A former product manager at Coinbase Global Inc. has admitted to insider trading in cryptocurrency in the first case of its kind in the US. Ishan Wahi, 32, has pleaded guilty to two counts of conspiracy to commit wire fraud after initially pleading not guilty.
Wahi Shared Confidential Information
According to prosecutors, Wahi shared confidential information with his brother Nikhil and their friend Sameer Ramani about forthcoming announcements of new digital assets that Coinbase would offer to trade. This information was then used to make trading decisions that generated at least $1.5 million in illicit gains.
Brother and Friend Charged
Nikhil Wahi and Ramani were charged with using ethereum blockchain wallets to acquire digital assets and trading them at least 14 times before Coinbase announcements between June 2021 and April 2022. These announcements typically caused the assets’ value to rise.
Plea Deal Stipulates Prison Sentence
As part of a plea deal, Ishan Wahi is expected to be sentenced to 36 to 47 months in prison. The sentencing hearing is scheduled for May 10. Meanwhile, Nikhil Wahi has already pleaded guilty and was sentenced to 10 months in prison in January. Ramani remains at large.
SEC Lawsuit
Ishan Wahi asked a judge to dismiss a parallel lawsuit from the Securities and Exchange Commission (SEC) on Monday, stating that the charges represent an “abuse of power” by the agency. The SEC declined to comment on the matter.
In pleading guilty to the criminal charges, Ishan Wahi stated that he did not believe any of the relevant tokens were securities. The question of whether or not the tokens are securities was not part of the prosecutors’ case, according to Noah Solowiejczyk, a prosecutor.
