Former Coinbase executive arrested on suspicion of insider trading

In the United States, a former Coinbase product manager, Ishan Vahi, was arrested. He was charged with fraud involving insider trading, сообщило the Department of Justice.

According to the press release, authorities also arrested his brother — Nikhil Vahi — and charged Samir Ramani. All three face up to 20 years in prison.

“[The suspects] conspired to commit fraud using electronic communications and fraud with the insider trading scheme of crypto assets by using Coinbase’s confidential information about a planned listing on an exchange,” the release says.

According to prosecutors, Ishan Vahi had access to data related to the listing process on the platform. In particular, he knew when the company planned to make the relevant public statements and to open trading.

According to investigators, from June 2021 to April 2022 the former employee allegedly passed this confidential information to his brother and Ramani at least 14 times. The latter, in turn, executed trades to profit.

“Following guidance from Ishan Vahi, [the other suspects] used anonymous Ethereum wallets to acquire cryptocurrencies shortly before Coinbase publicly announced the listings or listed these assets on its platform. … As a result of the insider trading scheme they obtained realized and unrealized profits totaling at least $1.5 million,” the press release states.

Investigators explained that to conceal the trail of their wrongdoing, the suspects used accounts on centralized exchanges that were registered to front persons.

In April 2022, influencer Cobie spotted an address that had put “hundreds of thousands of dollars” into tokens listed in Coinbase Asset Listing, 24 hours before its publication.

Story for the ages pic.twitter.com/oMlr8FM70d

— Cobie (@cobie) July 21, 2022

Subsequently, Coinbase’s Chief Operating Officer invited Vahi to a “private meeting,” according to the press release. He confirmed his intent to attend, but the very next day attempted to flee the country — an attempt thwarted by law enforcement officers who had been watching him.

The U.S. Securities and Exchange Commission also filed similar charges against the defendants.

In May 2022, the Argus analytics firm reported that a group of unidentified investors earned substantial profits using insider information about upcoming listings on crypto exchanges Binance, Coinbase and FTX.

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