Former Coinbase Manager’s Brother Pleads Guilty in Cryptocurrency Insider Trading Case

The member of a erstwhile Coinbase merchandise manager has pleaded blameworthy successful a cryptocurrency insider trading case. According to the U.S. Department of Justice (DOJ), helium is facing up to 20 years successful national prison.

DOJ’s First Crypto Insider Trading Case

The U.S. Department of Justice (DOJ) announced Monday that Nikhil Wahi, the member of a erstwhile merchandise manager astatine Coinbase Global Inc. (Nasdaq: COIN), “pled blameworthy to 1 number of conspiracy to perpetrate ligament fraud successful transportation with a strategy to perpetrate insider trading successful cryptocurrency assets.” The DOJ calls it the “first-ever cryptocurrency insider trading case.” Nikhil Wahi was arrested successful July.

His brother, Ishan Wahi, worked astatine Coinbase arsenic a merchandise manager assigned to the cryptocurrency trading platform’s plus listing squad opening successful October 2020.

The Justice Department explained that connected aggregate occasions betwixt July 2021 and May 2022, Nikhil Wahi profited from utilizing “confidential Coinbase accusation astir which crypto assets were scheduled to beryllium listed connected Coinbase.”

After getting tips from his member arsenic to which crypto assets Coinbase was readying to database connected its exchanges, Nikhil Wahi “used anonymous Ethereum blockchain wallets to get those crypto assets soon earlier Coinbase publically announced the listings,” the DOJ detailed, elaborating:

Following Coinbase’s nationalist listing announcements, connected aggregate occasions Nikhil Wahi sold the crypto assets for a profit.

The DOJ explained that to conceal his purchases, Nikhil Wahi “used accounts astatine centralized exchanges held successful the names of others, and transferred funds, crypto assets, and proceeds of their strategy done aggregate anonymous Ethereum blockchain wallets.”

Nikhil Wahi “also regularly created and utilized caller Ethereum blockchain wallets without immoderate anterior transaction past successful bid to further conceal his engagement successful the scheme,” the Justice Department added, noting:

Nikhil Wahi, 26, of Seattle, Washington, pled blameworthy to 1 number of conspiracy to perpetrate ligament fraud, which carries a maximum condemnation of 20 years successful prison.

The U.S. Securities and Exchange Commission (SEC) besides slapped the 2 brothers and their person with insider trading charges. Nikhil Wahi and the person “allegedly purchased astatine slightest 25 crypto assets, astatine slightest 9 of which were securities, and past typically sold them soon aft the announcements for a profit. The long-running insider trading strategy generated illicit profits totaling much than $1.1 million,” the SEC detailed.

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