• Ishan Wahi, a former Coinbase Global Inc product manager, was sentenced to two years in prison for insider trading.
• The guilty verdict comes in the first-ever U.S. insider trading case involving cryptocurrencies.
• Wahi and his co-conspirators made $1.5 million thanks to the scheme.
Coinbase Exec Convicted in Crypto’s First U.S. Insider Trading Case
Background
This is the first crypto insider trading case in the U.S., putting intense regulatory scrutiny on the cryptocurrency sector since the FTX collapse shed light on illicit activity in the sector.. On Tuesday, May 9, Ishan Wahi, a former Coinbase Global Inc product manager was sentenced to two years in prison for insider trading after pleading guilty to two counts of conspiracy to commit wire fraud by Judge Loretta Preska In Manhattan federal court..
The Scheme
As a product manager at Coinbase, Wahi had access to confidential company information which included knowledge of which digital assets would list on the Coinbase platform ahead of public announcement – giving him an advantage over others when it came to trading as cryptos often significantly increase in value after listing on a major exchange..Wahi shared this privileged information with his brother Nikhil and their friend Sameer Ramani who then traded 55 digital assets on Coinbase between June 2021 and April 2022 – making $1.5 million in profits through illicit crypto trading activities..
Aftermath
Nikhil pleaded guilty to a wire fraud conspiracy charge and was sentenced to 10 months imprisonment while US authorities are still searching for Sameer Ramani. The US Securities & Exchange Commission filed a separate lawsuit against Ishan and Nikhil claiming that they committed securities fraud but both parties have agreed to settle these claims out of court.
Takeaway
This case highlights that crypto insider trading has serious consequences and those found guilty will face severe legal repercussions from US courts despite any settlement agreements outside of court proceedings
