A former Coinbase product manager was sentenced to two years in prison in a one-of-a-kind insider trading case.
Ishan Wahi, 32, of Seattle, Washington, was sentenced by U.S. District Judge Loretta A. Preska on Tuesday for providing Coinbase’s confidential information about upcoming crypto listings to his brother and his friend to then make profitable trades.
“Today’s sentence should send a strong signal to all participants in the cryptocurrency markets that the laws decidedly do apply to them,” said U.S. Attorney Damian Williams in a statement. “The Southern District of New York will hold those who engage in insider trading to full account, regardless of whether their illegal conduct occurs in the equity markets or in the market for crypto assets.”
Wahi pleaded guilty back in February to two counts of conspiracy to commit wire fraud.
Each of the counts carried a maximum sentence of 20 years in prison.
The case had been labeled the first crypto-related insider trading case in the U.S.
What happened?
Coinbase kept secret what new crypto would be traded through its exchange and prohibited employees from sharing that information, authorities said.
Crypto typically increased after Coinbase said it would be listing a certain asset, the Department of Justice said.
Starting in October 2020, Wahi worked at Coinbase as a product manager and knew which crypto Coinbase was planning to list, according to authorities.
“On multiple occasions between June 2021 and April 2022, WAHI violated his duties of trust and confidence to Coinbase by providing confidential business information that he learned in connection with his employment at Coinbase to Nikhil Wahi and Sameer Ramani so that they could secretly engage in profitable trades around public announcements by Coinbase that it would be listing certain crypto assets on Coinbase’s exchanges,” the DOJ said.
Nikhil Wahi and Ramani then often sold the crypto for a profit, authorities said.
Nikhil Wahi pleaded guilty to a wire fraud conspiracy charge in September and was sentenced to 10 months in prison in January.
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