Former Coinbase Manager Sentenced To 2 Years In Prison For Insider Trading
- In an insider trading case, a federal court in the United States sentenced Ishan Wahi, a former Coinbase product manager, to two years in jail.
- Wahi, along with his brother and a friend, pleaded guilty to wire fraud charges in February.
- In January, his brother was sentenced to ten months in jail for his part in the insider trading fraud.
A former Coinbase executive was sentenced to two years in federal prison for trading on secret knowledge about when the cryptocurrency exchange will publish new currencies, according to a Bloomberg report.
In sentencing Ishan Wahi on Tuesday in Manhattan, US District Judge Loretta Preska cited a huge violation of his employer’s confidence over a 10-month period.
Wahi pled guilty in February to two charges of conspiracy to conduct wire fraud, saying he passed along knowledge about new offers to his brother Nikhil and a friend, Sameer Ramani, who used the information to purchase cryptocurrencies before Coinbase stated they would be available. They earned around $1.5 million in profit.
Ishan Wahi, a former product manager at the US-based crypto exchange, was arrested in July 2022 and charged with wire fraud and insider trading for providing insider knowledge about impending crypto listings to his brother and another guy. Authorities claim the guys profited over $1 million trading on Wahi’s knowledge from June 2021 to April 2022.
In July of last year, the Department of Justice indicted the three people engaged in the plan. Prosecutors asserted at the time that it was the first case of its sort filed in the United States.
On May 3, a guilty decision was rendered in the first such case, which featured the former head of product at the non-fungible token (NFT) platform OpenSea. Nate Chastain was convicted of money laundering and wire fraud for making lucrative transactions using insider information, of which NFTs will be posted on OpenSea. Chastain has not yet been sentenced but faces a maximum of 40 years in prison.
He was detained before boarding a one-way aircraft to India in May, only a day after being called to Coinbase’s Seattle offices for a meeting with the exchange’s director of security operations.
Nikhil Wahi, Wahi’s brother, pled guilty to conspiracy to conduct wire fraud in September and was sentenced to ten months in jail in January.
Wahi was backed up in court by a dozen friends and family members, including his mother and girlfriend. Others were listening in on a dial-up phone connection. He expressed regret to the judge and his family.
Coinbase, the biggest digital currency trading platform in the United States, enables users to purchase and sell more than 150 different tokens, which often receive a surge of demand shortly after they are listed on the exchange.
Many lawsuits have been lodged by the SEC against several cryptocurrency exchanges. Despite the lack of a defined rule book for cryptocurrency, Coinbase got a Wells Notice from the government, signaling future enforcement action.
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