key takeaways
- Former Coinbase product manager Ishan Wahi has pleaded guilty to insider trading charges against him.
- Wahi admitted to taking advantage of Coinbase’s cryptocurrency listing process for monetary gain.
- He faces up to 40 years in prison.
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Ishan Wahi, a former product manager at Coinbase, has pleaded guilty to wire fraud charges in the “first case” of cryptocurrency insider trading.
First Cryptocurrency Insider Use Case
One of the highest profile crypto legal cases of the past year saw a major development yesterday.
Former Coinbase Product Manager Ishan Wahi pleaded guilty to two counts of conspiracy to commit wire fraud in connection with a scheme to commit insider trading. He faces up to 40 years in prison; he is scheduled to be sentenced on May 10.
Coinbase is one of the largest cryptocurrency exchanges in the world. Due to the size and notoriety of the company, especially in the United States, cryptocurrencies usually benefit from an increase in price when they are announced to be listed on the platform.
Cryptocurrency influencer Cobie noticed in April 2022 that some wallets were actively buying soon-to-be-listed tokens 24 hours before the listings were made available to the public. Your post on Twitter drew attention from both Coinbase and the Department of Justice, which investigated the matter and found that Wahi could be to blame. When Coinbase approached Wahi to discuss the matter, he attempted to leave the United States for India, but was stopped by police.
The Justice Department discovered that Wahi had been sharing listing information with his brother, Nikhil Wahi, and a friend, Sameer Ramani. The trio generated approximately $1.5 million in unrealized profits in 14 different listing announcements from at least August 2021 through May 2022. Nikhil Wahi already pleaded guilty to charges filed against him in September.
US Attorney Damian Williams testified yesterday that Wahi was “the first whistleblower to admit guilt in an insider trading case involving the cryptocurrency markets,” adding that “whether it occurs in the stock markets or in the cryptocurrency markets, stealing sensitive business information for your personal use.” gain or the gain of others is a felony federal crime.”
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
