Following reports that the employee had engaged in embezzlement and cleared along classified material to his compadres about which coins would be listed on the exchange in the future, the Department of Justice (DOJ) has arrested a former Coinbase personnel along with two of his brothers in arms. The arrests were made following revelations that the employed person had operated insider trading.
An individual who worked with Coinbase has been taken into custody.
Ishan Wahi, the man who once worked for Coinbase and left the company, was a member of the group that was responsible for listing assets on the trading platform. The information that he gathered as a result of his position was given to his brother, Nikhil Wahi, as well as to Sammer Ramani, a friend of his brother’s. It is thought that the three persons were able to acquire as much as $1.5 million in digital asset funds as a result of the operation, which involved insider trading that took place for around 10 months.
This knowledge was put to use in the process of acquiring the assets prior to Coinbase’s publication of their listings. The individuals made the purchase of the coins in the knowledge that the prices would rise as soon as the assets were assigned positions on the cryptocurrency exchange. They were able to watch their reserves grow on a consistent basis as the coins were loaded onto the Coinbase train. After the price spikes, the men would sell their possessions for a substantial profit in order to fund their lifestyles.
After completing an internal inquiry in April, executives at the exchange were the first ones to hear about the insider trading that had taken place. In a recent statement, the CEO of Coinbase, Brian Armstrong, indicated that he had provided the Justice Department with information regarding Mr. Wahi’s behavior and that Mr. Wahi’s employment with the business had been terminated. It was mentioned that:
When we discover that one of our employees has engaged in inappropriate behavior of any kind, we shall not hold back from taking disciplinary action against that employee without exception.
According to Damian Williams, the United States attorney for the Southern District of New York, this is the first time that illegal actors operating in the digital currency industry have been charged with insider trading. Williams believes this is because the charges have never been brought before. During the interview, he elaborated as follows:
With these accusations, we want to make it quite apparent that fraud is fraud, regardless of where it takes place—on the blockchain or Wall Street.
Additional misfortune for the Exchange
Ishan had booked a travel to India prior to being questioned by the corporation as part of their inquiry, and it is likely that he was intending to flee the country in order to avoid being apprehended. Later, he and his brother were taken into custody in Seattle, Washington, but Ramani managed to elude capture and is still at large. Although he is recorded as living in Houston, Texas, it is generally accepted that he has relocated to India.
Given that Coinbase has been at the center of a significant issue over the course of the last few months, the article that centers on the firm does not play well for the organization. Things ultimately took a dramatic turn for the worst for the digital currency platform when it stated that it was going to impose a hiring freeze owing to the continued volatility and market speculation of the cryptocurrency field. This was the cause of the shift. Because of this, Coinbase finally had to conduct a series of layoffs, which resulted in the company losing approximately 18 percent of its workforce.