Nikhil Wahi, the brother of a former product manager at Coinbase Global Inc( Coinbase), pled guilty to one count of conspiracy to commit wire fraud in connection with a strategy of insider trading at a court hearing on Monday.
The United States Attorney for the southern district of New York, Damian Williams, said in a statement, “Less than two months after he was charged, Nikhil Wahi admitted in court today that he traded in cryptocurrency assets by using confidential Coinbase information. About which the assets were supposed to be filed on Coinbase exchanges which he was not authorized.”
According to a Reuters report, William added”
“For the first time, a defendant has admitted that he is guilty in an insider trading case involving cryptocurrency markets. Today’s guilty plea should remind those participating in the cryptocurrency markets that the Southern District of New York will continue to steadfastly police frauds of all stripes and adapt as technology evolves.”
Wahi was arrested in July this year and admitted during a virtual court hearing that he made trades based on confidential Coinbase information before U.S District judge Loretto A. Preska in Manhattan. Nikhil Wahi now awaits conviction for his crime and must also face a penalty for the profits that he acquired unlawfully.
Ishan Wahi worked in the Coinbase company as a product manager until early October and was employed among the Coinbase asset listing team. In carrying out his role, Ishan was intricated in a thorough, confidential process of listing crypto assets in Coinbase, the largest crypto exchange in the U.S. He became knowledgeable of which crypto assets Coinbase was about to list and the timing of the public announcement of the crypto asset listing.
Ishan later shared the confidential information with his brother and friend Sameer Ramani on how the Coinbase company was planning to trade the crypto assets. Nikhil Wahi used personal data and the Ethereum Blockchain wallets to obtain the crypto assets and changed them at least 14 times before Coinbase’s public listing announcement in June 2021 and April 2022. As stated by the prosecutor, the reports generated the crypto assets to rise in value and caused at least $1.5 million in gains.
Nikhil used accounts in centralized exchanges held in the names of others to hide his purchases of the crypto assets and transferred funds, profits, and crypto assets through many unidentified Ethereum blockchain wallets.
However, Nikhil thought that by pleading guilty, he would be deported from the United States of America and lose everything he had worked for. The U.S District judge Loretto A. Preska is scheduled to sentence Nikhil on December 13, 2022.
General Hint From SEC Action
The Securities and Exchanges Commission (SEC) filed charges against the trio, accusing them of profiting from selling illegal securities. The SEC went further and gave explanations that some of the coins the trio traded were securities. They added that the coins were listed on Coinbase before the announcement, and the exchange had not given authority, so they qualified as unregistered securities. The trio had violated the antifraud provisions of the Securities and Exchanges Commission’s security regulations, respectively.
Ishan Wahi, who pleaded not guilty, is scheduled to appear in court on March 22, 2023.
Mr. William, however, showered the Federal Bureau Of Investigation’s investigative work with praises and appreciated the help of the Justice Department’s National Cryptocurrency Enforcement Team and the SEC, which separately took action on the civil progress against the Wahi and Romani.