Brother to Former Coinbase Exec Pleads Guilty to Insider Trading Charges

In a first-of-its-kind instance, Nikhil Wahi 26, the brother of Coinbase’s former Product Manager has pleaded guilty to a wire fraud conspiracy charge in connection with an alleged insider trading scheme.

According to the statement from the Department of Justice, Nikhil during a virtual hearing admitted to making trades based on prior insider knowledge before a Manhattan Federal Court.

Nikhil could face up to 20 years in prison and also forfeit proceeds from the unlawful scheme as he awaits sentencing by a Judge in December.

First-ever guilty plea to crypto wire fraud

The case is going to set a precedent as according to the US prosecutors, it is the first insider trading case involving cryptocurrency making Nikhil the first person to plead guilty to charges of insider trading.

According to the prosecutors, the case should serve as a deterrent for crypto traders who engage in criminal activities. It said regulators will continue to police frauds of all stripes and will adapt with the advancement of technology.

With Nikhil’s guilty plea and the recent development, it is unclear how the former manager, Ishan Wahi’s case will proceed after he had pleaded not guilty to the US Department of Justice’s charge in August. His next appearance in court is scheduled for March 2023.

Ishan Wahi is accused of using his position in the exchange to learn in advance which coin would be listed on Coinbase. He then shares this knowledge with his brother and another associate Sameer Ramani who is still at large. The duo reportedly made about $1.5 million running the insider trading scheme.

The trio was charged with conspiracy to commit wire fraud based on insider trading offenses in July.

Other insider trading charges

Recently, Nathaniel Chastain, former Head of product at OpenSea was indicted for insider trading charges. Chastain allegedly used his knowledge of confidential information to acquire dozens of NFTs at a relatively low price. 

In response, Chastain through his lawyers has filed for the dismissal of the indictment arguing that the charge was unprecedented and wire frauds were filed for categorized securities and commodities. The lawyers say NFTs are neither securities nor commodities.

Also, Thailand’s regulators fined Bitkub’s CTO Samreet Wajanasathian $234,000 for committing insider trading offenses while in possession of confidential information. He was banned from holding any executive position for the next one year.

Meanwhile, the SEC has reportedly launched a probe, requesting information from major exchanges in which they protect customers from insider trading.