The first criminal case was opened in the United States in the case of insider trading in cryptocurrency

The United States is suing for alleged cryptocurrency insider trading, a first for a country that intends to lead by example.

The US authorities continue to crack down on insider trading in digital assets. The New York Times reports that the City of New York has filed criminal charges against three people for wire fraud in connection with insider trading in cryptocurrencies. In particular, the former employee of the Coinbase exchange Ishan Wahi is accused. This is the first time that U.S. authorities are initiating proceedings at this level regarding insider trading in digital currencies, according to U.S. Attorney for the Southern District of New York Damian Williams.

U.S. Files Criminal Lawsuit Over Alleged Crypto Insider Trading

As in the civil case brought by the Securities and Exchange Commission (SEC), plaintiffs accuse Ishan Wahi of exchanging confidential information about future asset announcements with his brother Nikhil Wahi and his brother’s friend Summer Ramani. Data shared “at least” between June 2021 and April 2022 would help Nikhil and his friend buy the assets before these announcements increase their value. The two accomplices would then sell their assets to make a significant profit. Purchasing 25 or more assets would net more than $1.1 million, according to the SEC.

Last April, Coinbase launched an internal investigation in response to a Twitter post about unusual trading activity. Ishan Wahi booked a flight to India before Coinbase could interview him, but most recently he and his brother were arrested in Seattle. According to the SEC, Summer Ramani is still at large, presumably in India.

For the first time for a country that intends to lead by example

The lawyers continue to maintain their client’s innocence and explain that he was going to “vigorously” defend his case. A lawyer for Summer Ramani and brother Ishan Wahi did not comment on the allegations. Coinbase said it turned over its information to the Justice Department and fired Ishan Wahi as part of its “zero tolerance” policy for such behavior.

It’s not the biggest deal of its kind. Lending firm BlockFi recently paid out $100 million in damages for a possible violation of the same rules. Telegram paid $1.2 billion to investors for similar violations, in addition to paying $18.5 million. At the same time, this criminal case is more of a preventive character. The government wants to make it clear that fraud is illegal, whether it happens “on the blockchain or on Wall Street,” as Damian Williams explained to the New York Times. This is more to deter potential scammers in the future than to punish these three defendants.

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