• Former Coinbase Employee Ishan Wahi was found guilty of insider trading in a first-ever crypto case.
• He pled guilty to two counts of conspiracy to commit wire fraud, and will be sentenced in May.
• His brother, Nikhil Wahi, was hit with a financial penalty of nearly $900K and 10 months in prison for his involvement in the scheme.
Former Coinbase Employee Guilty of Insider Trading
A former product manager at Coinbase, Ishan Wahi, has pleaded guilty to charges related to insider trading. This is the first ever recorded instance of a financial crime involving the cryptocurrency market. The Department of Justice oversaw this case and determined that Mr. Wahi had access to confidential information regarding which tokens were set to be listed on the popular trading platform – thus allowing him to profit when their prices rose after listing.
Scheme Initiated Two Years Ago
The scheme began more than two years ago in October 2020 and included getting his brother and a friend involved in purchasing the tokens prior to their listings. When their prices would spike, they would sell them at a profit – boosting the strength of their portfolios through illegal means. In January 2021, Nikhil – Mr. Wahi’s brother – was hit with a financial penalty of nearly $900K as well as having to serve around 10 months in prison for his involvement with this case.
Wahi Pleads Guilty
Now that Ishan has plead guilty himself he is likely going to have an even harsher sentence considering he is closer connected with Coinbase and seen as the instigator for this plan by authorities overseeing it. He plead guilty on two counts of conspiracy to commit wire fraud and will find out his sentencing come May 2023 from U.S Attorney Damian Williams who presided over this court case saying: „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.“
Tough Time for Exchange
Coinbase has had an especially difficult time managing these cases due largely because such criminal activities are so rare within cryptocurrency markets; making it difficult even for exchanges such as Coinbase who have experience dealing within traditional stock exchange criminal activities such as insider trading not necessarily being prepared for similar instances occurring within crypto markets which require different approaches when handling them due both legal implications as well as reputation damage control strategies needed by companies like Coinbase since they operate on public trust largely built upon consumer confidence which can easily be lost if not managed properly following events like this one involving Ishan Wahid and his brother Nikhol Wahid back in 2020/2021 respectively .