Ex-Coinbase Manager Charged in Crypto Insider Trading Case

The fee was charged in the first insider trading case related to cryptocurrency.

US prosecutors in Manhattan said a former product manager at Coinbase Global and two others have been charged with wire fraud.

Ishan Wahi, a product manager at a cryptocurrency exchange, and his brother Nikhil Wahi were arrested Thursday in Seattle.

The SEC is also filing civil charges against a third defendant, their friend Samir Ramani, who is still at large.

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Illustration of the Coinbase logo with examples of cryptocurrencies. (iStock / iStock)

Lawyers for Ishan Wahi, 32, said in a statement that he “is innocent of all wrongdoing and intends to vigorously defend himself.” Nikhil Wahi’s lawyer did not immediately respond to requests for comment. Reuters was not immediately able to identify a lawyer for Ramani.

Ishan Wahi allegedly shared confidential information about upcoming announcements of new crypto assets that Coinbase will allow users to trade through its exchange, according to prosecutors.

They also said Ishaan Wahi may have intended to flee, having bought a round-trip plane ticket to India after being summoned to Coinbase’s Seattle office for a meeting by the company’s director of security.

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He was turned away from that flight by law enforcement on May 16.

Ishaan Wahi’s bail was set at $1 million, and he was ordered to hand over his passports. The prosecution did not demand his detention despite his alleged escape attempt. His next appearance in federal court will be on August 2 in Manhattan.

Cryptocurrency photography

Illustration of cryptocurrency. (Chesnot / Getty Images / Getty Images)

In related civil charges, the SEC alleged that Nikhil Wahi, 26, and Ramani, 33, bought and sold at least 25 crypto-assets for profit, nine of which the agency said it identified as securities.

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An official with the SEC said its investigation is ongoing, and declined to reveal whether it would pursue proceedings against Coinbase for including the tokens that are considered securities in the complaint.

Illustration of a group of bitcoins

A stack of bitcoins is displayed. (iStock / iStock)

Prosecutors said that the Ethereum blockchain wallets were used to acquire assets and traded at least 14 times prior to Coinbase announcements from June 2021 and April 2022.

These deals generate at least $1.5 million in illicit gains.

Philip Martin, Coinbase’s chief security officer, said the company had shared findings with prosecutors from an internal trading investigation.

Reuters contributed to this report.

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