Prison for the ex-Coinbase employee in Insider Trading Case

First, an employee from Coinbase was sentenced to two years in prison in an insider trading case. According to the report from Reuters, on Tuesday the accused pleaded guilty to the charges. 

The Allegations

Ishan Wahi was a former product manager at Coinbase, the controversial U.S. Crypto Based Organization. It is alleged that Ishan Wahi used his position as a manager to provide inside information on the upcoming Crypto Listings to two people, one of which included his brother. He was arrested in July 2022 and reportedly the men made over $1 million within the time period from April 2021 to June 2022.  

Nikhil Wahi, one of the two men involved in the case who’s also Ishan Wahi’s brother was sentenced to 10 months in Prison earlier this year in January. Wahi’s brother tried to fight the case pleading not guilty but at last pleaded guilty in September last year on the conspiracy of committing fraud. Ishan Wahi the main accused pleaded guilty in February this year on two counts of conspiracy to commit wire fraud as well.

Wahi used his advantage and knowledge as a product manager to know about the upcoming listings on the exchange and used the knowledge to make profits by buying and selling them quickly. During this time all the coins that used to list in the exchange used to shoot up quickly and the phenomenon was known as the “Coinbase Effect”.  

Insider Trading Case of ex-OpenSea Employee

This is the second case of Insider Trader regarding digital assets brought up by the Department of Justice (DOJ).

On May 3, ex-OpenSea employee Nathan Chastain received a guilty verdict in the first such case related to Insider Trading. Nathan Chastain was Head of Products at OpenSea when he was found guilty of using the information on NFTs to make money. He was convicted on two counts of money laundering and wire fraud. Although he hasn’t been sentenced yet he can face a maximum of 40 years in prison. 

Coming back to the Ishan Wahi case, the Indian National tried to flee the country when, when asked by Coinbase, informed the Department of Justice. Ishan was stopped by American officials to board a flight to India. 

U.S. Attorney Damian Williams said in a Tuesday statement that Wahi “violated the trust placed in him by his employer” by sharing the secret listings. He further added that everybody in the cryptocurrency market should understand that laws are applied to them as well. 

All three men involved were also charged with Civil Charges by the U.S. Securities and Exchange Commission.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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