UTS: insider trading occurs in 10-25% of listings on Coinbase

In this way, the scammers managed to earn at least $1,5 million

18.08.2022 - 07:30

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What’s new? According to a recent study by the University of Technology Sydney (UTS), insider trading occurs in 10-25% of listings on the cryptocurrency exchange Coinbase. In this way, insiders managed to earn at least $1,5 million. Experts selected 146 tokens that were listed on Coinbase between September 25, 2018, and May 1, 2022, and analyzed the price charts of assets before and after the listing.

STU’s study

What else did the study say? The analysts took a 400-hour period to study the price movements of the sampled tokens: 300 hours before the listing announcement on Coinbase and 100 hours after. Price data was collected from centralized and decentralized exchanges (CEX/DEX) where tokens had already been listed at least 20 days before the Coinbase announcement.

It was noted that in cases of insider trading in the pre-listing period, the token showed abnormally high returns. Experts argue that the price patterns of such assets on exchanges were similar to the “run-ups” that were observed in the recorded cases of insider trading in stocks.

In addition, a number of addresses were suspected of abruptly accumulating and then quickly disposing of tokens immediately after the asset was listed on Coinbase. Analysts also said they were able to identify several cases of insider trading that have not been prosecuted.

On June 21, the first criminal case on insider trading in cryptocurrencies was filed in the United States. The court charged former Coinbase manager Ishan Wahi, his brother Nikhil Wahi and their mutual friend Sameer Ramani. According to the case file, the defendants managed to earn $1,5 million from the listings of 25 cryptocurrencies.

During the proceedings, neither Ishan nor his brother pleaded not guilty. Their lawyer challenged the charges, pointing out that insider trading cases should be related to securities or commodities, which is not the case with his clients.

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