In July 2022, three Coinbase employees, including product manager Ishan Wahi, were charged with insider trading after profiting $1.5 million by leaking information about upcoming cryptocurrency listings.

Wahi's case marked a significant milestone as it was the first-ever prosecution for insider trading in the cryptocurrency sector, resulting in his two-year prison sentence.

Similarly, in September 2021, Nate Chastain, the head of product at OpenSea, faced accusations of insider trading for purchasing NFTs he knew would soon be featured on the platform, which earned him a profit of $57,000.

Chastain was later convicted in May 2023 of fraud and money laundering, receiving a three-month prison sentence, although he intends to appeal the ruling.

In another notable case, a class-action lawsuit against BitMEX alleged that the firm operated an insider trading desk, manipulating customer accounts and liquidations for profit.

The co-founders of BitMEX, Arthur Hayes, Benjamin Delo, and Samuel Reed, pled guilty in 2022 to violating the Bank Secrecy Act, resulting in house arrest, probation, and a $30 million fine.

The pseudonymity of decentralized exchanges has been identified as a contributing factor to the high frequency of insider trading within the cryptocurrency market.

A report indicated that insider trading is a pervasive issue in the crypto community, with over half of all ERC-20 tokens showing signs of this malpractice.

This widespread market manipulation was further highlighted in a June 2023 report by Solidus Labs, which found that 56% of ERC-20 tokens exhibited signs of insider trading.

These incidents illustrate a troubling trend where influential individuals exploit insider knowledge for personal gain, contrasting sharply with the Robin Hood narrative often associated with cryptocurrency.