Former employee of Coinbase cryptocurrency exchange plead guilty Insider trading on Tuesday, the first time a crypto industry insider has admitted trying to profit from classified information.
The case has been closely watched by the crypto industry since charges were brought against former Coinbase product manager Ishan Wahi in federal court for the Southern District of New York in July. By cracking down on insider trading at a major exchange, federal authorities signal a willingness to go after the freewheeling cryptocurrency industry to address the same types of malfeasance that occur in traditional financial markets.
Mr. Wahi pleaded guilty to two counts of conspiracy to commit wire fraud and is due to be sentenced on May 10. Each count carries a maximum sentence of 20 years in prison, though federal guidelines often result in shorter sentences.
“Whether it occurs in the stock market or the cryptocurrency market, the theft of confidential business information for personal gain or the benefit of another is a serious federal crime,” said Damian Williams, U.S. Attorney for the Southern District of New York. a statement.
A lawyer for Vahi declined to comment. A Coinbase spokeswoman said the company “takes allegations of improper use of company information with the utmost seriousness.”
Mr. Wahi, 32, started working on Coinbase’s Asset Listing team around October 2020. This allowed him to obtain information on which cryptocurrencies the company will offer on its platform.
According to prosecutors, Mr. Wahi provided information about the listing to his brother, Nikhil Wahi, and his brother’s friend, Sameer Ramani, so they could work on the lucrative deal secretly. When a major exchange like Coinbase announces plans to go public, the prices of cryptocurrencies typically rise.
In total, Mr. Wahi and two other men were involved in transactions that used information from 14 listings to illegally profit about $1.5 million, according to prosecutors.
Last month, Nikhil Wahi Sentenced to 10 months in prison for his role in the scheme. Mr Ramani has also been charged.
The insider trading case is part of a growing crackdown on the crypto industry by federal authorities. Nicolas Roos, one of the Assistant U.S. Attorneys who prosecuted Ishan Wahi, is also spearheading the office’s targeting of Sam Bankman-Fried, the disgraced founder of the FTX cryptocurrency exchange. (Sam Bankman-Fried)’s ever-expanding case.
