Former Coinbase Manager’s Brother Pleads Guilty in Cryptocurrency Insider Trading Case

A former Coinbase product manager's brother has pleaded guilty to insider trading. He could spend up to 20 years in federal jail, according to the U.S. Department of Justice.

DOJ's First Crypto Insider Trading Case

The U.S. Department of Justice (DOJ), announced Monday that Nikhil Wahi (brother of a former product manger at Coinbase Global Inc., Nasdaq:COIN) "pled guilty" to one count of conspiracy for wire fraud in connection to a scheme to trade in cryptocurrency assets.

His brother, Ishan Wahi worked as a product manager at Coinbase, assigned to the asset listing team of the cryptocurrency trading platform. He started working with Coinbase in October 2020.

According to the Justice Department, Nikhil Wahi was able to profit multiple times from using confidential Coinbase information regarding crypto assets that were set for listing on Coinbase between July 2021 & May 2022.

Nikhil Wahi received tips from his brother about which crypto assets Coinbase planned to list on its exchanges. He "used anonymous Ethereum blockchain wallets" to acquire these crypto assets just before Coinbase announced their listings. The DOJ elaborated:

Nikhil Wahi, a cryptocurrency investor, has sold crypto assets multiple times for profit following Coinbase's public announcements.

According to the DOJ, Nikhil Wahi used accounts at central exchanges that were held under the names of others and transferred crypto assets and funds as part of his scheme through multiple anonymous Ethereum blockchain wallets.

Nikhil Wahi "also frequently created and used new Ethereum Blockchain wallets without any previous transaction history to further conceal his involvement with the scheme," added the Justice Department.

Nikhil Wahi (26), of Seattle, Washington, has pleaded guilty to one count conspiracy to commit wirefraud. This carries a maximum sentence that can be up to 20 years in prison.

The U.S. Securities and Exchange Commission also charged the brothers and their friend with insider trading. Nikhil Wahi, the friend, "allegedly bought at least 25 cryptocurrency assets, at most nine of which were securities, then typically sold them soon after the announcements for profit." According to the SEC, the long-running insider trading program generated illicit profits of more than $1.1million.

What are your thoughts on this case? Comment below to let us know your thoughts.

By: Kevin Helms
Title: Former Coinbase Manager’s Brother Pleads Guilty in Cryptocurrency Insider Trading Case
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Published Date: Wed, 14 Sep 2022 03:30:57 +0000

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