Insider Trading Suspicions and Shafted Token Holders at the Heart of Latest Coinbase Controversy

Coinbase is betting big on fixing one of crypto’s oldest headaches: the initial coin offerings (ICOs) that fueled the 2017 boom and left a trail of rug pulls in their wake. However, the exchange’s latest acquisition has illustrated some of the underlying issues that still plague this aspect of the crypto market.

Coinbase has agreed to snatch up Vector, which is a Solana-based trading platform cooked up by the team behind the Tensor NFT marketplace. The deal is intended to improve Coinbase’s integration with Solana, and the exchange described Vector as a platform that “gives traders access to one of the most active, high-velocity trading ecosystems in crypto.”

At the core of both controversies associated with this latest acquisition announcement by Coinbase is the TNSR token, which is associated with the team behind Vector.

For one, observers see obvious insider trading around the announcement, with suspicious buys piling into TNSR right before the news hit. The TNSR price surged from around $0.04 to over $0.30 in the days prior to the announcement of the deal. And this was at a time when the crypto market was doing poorly more generally, with bitcoin dropping below $90,000.

Additionally, Coinbase grabbed the Vector tech and the team behind it but left TNSR token holders out of the deal. Whether practical or not, TNSR holders assumed they would benefit from this sort of acquisition, according to Messari research analyst Sam Ruskin.

@DefiSolar Thanks, we’re aware of this and investigating + will take any necessary action based on our findings

— aklil (@_aklil0) November 21, 2025

Coinbase isn’t pretending it didn’t notice the price action. The exchange is digging into the trades and price movement that took place prior to the announcement, a probe that dredges up ghosts from its own insider trading scandal, where an employee got slapped with federal charges for leaking token listing plans to his brother.

“We’re aware of this and investigating + will take any necessary action based on our findings,” Head of Corporate Development Aklil Ibssa wrote on X.

Coinbase’s agreement to acquire Vector brings up existential questions around what crypto market participants are really purchasing when they buy these sorts of tokens. There are many instances where crypto projects have both a token and a formalized company with shareholders associated with it, and the legal ambiguity around what crypto tokens actually represent can leave those holding crypto instead of equity out in the cold.

“TNSR token holders just had their best asset stripped and got ~$0 in return,” said Dragonfly Partner Omar Kanji. “If this continues, people will just stop buying tokens.”

The lack of true connection between crypto tokens and the projects and development teams associated with them has been an area of dispute since crypto’s earliest days, and the lack of ownership over anything real has made some wonder if the more technically-innovative aspects of crypto aren’t much different from the often-mocked memecoins.

harder for Coinbase to sell their new ICO platform when they set the precedent of tokenholders getting rugged on CB’s own acquisitions

as an active buyer of ICO launches rn, it gives me more questions DDing ICO tokens from them vs other platforms that walk the walk themselves https://t.co/1t4owXOmpg

— Jon Charbonneau 🇺🇸 (@jon_charb) November 21, 2025

Notably, this controversy popped up at the same time Coinbase was undertaking the first token offering associated with their new launchpad, which they say is intended to avoid many of the issues and outright fraud associated with the previous ICO bubble of 2017. For many, the Vector deal does not bode well for Coinbase’s reputation as a fair platform for such token launches.

“Harder for Coinbase to sell their new ICO platform when they set the precedent of tokenholders getting rugged on CB’s own acquisitions,” Jon Charbonneau, who is a co-founder of crypto investment firm DBA, posted on X.

At the same time, Coinbase is also looking at potentially launching their own crypto token for its Base network, which operates as a layer-two Ethereum network protocol, even though the platform is functioning well today without a token.

Would it be rude ask why most of you were buying project tokens in the first place?

Funny that crypto waged a war on securities laws and now is about to learn most of them exist to prevent investors from getting ripped off… https://t.co/jx1wgVRCTG

— Austin Campbell (@CampbellJAustin) November 21, 2025

Of course, how much blame can be placed on token creators if people are willing to purchase these assets that don’t have much clarity in terms of what exactly is being purchased or if there is any real use case?

“Funny that crypto waged a war on securities laws and now is about to learn most of them exist to prevent investors from getting ripped off,” said NYU Professor Austin Campbell.