WASHINGTON: US authorities on Thursday charged and arrested a former employee of a major digital exchange in what they called the first-ever cryptocurrency insider trading case.
The Justice Department charged former Coinbase product manager Ishan Wahi, saying he released confidential information about coming listings to his brother Nikhil Wahi, and friend Sameer Ramani, who also were charged in the scheme alleged to be worth $1.5 million.
US Attorney Damian Williams said the case shows the digital assets space “is not a law-free zone.”
“Just last month, I announced the first ever insider trading case involving NFTs (non-fungible tokens), and today I announce the first ever insider trading case involving cryptocurrency markets,” he said in a statement.
“Fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street,” Williams added.
Ishan Wahi had access to confidential information about when new assets would be listed by Coinbase, and tipped off his brother and friend allowing them to make illegal trades in at least 25 different crypto assets, the statement said.
They allegedly used multiple anonymous Ethereum blockchain wallets to conceal their activity.
When a post on Twitter alerted about trading ahead of a listing in April, Coinbase began investigating.
When called in for a meeting in May, Ishan Wahi, 32, of Seattle, attempted to flee the country, buying a one-way ticket to India, the Justice Department said.
The Securities and Exchange Commission also charged the three men with insider trading.