US Court Hands Down 10-Month Sentence in Coinbase Insider Trading Case

Nikhil Wahi Also Ordered To Pay Almost $900,000

US Court Hands Down 10-Month Sentence in Coinbase Insider Trading Case

The brother of a former Coinbase employee was sentenced to 10 months in prison this week for profiting off the latter’s insider knowledge of soon-to-be-listed tokens.

Seattle’s Nikhil Wahi, 27, was sentenced by U.S. District Judge Loretta A. Preska after pleading guilty to one count of conspiracy to commit wire fraud, according to the U.S. Attorney’s Office for the Southern District of New York.

Nikhil’s brother, Ishan Wahi, was a former product manager at Coinbase. In the 22-page indictment, prosecutors alleged Ishan, Nikhil, and their friend Sameer Ramani used Ishan’s connections to find out which crypto assets were scheduled to be listed on Coinbase. The group then allegedly purchased the tokens and sold them after the information became public and typically boosted the value of the tokens.

CoinbaseInsiderTrading

Feds Turn Up the Heat on Crypto with Insider Trading Case Against ex-Coinbase Employee

Former Coinbase product manager Ishan Wahi and two associates have been charged for allegedly front-running token listings.

The Defiant The Defiant

The three men traded over 25 different crypto assets on at least 14 occasions and walked away with $1.5M in illicit profits, according to the indictment. Using confidential information to profit from trading securities is illegal in most jurisdictions.

“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 a real buck,” U.S. Attorney Damian Williams said in a prepared statement. “Today’s sentence makes clear that the cryptocurrency markets are not lawless.  There are real consequences to illegal insider trading, wherever and whenever it occurs.”

Wahi was also ordered to forfeit almost $900,000, according to the U.S. Attorney’s Office.

In the indictment, the Southern District of New York said the case had been brought to its attention by a “Twitter account that is well-known within the crypto community,” assumed to be crypto influencer Cobie.  After Cobie’s tweet, Coinbase launched an investigation into Ishan and subsequently fired him.

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