Brother of former Coinbase product manager pleads guilty in crypto enzyme trading case He faces up to 20 years in federal prison, according to the United States Department of Justice (DOJ).
DOJ’s first Crypto Insider trading case
The United States Department of Justice (DOJ) announced Monday that Coinbase Global Inc. (Nasdaq: Coin) former product manager brother Nikhil Wahi “committed one count of conspiracy to commit wire fraud in connection with the proposed scheme.” Make insider trades in cryptocurrency assets. The DOJ calls it “the first-ever cryptocurrency insider trading case.” Nikhil Wahi was arrested in July.
His brother Ishan Wahi has worked at Coinbase since October 2020 as a product manager assigned to the asset listing team of the cryptocurrency trading platform.
Between July 2021 and May 2022, Nikhil Wahi profited from using “confidential Coinbase information about which crypto assets were slated to be listed on Coinbase,” the Justice Department said.
After getting tips from his brother on which crypto assets Coinbase intends to list on its exchanges, Nikhil Wahi said, “Shortly before Coinbase went public, it used anonymous Ethereum blockchain wallets.
Following Coinbase’s public listing announcements, Nikhil Wahi sold crypto assets at a profit on several occasions.
The DOJ explained that Nikhil Wahi “used accounts at centralized exchanges held in the names of others to transfer funds, crypto-assets, and proceeds of his scheme through multiple anonymous Ethereum blockchain wallets” to hide his purchases.
In addition, Nikhil Wahi regularly created and used new Ethereum blockchain wallets without any prior transaction history to further conceal his involvement in the scheme, the Justice Department added.
Nikhil Wahi, 26, of Seattle, Washington pleaded guilty to wire fraud, which carries a maximum sentence of 20 years in prison.
The US Securities and Exchange Commission (SEC) also slapped the two brothers and their friend on insider trading charges. Nikhil Wahi and his friend “allegedly bought at least 25 crypto assets, at least nine of which were securities, and sold them for a profit shortly after the announcement. The long-term insider trading scheme generated illegal profits of more than $1.1 million,” the SEC detailed.
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