In the first insider trading case involving cryptocurrencies, a former product manager at Coinbase Global has been charged with wire fraud along with two other individuals.
Concerning a conspiracy to engage in insider trading in crypto assets, Ishan Wahi, a former product manager at cryptocurrency exchange Coinbase, and his brother Nikhil Wahi are being charged with “wire fraud conspiracy and wire fraud.” Along with their friend, Sameer Ramani, Mr. Wahi, his brother, and others are facing charges. According to reports, Ishan Wahi informed his brother and a friend “regarding crypto assets that were going to be listed on Coinbase exchanges.”
The Wahi brothers were detained in Seattle, Washington, and preparations are being made to present them to the Western District of Washington U.S. District Court. According to reports from Reuters, their accomplice, Sameer Ramani, has not yet been apprehended and is still at large. The Southern District of New York U.S. Attorney’s Office and the Federal Bureau of Investigation’s New York Field Office jointly filed the charges.
Ishan Wahi, according to the prosecution, divulged confidential information about upcoming announcements of new crypto assets that the exchange was due to list. Between June 2021 and April 2022, Nikhil Wahi and Sameer Ramani allegedly made $1.5 million in ill-gotten gains by trading at least 14 times using Ethereum blockchain wallets to purchase assets. This was before Coinbase made any statements. The charges read:
After getting tips from Ishan Wahi, Nikhil Wahi, and Ramani, they used anonymous Ethereum blockchain wallets to acquire crypto assets shortly before Coinbase publicly announced that it was listing or considering listing these crypto assets on its exchanges. Following the Coinbase public listing announcements, Nikhil Wahi and Ramani sold the crypto assets for a profit.
Michael Driscoll, assistant director of the FBI, said:
Although the allegations, in this case, relate to transactions made in a crypto exchange — rather than a more traditional financial market — they still constitute insider trading.
The U.S. Securities and Exchange Commission has also filed charges against the three, alleging that they made $1.1 million via insider trading on at least nine out of the 25 assets they allegedly traded.
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