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Accused of insider trading Coinbase official tries to flee the country

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Ishan Wahi, manager of cryptocurrency exchange platform Coinbase, was arrested on Thursday, July 21 while trying to leave the country. On charges of insider trading, he was fired from his company on July 15.

These allegations come after a joint investigation by the Southern District of New York and the Securities and Exchange Commission (SEC). Ishan Wahi reportedly gave his brother and friend early access to information about cryptocurrency exchanges. Thanks to these somewhat overly enlightened “tips”, they were able to buy certain cryptocurrencies before they were listed on the platform. Thus, they made a profit of more than $1 million over the period from at least June 2020 to April 2022, according to Bloomberg in the article.

Coinbase is a platform that allows you to exchange over 150 cryptocurrencies, many of which have been added in recent months. Because the platform is known, currencies may experience a sudden price spike immediately after being listed on exchanges. “Coinbase takes allegations of misuse of company information very seriously, as our quick investigation into the matter shows. Again, we have zero tolerance for this type of misconduct and will not hesitate to take action against any employee when we discover violations,” Coinbase CEO and co-founder Brian Armstrong said in a blog post on the case.

Ishan Wahi was arrested at the airport. He bought a one-way ticket to New Delhi hours before he was called for an interview as part of a Coinbase survey. Many personal items were found on him, which may indicate that he did not intend to return immediately, as he said. According to prosecutors, this is the first criminal case of its kind that is being processed. As for the prosecution of the two men, this is “just the beginning of the repression.” [du ministère de la Justice] against insider trading in the crypto space,” former Justice Department Attorney Ian McGinley told The New York Times.

“Today’s allegations are yet another reminder that Web3 is not a lawless zone,” Manhattan-based U.S. Attorney Damian Williams said in a statement quoted by Bloomberg. “Our message with these allegations is clear: fraud is fraud, whether it happens on the blockchain or on Wall Street.” This arrest comes in an already tense environment for the company following the weakening of cryptocurrencies. Coinbase announced the layoff of more than 1,000 employees last month.

Priya Chaudhry, the lawyer for the defendant, defends this as follows: “These prosecutors are trying to criminalize innocent behavior because they are looking for a scapegoat because so many people recently lost money in cryptocurrencies. The government is embarrassed and the arrest of Nikhil Wahi is a reflex reaction to save face.”

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