Ex-Coinbase manager arrested in insider trading case for leaking asset listing details

The DOJ referred to the accusations as being related to the "first-ever cryptocurrency insider trading" conspiracy. Ramani is evading capture by the police.

According to the DOJ announcement, Southern District of New York U.S. Attorney Damian Williams said:

"With these accusations, we are sending a clear message: fraud is fraud is fraud, whether it takes place on the blockchain or on Wall Street.

And the Southern District of New York will keep looking for fraudsters wherever they may be in order to bring them to justice.

The defendants allegedly made $1.5 million through "illegal trades" in at least 25 different cryptocurrencies, according to the charges.

The defendants allegedly made $1.5 million through "illegal trades" in at least 25 different cryptocurrencies, according to the charges.

The offense

The DOJ claimed in the news release that following Coinbase's announcement of the potential listing of the assets, the value of cryptocurrencies "usually considerably surged." Therefore, Coinbase maintained the confidentiality of all information pertaining to the public listing announcements and forbade employees from disclosing such information or offering investment advice.

Ishan joined Coinbase as a product manager in the asset listing team in October 2020, according to a news release. Ishan was in a position to know which assets the exchange planned to list and when they would make public statements, according to the press release.

The DOJ claimed that between June 2021 and April 2022, Ishan gave either his brother Nikhil or his friend and partner Ramani access to private information about coin listing announcements. Upon the advice of Ishan, Nikhil, or Ramani, one might purchase the assets beforehand using anonymous Ethereum wallets and then sell them for a profit as the price rose following the news of the Coinbase listing.

The press statement claimed that Nikhil and Ramani used secret tips to their advantage for at least 14 Coinbase listing announcements involving at least 25 distinct assets. According to the DOJ, Nikhil and Ramani transferred money and profits to numerous anonymous or fresh Ethereum wallets in order to conceal their transactions by using centralized exchange accounts in other people's names.

catching the offender

The DOJ statement claims that the investigations were started as a result of a few significant trades that occurred immediately before Coinbase said that it was considering listing a few coins on April 11, 2022.

Just 24 hours before the list was made public on April 12, Cobie, a well-known crypto personality, noted in a tweet that someone had purchased assets included on the Coinbase release for almost $390,000. Ramani, according to the DOJ statement, was the one who traded in the pocketbook that Cobie had mentioned. As part of the investigation, Ishan received an email from the exchange's director of security operations on May 11 asking him to show up for a face-to-face interview on May 16. Ishan gave his word that he would go, but a day before the interview, he booked a one-way ticket to India that would leave right before the interview. Ishan, however, lied to his coworkers by claiming that he had left for India on May 15, according to a statement from the DOJ. It continued, "Ishan called and messaged Nikhil and Ramani about the Coinbase investigation and supplied a picture of the texts he had gotten from the director of security operations," in the hours before his intended departure.

Ishan was about to board his flight when the authorities detained him and barred him from leaving the country.

Each count of conspiracy to commit wire fraud as well as wire fraud has a 20-year sentence maximum. It should be stressed, though, that a judge would determine the defendants' sentences if they were found guilty.

The SEC's individual charges

On July 21, the Securities and Exchange Commission (SEC), which cooperated in the investigation, formally charged the defendants with securities fraud.