In the bubble of crypto enthusiasts and investors, there is much talk of an alleged case of insider trading Coinbase is in on it, which along with Binance is one of the biggest and most important cryptocurrency exchange in the world.

The story is this: Someone just wagered a huge amount of money on a semi-unknown cryptocurrency a few hours earlier Coinbase announced that it had included them in its list of assets available for purchase through its platform. A coincidence that is too blatant to be able to talk about happiness without being ridiculous.

Coinbase adds many minor cryptocurrencies to the list cyclically. Projects often still unknown to the general public, but sufficiently mature and reliable to be exchanged together with long-term tokens and cryptocurrencies.

Whenever Coinbase announces the imminent inclusion of a new cryptocurrency in its vast catalog of assets that can be bought and traded through its exchange, that cryptocurrency immediately gains investor interest, greatly increasing its value. Knowing in advance which smaller cryptocurrencies will be traded on Coinbase in the future therefore offers a huge advantage over all other investors. In the world of stocks, it is illegal to use inside information that is not known to the public to make a profit and those who do so, depending on the legal system, risk jail time in addition to hefty fines.

But cryptocurrencies are not subject to the same rules as traditional finance, so much so that practically no country is pursuing instances of insider trading involving alt coins or other crypto assets. Currently.

The cunning has made a fortune. Insider trading or hacking?

The suspicious transaction was spotted and reported by: Jordan Vis, a popularizer and podcaster active in the world of cryptocurrencies. Trivially, it was possible to trace the anomalous purchase thanks to the fact that all transactions of the most important blockchain they are public and visible to everyone.

We don’t know the identity of the devious: this is because crypto wallets are generally not associated with a real identity – name and surname – but are indicated solely by an alphanumeric string. In short, tracing who is behind a specific wallet is very complicated and if the person who created the wallet is not making mistakes, it can sometimes even be impossible.

Coinbase has not yet officially commented on the episode. We don’t know if the trader accessed inside information through the knowledge of an employee acting in bad faith. There is actually a second equally plausible hypothesis: the investor could have obtained the preview information by hacking into the emails of an employee of the platform. In the absence of an official reconstruction by the respective platform, both theories must be taken for what they are: simple hypotheses.

All we know is that the person behind the operation made a bet $400,000 on cryptocurrencies just a few hours – and in some cases a few minutes – before Coinbase announced its upcoming offer

The operation brought in a huge amount of money: one of the chips in question, decode, gained 42% immediately after Coinbase’s announcement. The other assets recorded a similar appreciation.

In the absence of laws regulating cryptocurrencies and crypto tokens, and despite the obvious bad faith of the operation, neither the investor nor Coinbase risk legal repercussions. Partly for this reason, the news aroused the ire of the fans. “It’s a blatant case of corruption and insider trading, but the SEC won’t do anything,” reads one commentary on the story published on Reddit.

Coinbase did not respond to requests from Gizmodo magazine for clarification. However, it is not the first notable case of insider trading in the crypto monod. It had happened to NFTs, too: Nate Chastain, at the time manager of the leading marketplace dedicated to crypto collectibles, OpenSea, had been caught investing in some NFT collections before they were featured on the site’s homepage. After the incident, the platform was forced to update its policy, prohibiting its employees from investing in NFTs before they are advertised on the site.

Source: Lega Nerd

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