The former product manager at crypto trading firm Coinbase Global Inc., who pleaded guilty in the first-ever insider trading case involving cryptoassets has been sentenced to two years in jail.
After pleading guilty to two counts of conspiracy to commit wire fraud for tipping off his brother and a friend about which cryptoassets were going to be listed for trading on Coinbase — an event that typically causes the market value of the assets in question to rise — Ishan Wahi was sentenced to prison by a U.S. district court judge.
He was also ordered to forfeit the cryptoassets he received in connection with the scheme.
“Ishan Wahi — a former Coinbase product manager — violated the trust placed in him by his employer by tipping others with valuable confidential information regarding Coinbase’s planned token listings,” said Damian Williams, U.S. attorney for the Southern District of New York (SDNY), in a release.
According to the allegations in the case, Coinbase held its plans about future listings strictly confidential, and prohibited employees from sharing that information.
As a product manager on the company’s asset listing team, Wahi had “detailed and advanced knowledge of which crypto assets Coinbase was planning to list and the timing of public announcements about those crypto asset listings,” the SDNY noted.
It was alleged that he repeatedly passed along information about these plans to his brother, Nikhil Wahi, and a friend, Sameer Ramani, who traded on that inside information, generating an estimated US$1.5 million in profits.
Earlier this year, Nikhil Wahi, who pleaded guilty to one count of wire fraud conspiracy, was sentenced to 10 months in prison and ordered to pay $892,500 in forfeiture.
“The Southern District of New York will hold those who engage in insider trading to full account, regardless of whether their illegal conduct occurs in the equity markets or in the market for crypto assets,” Williams added.