Akin Gump White Collar Defense and Government Investigations Partner Ian McGinley on Coinbase Crypto Fraud Case
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The New York Times quotes Ian McGinley in its article “Ex-Coinbase Employee and 2 Others Charged With Insider Trading of Crypto Assets,” on the indictment of a former Coinbase employee and two other men on both criminal and civil charges. McGinley noted that the Securities and Exchange Commission (SEC) said that the cryptocurrency assets listed on Coinbase’s exchange are considered securities and, consequently, are subject to regulation just as stocks and bonds are. Both government prosecutors and the SEC said that the accused former employee passed on confidential information on crypto asset listings to his brother and his brother’s friend.
McGinley, former Co-Chief of the Complex Frauds and Cybercrime Unit, and a member of the Securities and Commodities Fraud Task Force in U.S. Attorney’s Office in the Southern District of New York, was quoted as saying that this case and another insider trading case involving misappropriation of confidential information in an NFT marketplace “are just the beginning of the [Department of Justice’s] crackdown on insider trading in the crypto space. Both of these cases are for relatively small amounts, but D.O.J. brought them to send a message: They are watching.”
McGinley appeared on CNBC’s The Buzz for the segment “Coinbase was the victim in this fraud case, says Akin Gump’s Ian McGinley.” He noted of the Department of Justice’s charges in the NFT and Coinbase cases within the space of a month, “The timing is no coincidence. The crypto market is under stress. There have been a lot of concerns that investors have. And this is the government saying, ‘We can act in this space, and we will’.”
McGinley also appeared on CoinDesk for its segment “Legal Expert Weighs in on Alleged Crypto Insider Trading Case,” discussing the Coinbase case and the SEC’s declaration of nine digital tokens as securities, and noted similarities with the 1987 insider trading case Carpenter v. United States. He also discussed Justice’s decision to charge the defendant with wire fraud, versus the SEC’s decision to view and treat the tokens as securities. McGinley noted Coinbase’s position as both victim of this crime and as an entity arguing against considering tokens as securities. The segment closed with a discussion of the state of regulation and enforcement in this industry.