In what is thought to be the first crypto-related insider trading prosecution in the United States, a former Coinbase product manager pled guilty to two charges of conspiracy to conduct wire fraud. Last year, Ishan Wahi pled not guilty.
Federal prosecutors allege that Wahi communicated secret information about the cryptocurrencies that Coinbase planned to allow its customers to trade on at least 14 times with his brother Nikhil Wahi and friend Sammer Ramani so the three could purchase them in advance. The coins’ value increased when Coinbase stated that it would list them. Nikhil Wahi and Ramani are reported to have profited from the sale of the assets. The plan is said to have netted more than $1.5 million in ill-gotten profits.
Ramani has not been captured. Nikhil Wahi pled guilty to wire fraud conspiracy in September and was sentenced to ten months in jail. According to Reuters, Ishan Wahi faces a jail term of 36 to 47 months as part of his plea agreement. In May, he will be sentenced.
Wahi was also facing civil action from the Securities and Exchange Commission and criminal allegations. He requested a court to dismiss the litigation this week, claiming that the cryptocurrency tokens in issue are not securities and hence are not subject to SEC regulation.
