The United States Department of Justice has announced the charging of Ishan Wahi, a former Product Manager at Coinbase Exchange by Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation.
Ishan was charged alongside his brother Nikhil Wahi and Sameer Ramani and while the Wahi brothers have been arrested by the authorities, the DoJ confirmed that Ramani is still very much at large. The trio was charged with conspiracy to commit wire fraud based on insider trading offenses.
As detailed, Ishan used his level and access as a Product Manager at Coinbase with first-hand knowledge of new coins/tokens that were planned to be listed on the Coinbase platform which he shared with Nikhil and Sameer. The trio used the confidential information received to trade as many as 14 coins which they bought shortly before Coinbase puts out an announcement that it was listing such coins.
After recording an appreciable gain on these tokens, the culprits then typically sell them to earn profit.
How the Scheme Got Unveiled
The scheme was busted when a Twitter account shared the observation that an account bought a large amount of a coin/token that Coinbase said it was about to list. Coinbase launched an investigation that finally lead to the identification of Ishan.
“Today’s charges are a further reminder that Web3 is not a law-free zone,” said U.S. Attorney Damian Williams who has led many enforcement actions recorded in the Web3.0 ecosystem, “Just last month, I announced the first ever insider trading case involving NFTs, and today I announce the first ever insider trading case involving cryptocurrency markets. Our message with these charges is clear: fraud is fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them.”
For the charges levied against the trio, each of them stands the risk of facing up to 20 years in Prison, however, the DoJ said the final sentencing will only be provided by a Judge and that the 20 years is just a guide.