Photo: Shannon Stapleton/Reuters
First Case of Crypto Insider Trading
One of last year’s most high-profile crypto legal cases saw an important 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 for sentencing on May 10.
Coinbase is one of the biggest crypto exchanges in the world. Because of the company’s size and notoriety, especially in the United States, cryptocurrencies usually benefit from a surge in price when the announcement is made that they’ll get listed on the platform.
Crypto 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. His Twitter post brought the attention of both Coinbase and the Department of Justice, which investigated the matter and found that Wahi could be the culprit. When Coinbase reached out to Wahi to discuss the matter, he attempted to leave the United States for India—but was stopped by law enforcement.
The DOJ found that Wahi had been sharing listing information with his brother, Nikhil Wahi, and a friend, Sameer Ramani. The trio generated an estimated $1.5 million in unrealized gains over 14 different listing announcements from at least August 2021 to May 2022. Nikhil Wahi already pleaded guilty to the charges laid against him in September.
U.S. Attorney Damian Williams stated yesterday that Wahi was “the first insider to admit guilt in an insider trading case involving the cryptocurrency markets,” adding that “whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime.”
Source: https://cryptobriefing.com/former-coinbase-employee-pleads-guilty-to-insider-trading/
