- In the US, an ex-employee of Coinbase is accused of insider trading.
- As a product manager, he was responsible for the inclusion of new cryptocurrencies in the offer of the Bitcoin exchange.
- The accused allegedly enriched himself, his brother and another suspect with $ 1.5 million by insider trading.
Coinbase is no longer getting out of the negative headlines. Now a former manager of the company is on trial in the United States for allegedly using his knowledge for insider trading.
Among other things, he was familiar with which crypto assets the exchange would take up next and presumably used this knowledge to stock up on the respective tokens in advance. According to a press release from the US Department of Justice, he is also said to have repeatedly given tips to his brother and an acquaintance.
The accused is accused of having made a total of $ 1.5 million in profit along with his brother on this way. The two brothers have now been arrested after the main accused tried unsuccessfully to flee the United States in May. The third suspect is still on the run.
Influencer takes over tracking
Probably the most remarkable detail is the fact that the influencer Jordan Fish, who is also known by the name “CryptoCobain”, uncovered the crime in April. In addition to a very successful presence on Twitter, he also hosts the popular Youtube podcast UpOnly.
He uncovered the activities of the suspects and shared his suspicions and results via social media. Accordingly, he found many suspicious transactions in which the corresponding tokens were always invested shortly before the listing on Coinbase. Since it was often ERC-20 tokens, the trail led again and again to the same Ethereum wallet.
Even then, it was obvious that the find was probably a form of insider trading. Now his discoveries are even part of the investigation against those accused of the crime.
SEC throws her hat in the ring
The US Securities and Exchange Commission (SEC) also wants to pluck a chicken with the defendants and declared 9 of the tokens to be securities without further ado. Thus, the supervisory authority promptly received criticism, because such an assessment essentially does not coincide with the previous criteria. Coinbase also rejected the representation.
But with this step, the authority can conveniently open another case against the accused directly, which is based on the US Securities Act. This gives the scandal a sideshow that could become relevant for the entire market in the future.
