinbase pro account since that's where they usually got listed first), then check the price for that time period, the price usually starts increasing a week before. Add this to them blocking withdrawals for assets whenever these assets start pumping on other exchanges and lots of people try to withdraw at the same time, and multiple other shady practices most exchanges do (but not all, for example Kraken has been decent for quite some time and are one of the few exchanges that are pro transparency when it comes to their reserves) and you get yourself Finance 2.0, where the few are allowed to prey on the many, and you can't compete with the few (for example when Arthur Hayes was kicked out and replaced by Sam Bankman Fried).