A former Coinbase employee’s brother has been sentenced to 10 months in prison in what the U.S. Department of Justice (DOJ) called a “groundbreaking cryptocurrency insider trading case.”
‘Groundbreaking’ Crypto Insider Trading Case
The U.S. Department of Justice (DOJ) announced Tuesday that Nikhil Wahi “was sentenced to 10 months in prison” in a “groundbreaking cryptocurrency insider trading case.” He pled guilty to one count of conspiracy to commit wire fraud.
The Justice Department explained that Wahi was sentenced “for his participation in a scheme to commit insider trading in cryptocurrency assets by using confidential information from his brother, a former product manager at Coinbase Global Inc. (Coinbase), about which crypto assets were scheduled to be listed on Coinbase’s exchanges.”
Referring to the case as “the first-ever insider trading case involving cryptocurrency markets,” U.S. Attorney Damian Williams commented:
At a time when the cryptocurrency markets have been plagued by fear, uncertainty, and doubt, insider trading creates the impression that everything is rigged and that only people with secret advantages can make a real buck.
“Today’s sentence makes clear that the cryptocurrency markets are not lawless. There are real consequences to illegal insider trading, wherever and whenever it occurs,” he continued.
The DOJ and the U.S. Securities and Exchange Commission (SEC) filed “insider trading charges” in July last year against Nikhil Wahi, his brother Ishan Wahi, and their friend, Sameer Ramani.
The authorities explained that around October 2020, Nikhil Wahi obtained confidential information from his brother, who was working on which cryptocurrencies would be listed on Coinbase exchanges. He then anonymously acquired those crypto assets shortly before Coinbase publicly announced that it was listing them on its exchanges.
“On multiple occasions following Coinbase’s public listing announcements, Nikhil Wahi sold the crypto assets for a profit,” the DOJ noted, adding:
In addition to the prison sentence, Wahi, 27, of Seattle, Washington, was ordered to pay $892,500 in forfeiture.
Do you think the ex-Coinbase employee’s brother should go to prison for 10 months for insider trading? Let us know in the comments section below.