Three former Coinbase employees are charged with the first ever crypto insider trading

Three former Coinbase employees have been charged with telegraph fraud and conspiracy against telecom fraud for planning insider transactions using information on cryptocurrencies scheduled to be listed on the virtual currency exchange Coinbase. This seems to be the first time a criminal accusation has been filed in insider trading involving cryptocurrencies.

Three Charged In First Ever Cryptocurrency Insider Trading Tipping Scheme | USAO-SDNY | Department of Justice

SEC.gov | SEC Charges Former Coinbase Manager, Two Others in Crypto Asset Insider Trading Action
https://www.sec.gov/news/press-release/2022-127

Ex-Coinbase Employee and 2 Others Charged With Insider Trading of Crypto Assets --The New York Times
https://www.nytimes.com/2022/07/21/business/insider-trading-crypto-coinbase.html

Ex-Coinbase manager charged in crypto insider trading case • The Register
https://www.theregister.com/2022/07/21/coinbase_crypto_insider_trading/

Former employees get information on virtual currencies scheduled to be listed and share them with their younger brothers and friends. Both criminal and civil charges have been accused of fraudulently earning a total of $ 1.5 million (about 200 million yen) after trading for 10 months with three people. Of these, a former employee and younger brother were arrested in Seattle, Washington, and a friend's man has been issued an arrest warrant but has escaped.

Federal Attorney Damian Williams of the Southern District of New York, who is in charge of the matter, said it was the first case of criminal accusation in an insider trading on cryptocurrencies.

'We are not interested in the labels on the products, but in the economic reality,' said Guruville S. Grewar, executive director of the Securities and Exchange Commission. In this case, many of the virtual currencies in question It is a security and it has been confirmed that the defendants were conducting typical insider trading prior to listing on Coinbase. We are for investors, regardless of what the relevant securities are called. We will continue to ensure fair competitive conditions. '

Carolyn M. Welshans, also acting as Chief of Virtual Currency and Cyber Units at the Securities and Exchange Commission's Executive Department, said, 'As this case shows, stocks, stock rights (options), virtual currencies, and other securities. Even so, we will fulfill our mission by identifying and eradicating insider trading in securities, if any. '

The Securities and Exchange Commission has nine members: Amp (AMP), Rally (RLY), DerivaDAO (DDX), XYO, Rari Governance Token (RGT), LCX, Powerledger (POWR), Definitex (DFX), and Kromatika (KROM). He said that cryptocurrencies are 'securities,' but Coinbase argued that seven of them were not securities. In the first place, there are no clear rules regarding digital asset securities in the United States, and the Securities and Exchange Commission is taking this case as a good opportunity to take all digital assets, including virtual currencies, which are not originally securities, into their jurisdiction. I point out.

Coinbase does not list securities. End of story. | By Coinbase | Jul, 2022 | The Coinbase Blog
https://blog.coinbase.com/coinbase-does-not-list-securities-end-of-story-e58dc873be79

In line with this accusation, Coinbase has submitted a petition to the Securities and Exchange Commission requesting the start of rule-making for digital asset securities.

The Crypto Securities Market is Waiting to be Unlocked. But First We Need Workable Rules. | By Coinbase | Jul, 2022 | The Coinbase Blog
https://blog.coinbase.com/the-crypto-securities-market-is-waiting-to-be-unlocked-but-first-we-need-workable-rules-c0ba63eabab3