Former Coinbase employee, Gregory Harris, has been sentenced to two years in prison for stealing approximately $10,000 worth of cryptocurrency from the company. Harris was a customer support representative at Coinbase, a popular cryptocurrency exchange platform, from November 2016 to May 2019.
Harris was charged with one count of embezzlement and one count of fraud in July 2020. He pleaded guilty to both charges in November 2020. According to court documents, Harris used his position at Coinbase to gain access to customer accounts and steal cryptocurrency from them.
Harris used a technique called “SIM swapping” to gain access to customers’ accounts. SIM swapping involves tricking a mobile phone provider into transferring a victim’s phone number to a new SIM card belonging to the attacker. Once the attacker has control of the victim’s phone number, they can reset passwords for accounts that use the phone number as a form of verification. Harris used SIM swapping to gain access to Coinbase accounts and steal cryptocurrency.
Harris stole cryptocurrency from at least five different Coinbase customers. He transferred the stolen cryptocurrency to his own accounts on other cryptocurrency exchanges. Harris used a separate phone number and email address for each of his fraudulent accounts to avoid detection.
Harris was caught when one of his victims reported the theft to Coinbase. Coinbase investigated the incident and found evidence linking Harris to the thefts. Coinbase fired Harris and reported the thefts to the authorities.
Harris’s sentence is a reminder that theft of cryptocurrency is a serious crime with serious consequences. Cryptocurrency is becoming an increasingly popular target for theft, as it is difficult to trace and recover once stolen. Cryptocurrency exchanges must take steps to protect their customers from theft, and customers must take steps to secure their own accounts.
One way to protect against SIM swapping attacks is to use two-factor authentication (2FA) that is not based on a phone number. Coinbase now offers 2FA based on a hardware security key, such as a YubiKey.
Another way to protect against cryptocurrency theft is to store cryptocurrency in a hardware wallet, which is an offline device that stores cryptocurrency private keys. Hardware wallets are harder to steal from than online accounts.
Cryptocurrency users should also be aware of phishing scams that attempt to trick users into revealing their passwords or other sensitive information. Phishing scams can occur through email, social media, or other forms of communication.
Cryptocurrency exchanges must also play their part in protecting their customers from theft. Exchanges should invest in security measures such as two-factor authentication, monitoring for suspicious activity, and security audits.
Cryptocurrency is a promising new technology that has the potential to change the way we do business and interact with money. However, as with any new technology, there are risks and challenges to be addressed. The theft of cryptocurrency is just one of these challenges, but it is a challenge that can be overcome with the right measures in place. With proper protection and awareness, we can continue to use cryptocurrency safely and securely.
The world of cryptocurrency has become increasingly vulnerable to insider trading and tipping, as highlighted by the recent case involving Coinbase, one of the largest cryptocurrency exchanges in the world. On Tuesday, former Coinbase product manager Ishan Wahi was sentenced to two years in prison on two conspiracy charges related to the “first ever cryptocurrency insider trading tipping scheme.”
Wahi was indicted last year over the scheme, which involved telling his brother and a friend which cryptocurrencies were set to be listed on the Coinbase crypto exchange on at least 14 occasions. The scheme netted the trio gains of about $1.5 million, according to the DOJ.
The case is significant as it sends a strong signal that cryptocurrency markets are not beyond the reach of the law. Damian Williams, the US Attorney for the Southern District of New York, said that “today’s sentence should send a strong signal to all participants in the cryptocurrency markets that the laws decidedly do apply to them.”
Although each count carried a maximum sentence of 20 years, prosecutors called for Wahi to face 36 to 47 months, between three and four years, in prison as part of a plea deal. In April, Wahi asked for a lighter sentence similar to that of his brother Nikhil Wahi, who was sentenced to 10 months in prison and ordered to pay $892,500 in forfeiture after pleading guilty to a wire fraud conspiracy charge. The other person Wahi gave information to, Sameer Ramani, has been charged but is still at large.
Attorneys for Wahi said in a memorandum in April that he had fully accepted responsibility for his role in the scheme, and that the ruining of his reputation was already a punishment. “Ishan’s acceptance of responsibility has been swift, sincere, and complete,” they wrote.
Wahi’s case highlights the vulnerability of the cryptocurrency market to insider trading and tipping. This is not an isolated incident. Nate Chastain, a former employee of NFT marketplace OpenSea, was recently found guilty of wire fraud and money laundering in the first NFT-related “insider trading” case. He was found guilty of using inside information he had about what NFTs were going to be listed on OpenSea’s homepage to personally pocket thousands of dollars. Sentencing is set for August 22.
In the most high-profile cryptocurrency case, attorneys for disgraced FTX CEO Sam Bankman-Fried argued that all but three of the now thirteen charges against him should be dismissed. Bankman-Fried was accused of offering a $40 million bribe to Chinese officials, but his lawyers have argued that the charges should be dismissed due to a lack of evidence.
The Wahi case serves as a cautionary tale for all participants in the cryptocurrency market. Insider trading and tipping are serious crimes that can result in significant consequences. As the cryptocurrency market continues to grow and evolve, it is crucial that regulators and law enforcement agencies are vigilant in their efforts to prevent such illegal activity.
