Nikhil Wahi, brother of a former Coinbase product manager, has received a ten-month prison sentence in what is regarded as the first insider trading case in cryptocurrency markets. Wahi pleaded guilty to conspiracy to commit wire fraud after realizing $900,000 in profits by purchasing coins before they were listed on the exchange, spurred by insights from his brother, Ishan Wahi.
Wahi was apprehended while attempting to board a one-way flight to India, carrying three large suitcases, seven electronic devices, two passports, various forms of identification, cash, financial documents, and personal items.
Ishan Wahi was employed as a product manager for Coinbase’s asset listing team and was part of a private messaging channel that included a select group of employees involved in asset listings from August 2021 to May 2022. This channel was utilized to discuss confidential details about asset announcement and launch timelines, which were not disclosed to all Coinbase employees.
Prosecutors revealed that on at least 14 occasions, Ishan transmitted non-public information to Nikhil or his friend, Sameer Ramani. The trio used anonymous Ethereum blockchain wallets to purchase cryptocurrency just before Coinbase publicly announced that it would list or was considering listing those assets.
The scheme came to light when a Twitter user identified an Ethereum address that purchased substantial amounts of tokens featured in a Coinbase listing announcement roughly 24 hours before it became public. This led to an investigation by Coinbase and subsequent indictment by the U.S. Department of Justice.
In addition to his prison sentence, Nikhil Wahi has been ordered to repay the profits he gained illegally and is expected to be deported to India upon his release. Ishan Wahi has pleaded not guilty and is awaiting his court date, while Sameer Ramani remains at large.