The perpetrator of a crypto insider trading scheme has been sentenced to prison by a U.S. district court judge.
After pleading guilty to one count of conspiracy to commit wire fraud in connection with a scheme to trade on inside information about cryptoassets, Nikhil Wahi has been sentenced to 10 months in prison and ordered to pay almost US$900,000 in forfeiture.
According to court filings, Wahi profited by trading on inside information from his brother, who was a product manager at crypto-trading platform Coinbase Global, Inc.
Specifically, Wahi traded on tips about which cryptoassets would be listed to trade on Coinbase’s platform — purchasing the assets before Coinbase announced its planned listings and selling them for a profit after the listings were revealed.
“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,” said U.S. attorney for the Southern District of New York Damian Williams, in a release. “Today’s sentence makes clear that the cryptocurrency markets are not lawless.”
The U.S. Securities and Exchange Commission initiated separate civil proceedings against Wahi, his brother, and a friend who also allegedly traded on the tips.