Ishan Wahi, a former product manager at Coinbase Global Inc., has pleaded guilty to two counts of conspiracy to commit wire fraud in what U.S. prosecutors have named the first insider trading case involving cryptocurrencies.
According to a Reuters report on Feb. 7, prosecutors allege Wahi disclosed private information to his brother Nikhil and friend Sameer Ramani about Coinbase’s upcoming release of new digital assets that will enable users to transact. The announcement later led to an increase in the value of the assets, netting Nikhil and Sameer Raman at least $1.5 million in illicit proceeds. Nikhil Wahi and Ramani are accused of using Ethereum blockchain wallets to acquire digital assets and trade ahead of the Coinbase announcement.
“I know that Sameer Ramani and Nikhil Wahi will use this information to make trading decisions,” Ishan Wahi admitted during a Feb. 7 hearing in Manhattan federal court. "The misappropriation and dissemination of Coinbase's property is wrong," he added.
Ishan Wahi agreed to a sentence of 36 to 47 months in prison as part of a plea deal. His sentencing hearing is scheduled for May 10. Coinbase reportedly shared with prosecutors the results of an internal investigation into the transaction.
On Jan. 10, Cointelegraph reported that Ishan Wahi’s brother Nikhil was sentenced to 10 months in prison for wire fraud conspiracy. Nikhil Wahi pleaded guilty in September to initiating the deal based on confidential information obtained from his brother. Ramani remains at large.
In the case of Nikhil Wahi, U.S. prosecutors recommended a prison sentence ranging from 10 to 16 months because he profited nearly $900,000 from illegal activities. His defense attorneys, however, offered an alternative outcome, arguing that his motive for the crime was to pay for his parents' college education and that he had no prior convictions.
