• Former Coinbase employee, Ishan Wahi, has pleaded guilty to charges of insider trading.
• The scheme began in October 2020 and involved him and his brother as well as a friend.
• He will be sentenced in May 2021 and is the first person to plead guilty in an insider trading case involving cryptocurrency.
Former Coinbase Employee Guilty of Insider Trading
The Department of Justice (DOJ) recently announced that a former product manager at Coinbase, Ishan Wahi, had pleaded guilty to two counts of conspiracy to commit wire fraud for engaging in insider trading. This is the first instance where someone has been found guilty of this type of crime within the cryptocurrency market.
The scheme started in October 2020 when Wahi was given information about which tokens were being listed on the popular trading platform. Knowing that their prices would rise when they were listed, he got his brother and a friend involved in purchasing these tokens prior to them being listed on Coinbase. Then once the prices spiked they sold these assets for a profit and increased their portfolios strength.
Previous Case Involving Brother
In January 2021, Nikhil – Ishan’s brother – was hit with a financial penalty just under $900,000 and was ordered to serve ten months in prison for his involvement with this scheme. Now that Ishan has pled guilty it is likely he will be required to serve more time due to having closer connections with Coinbase than his brother did and likely instigating this plan himself.
Statement from U.S Attorney
U.S Attorney Damian Williams who presided over the court case stated: „Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets.“ He further added that “Whether it occurs in the equity markets or crypto markets stealing confidential business information for your own personal profit or profit of others is a serious federal crime.“
Ishan Wahi’s sentencing date has been set for May 2021 by the DOJ overseeing this case which could result in further consequences beyond what his brother already faced due to his involvement with this fraud scheme primarily because he had closer ties with Coinbase while orchestrating it all along.