US Authorities Detain Former Coinbase Employee For Insider Trading

Coinbase vs Sec

The latest update saw the US Securities and Exchange Commission (SEC) and prosecutors in the Southern District of New York arrest the leading crypto exchange’s ex-product manager. According to Bloomberg, Ishan Wahi who formerly worked at Coinbase as a product manager allegedly disclosed confidential token listing information on Coinbase to his brother and a friend — Nikhil Wahi, and Sameer Ramini, respectively.

Wahi reportedly provided illicit financial advice along with leaking insider information when he recommended his accomplices to conduct purchases for the tokens in the discussion.

However, according to Bloomberg’s insider sources, “the exchange operator wasn’t a focus of the probe and won’t face charges”. Additionally, both Wahi’s brother and the friend are subject to the regulators’ investigation given they ostensibly utilized the illicit financial advice to trade cryptocurrencies from June 2021 to April 2022, and made gains amounting to over $1 million.

SEC Arrests Ex Coinbase Employee While Battling Market Manipulation Accusations

On one hand, the SEC detained Wahi for leaking confidential token information. On the other hand, in the controversial XRP lawsuit, the former SEC Director of Corporate Finance, William Hinman along with other agency officials have been accused of illegal market manipulation to facilitate Ether and Bitcoin’s price hike, while crushing XRP’s growth with a lawsuit.

Last year, the corruption watchdog, Empower Oversight filed a Freedom of Information Act (FOIA) complaint against the SEC regarding Hinman’s 2018 speech which ascertained that Ether was not a security, that in turn shot the cryptocurrency’s price through the roof.

Following the document discovery from its FOIA charges, the corruption watchdog alleged that Hinman had Conflict-of-Interest, further ordering the commission to conduct a comprehensive review to confirm if Hinman’s bias led to SEC’s enforcement actions that selectively targeted some cryptocurrencies (XRP) while giving others a free pass (Ether).