An unknown crypto investor bet nearly half a million dollars on a slew of alt-coins this week that almost immediately jumped in value. The person in question was either really lucky or, as some on the web see it, a dirty, rotten cheater with insider knowledge.
Cryptocurrency exchange Coinbase published a blog post on Monday in which it announced dozens of new tokens that it’s considering listing on its exchange. This seemed harmless enough, but an online sleuth quickly noted that an Ethereum wallet had invested some $US400,000 ($555,280) in the featured coins just hours before the blog post went live. Decrypt reports that the wallet in question completed its investments — which were targeted exclusively at the new offerings — approximately three minutes before the Coinbase blog was published.
As a result of these miraculously lucky bets, the owner of the wallet made a sizable return on their investment. Decrypt writes that the tokens featured in the blog subsequently shot up by about 42 per cent in value following the post’s publication. To onlookers, this certainly appeared as if someone with intimate knowledge of the company’s plans had used that information to inform their investments.
The suspicious activity was initially spotted by Jordan Fish, a podcaster and crypto commentator who goes by the Twitter pseudonym “Cobie.” Fish tweeted about the weird investments on Tuesday morning.
Found an ETH address that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published, rofl pic.twitter.com/5QlVTjl0Jp
— Cobie (@cobie) April 12, 2022
News of the weirdly timed purchases quickly spurred unsavoury accusations against Coinbase — something the company has dealt with before. “This is blatant corruption and insider trading. Yet the SEC won’t do shit about this,” claimed one person on Reddit. “This is why we can’t have nice things.”
“CoinBase insider trading shitcoins – nothing new, but extremely important to talk about,” tweeted another person.
Despite all of the outrage, it’s not at all clear who the suspicious wallet belongs to or where they received the information for their recent purchases. We reached out to Coinbase for comment and will update our story if they respond.
This isn’t the first time the crypto community has grappled with the prospect of unsavoury investment timing. Last summer, the head of product at crypto market OpenSea, Nate Chastain, was caught investing in NFT offerings before they were featured on the company’s website. Investigation found that Chastain had made a modest profit from his purchases, and he was accused of NFT “insider trading.” As a result of the incident, OpenSea later adjusted its rules to bar employee investments in assets prior to their public release.