Coinbase product manager settles insider trading case with SEC
An ex-product manager of Coinbase, along with his brother, have reached an agreement to resolve charges brought by the US top watchdog in connection with insider trading.
In a statement, the Securities and Exchange Commission (SEC) revealed that Ishan Wahi shared confidential information with his brother and their friend about new digital assets that Coinbase was planning to list on its platform. The SEC noted that at least nine securities were involved in a scheme to engage in trading activities before the public announcements of several crypto asset securities.
According to the filing, Coinbase considered the information regarding upcoming token listings on its platform to be confidential. The company explicitly cautioned its employees against trading or sharing this information with others. However, between June 2021 and April 2022, Ishan disregarded these restrictions and consistently provided Nikhil and his friend Sameer Ramani with details about the timing and content of upcoming listing announcements.
Coinbase’s product manager, who pleaded guilty to sharing insider information in order to profit from cryptocurrency trading, was sentenced to 26 months. The sentence came 10 months after authorities arrested Ishan and his partners while they were attempting to fly to India.
Ishan argued earlier that he should be given a sentence of just 10 months, despite sentencing guidelines recommending a minimum of three years.
Ishan Wahi was charged by the U.S. Department of Justice (DOJ) last year with wire fraud for sharing information about which tokens would be listed on the exchange before they were publicly available.
Nikhil Wahi, the brother of a former Coinbase employee, was ordered by a New York District Court to pay nearly $470,000 to the US cryptocurrency exchange for his participation in an insider trading scheme. He pleaded guilty to making trades using confidential information in September 2021 and was then sentenced to 10 months in prison for his involvement in a wire fraud conspiracy after being convicted in January 2022.
Nikhil will start making restitution payments while serving time in prison. This case is believed to be the first insider trading case involving cryptocurrency. He must pay the amount in full within 20 years of his release from prison, and it represents the sum Coinbase expended on legal services related to the Department of Justice’s inquiry.
