The brother of a former Coinbase employee was sentenced to 10 months in prison in what the US Department of Justice (DOJ) called a “groundbreaking case of cryptocurrency insider trading.”
‘Innovative’ case of insider trading on cryptocurrencies
The US Department of Justice (DOJ) announced Tuesday that Nikhil Wahi “has been sentenced to 10 months in prison” in a “groundbreaking case of cryptocurrency insider trading.” He pleaded guilty to one count of conspiracy to commit wire fraud.
The Department of Justice explained that Wahi was sentenced “for his participation in a scheme to commit insider trading in cryptocurrency assets through the use of confidential information of his brother, a former product manager at Coinbase Global Inc. (Coinbase), about which cryptocurrency assets were scheduled to be listed on Coinbase exchanges.”
Referring to the case as “the first insider trading case involving cryptocurrency markets,” US Attorney Damian Williams commented:
At a time when the cryptocurrency markets have been plagued by fear, uncertainty and doubt, insider trading creates the impression that everything is rigged and that only people with secret advantages can make real money.
“Today’s ruling makes it clear that cryptocurrency markets are not lawless. There are real consequences for illegal insider trading, wherever and whenever it occurs,” he continued.
The Department of Justice and the US Securities and Exchange Commission (SEC) filed “insider trading charges” in July of last year against Nikhil Wahi, his brother Ishan Wahi, and their friend, Sameer Ramani.
Authorities explained that around October 2020, Nikhil Wahi obtained confidential information from his brother, who was working on which cryptocurrencies would be listed on Coinbase exchanges. He then anonymously acquired those crypto assets shortly before Coinbase publicly announced that it would list them on its exchanges.
“On multiple occasions following Coinbase’s public listing announcements, Nikhil Wahi sold the crypto assets for profit,” the Justice Department noted, adding:
In addition to the prison sentence, Wahi, 27, of Seattle, Washington, was ordered to pay $892,500 in forfeiture.
Do you think the brother of the former Coinbase employee should go to prison for 10 months for insider trading? Let us know in the comments section.
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