Ex-Coinbase Product Manager Charged With Insider Trading
On Thursday, the Southern District of New York announced the unsealing of an Indictment charging a former product manager at Coinbase, along with his brother and close friend, with wire fraud conspiracy and wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information about which crypto assets were scheduled to be listed on Coinbase’s exchanges.
U.S. Attorney Damian Williams said: “Today’s charges are a further reminder that Web3 is not a law-free zone. Just last month, I announced the first-ever insider trading case involving NFTs, and today I announce the first-ever insider trading case involving cryptocurrency markets. Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them.”
News initially broke months ago when Cobie (@cryptocobain), co-host of the extremely popular crypto podcast UpOnly, exposed the insider trading scheme on Twitter.
CEO of @coinbase, Brian Armstrong, tweeted, “At Coinbase, we actively monitor for illegal activity and investigate any alleged misconduct. In April, we received information about the possible frontrunning of assets shortly before being listed on Coinbase. We immediately launched an investigation into this. As a result of our investigation, we identified three suspects and provided this information to law enforcement. One person was a Coinbase employee who we terminated.” He went on to say, “This is a great reminder for everyone in crypto, and at Coinbase, that frontrunning is illegal and erodes trust. We will investigate and refer bad actors to law enforcement, and they will face real legal consequences, including serving prison time.”
This isn’t the first time we have seen insider trading at a major web3 organization and surely won’t be the last. Let us know your thoughts below.