The resolution of the first cryptocurrency insider trading tip plan on Bitcoin and altcoin exchange Coinbase came as a shock to the community. This is not the first time doubts have arisen about the integrity of crypto exchanges. But the SEC’s complaint about Coinbase scam comes as a chilling reminder that all is not fair in the crypto ecosystem.
Pre-listing effect on Bitcoin exchange Coinbase
In its complaint, the SEC stated that the three defendants misused private information to exploit “at least 25 crypto assets.” Overall, it is estimated that the tip resulted in a profit of $1.1 million derived solely from illegal private information. Interestingly, the lower limit of the commission on the number of misused crypto token listings in the scheme is 25. However, the possibility of further misuse of such announcements cannot be ruled out, although it is not guaranteed.
This tipping scheme case raises more suspicions of abuse and misconduct by others in the past. Alex Kruger, a crypto enthusiast and trader, said why the SEC should not continue to investigate such cases further. Over the years, Coinbase has claimed that many such “front-running” instances of scams will occur. Kruger used the following statements:
I bet there have been a lot more standout cases on Coinbase over the years, even more obvious ones. The Coinbase pre-listing impact on prices has been widely documented and is significant. Why don’t you keep uncovering criminals from the past?
Some people found the news of insider trading on Coinbase unconvincing. Nansen Intern shared his reactions to the Coinbase scam as the profile continued on Twitter. “I can’t believe someone is insider trading new Coinbase listings.”
Coinbase CEO: The trust factor
After news broke about the Coinbase insider trading tip plan, the company’s CEO said it was a great reminder for the ecosystem. Brian Armstrong said one of the defendants was a fired Coinbase employee. “This is a reminder for everyone in crypto and Coinbase that running ahead is illegal and undermines trust. We will investigate bad actors and refer them to law enforcement. ”
Insider trading claims emerged on the famous Bitcoin exchange Coinbase. The US Securities and Exchange Commission (SEC) accused former Coinbase product manager Ishan Wahi of making more than $1.1 million in profits from insider trading with his brother and a friend. Gurbir S. Grewal, director of the SEC’s Enforcement Office, noted in his letter:
We are not concerned with labels, but rather with the economic realities of an offer. In this case, these facts confirm that some of the crypto assets in question are securities and that the defendants allegedly engaged in typical insider trading before they were listed on Coinbase. Regardless of the label on the respective securities, you can be assured that we will continue to provide a level playing field for investors.
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