Feds Charge Three People In First-Ever Cryptocurrency Insider Trading Case

Welp, it’s happened. United States prosecutors have officially charged three individuals with wire fraud in the country’s first-ever cryptocurrency insider trading case. 

One of the accused, a former product manager at Coinbase Global, had allegedly worked with his brother and friend to share confidential information about forthcoming cryptocurrency launches, using Ethereum wallets to buy and sell at least 25 assets for a profit of US$1.5 million. 

According to Reuters, while he claimed to be “innocent of all wrongdoing,” the main culprit had attempted to flee to India after a security director at the cryptocurrency exchange had summoned him for a meeting, though officials eventually barred from boarding the flight.

While charges have been filed, the US Securities and Exchange Commission (SEC) noted that the investigation was still ongoing, and has yet to decide if Coinbase will face action for listing the tokens that were deemed as securities. 

“Today’s charges are a further reminder than 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,” said US Attorney Damian Williams.

“Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them.”

[via Reuters and United States Department of Justice, cover image via Manassanant Pamai | Dreamstime.com]