Courts have found a former Coinbase Global Inc product manager guilty of insider crypto trading in the first case of its kind, lawyers revealed.
Ishan Wahi pleaded guilty to two charges of conspiracy to commit wire fraud. This comes just after he initially pleaded not guilty in previous hearings.
Wahi shared confidential information Nikhil Wahi, his brother, and Sameer Ramani, a mutual friend of the two. The information contained confidential information about upcoming announcements of digital asset set to trade on Coinbase.
“I knew that Sameer Ramani and Nikhil Wahi would use that information to make trading decisions. It was wrong to misappropriate and disseminate Coinbase’s property,” Wahi said at the federal court hearing.
Authorities charged both Nikhail Wahi and Sameer Ramani with acquiring digital assets via Ethereum-backed wallets. The two suspects traded roughly 14 times using embargoed Coinbase announcements from June 2021 to April last year, reports showed.
In September, Nihil Wahi pleaded guilty to conspiracy to commit wire fraud. Authorities sentenced him to 10 months in jail in January.
Regarding Ishan Wahi, he faces a further sentencing hearing in US district courts in January. He is expected to serve from 36 to 47 months in prison as outlined in his plea deal, prosecutors said.
Coinbase and Cooperation
Coinbase is the world’s second-largest exchange by volumes and has cooperated with prosecutors on an internal probe. Authorities, including those in the US Securities and Exchange Commission (SEC) are determining whether the digital assets were securities.
Coinbase has remained compliant with global regulators amid the bear market in 2022. Germany’s Federal Financial Supervisory Authority ordered Coinbase to set up a German division due to alleged business organisation violations. The watchdog cited the German Banking Act and demanded Coinbase Germany to provide audit certificates for annual accounts when requested.