Former Coinbase Employee Pleads Guilty to Insider Trading

• Former Coinbase employee Ishan Wahi has pleaded guilty to conspiracy to commit wire fraud for insider trading.
• His brother Nikhil was previously found guilty and was charged a financial penalty of $900,000 as well as 10 months in prison.
• This is the first case of insider trading involving cryptocurrency to be documented in the books of financial crime.

Former Coinbase Employee Pleads Guilty to Insider Trading

The Department of Justice (DOJ) recently announced that Ishan Wahi, a former product manager at Coinbase, has plead guilty to two counts of conspiracy to commit wire fraud in relation to insider trading. His brother, Nikhil, had previously been found guilty and was sentenced with a financial penalty of nearly $900,000 and 10 months imprisonment. This is the first ever case of insider trading involving cryptocurrency to be officially documented in the books of financial crime.

Scheme Details

Ishan Wahi’s scheme began back in October 2020 when he was given access to confidential data regarding which tokens were set to be listed on the popular crypto exchange platform Coinbase – information that would cause their prices to rise upon listing. He then shared this knowledge with his brother and friend who proceeded to purchase the tokens prior their listing and sell them for a profit when their prices spiked afterwards.

Nikhil’s Sentencing

In January 2021, Nikhil Wahi – Ishan’s brother – pled guilty and was hit with a financial penalty near $900,000 as well as 10 months prison time. His sentencing marks the first time an individual involved in an crypto-related insider trading case has been sent off behind bars.

Ishan’s Sentencing Coming Soon

U.S Attorney Damian Williams presided over Ishan’s trial, stating: “Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets” whether it occurs within traditional stock markets or crypto markets “stealing confidential business information for your own personal profit or the profit of others is a serious federal crime.“ Ishan will now await sentencing which is scheduled for May 2021 where he could face similar penalties or even harsher sentences due his closer connections with Coinbase and likely instigation of this scheme.

Coinbase Struggles Continue

As this case comes closer towards its resolution date it marks yet another black eye for popular crypto exchange platform Coinbase who have struggled lately with multiple issues surrounding customer care service amongst other matters. It remains unclear how much more damage these scandals can do before they impact coinbase’s overall market share but all eyes remain fixated on this space as we await news from both sides moving forward into 2021