Ishan Wahi, a former product manager at Coinbase Global Inc., has pleaded guilty to two counts of conspiracy to commit wire fraud in a case that US prosecutors have labeled as the first insider trading case involving cryptocurrency.
Former Coinbase manager pleads guilty in insider trading case https://t.co/i6fG3c3wHc pic.twitter.com/zKfjqnNpzT
— Reuters (@Reuters) February 7, 2023
According to a report by Reuters, prosecutors alleged that Wahi disclosed personal information to his brother Nikhil and his friend Sameer Ramani, regarding the announcement of a new digital asset that Coinbase would allow users to trade. The announcement then caused the assets to increase in value, allowing Nikhil and Sameer Raman to make illegal profits of at least $1.5 million. Nikhil Wahi and Ramani were accused of using the Ethereum (ETH) blockchain wallet to acquire digital assets and trade before Coinbase’s announcement.
“I know that Sameer Ramani and Nikhil Wahi will use that information to make trading decisions,” Ishan Wahi said during Tuesday’s hearing in Manhattan federal court. “You are wrongfully misusing and distributing Coinbase’s property,” he said.
As part of his plea agreement, Ishan Wahi has agreed to serve between 36 and 47 months in prison. His sentencing hearing is scheduled for May 10. His brother Nikhil Wahi has pleaded guilty and was sentenced to 10 months in prison, while Ramani remains at large. Coinbase has reportedly shared the findings of an internal investigation into the trade with prosecutors.
Related: Crypto exchanges tackle insider trading after new conviction
On January 10, Cointelegraph reported that Ishan Wahi’s brother, Nikhil Wahi, was sentenced to 10 months in prison on wire fraud conspiracy charges. Nikhil Wahi pleaded guilty in September to starting a trade based on confidential information obtained from his brother, Ishan Wahi.
In the case of Nikhil Wahi, US prosecutors proposed a prison sentence of between 10 and 16 months because he earned nearly $900,000 from illegal activities. However, his defense attorney proposed an alternative outcome, stating that the driving force behind the offense was to pay for his parents’ college education and that he had no prior criminal history.