Nikhil Wahi, the brother of Coinbase’s former Product Manager, pled guilty to a wire fraud conspiracy charge in connection with an alleged insider trading scam in a first-of-its-kind case.
According to the Department of Justice, Nikhil acknowledged to making transactions based on prior insider knowledge before a Manhattan Federal Court during a virtual hearing.
As he awaits sentencing by a Judge in December, Nikhil faces up to 20 years in prison and forfeiture of income from the illegal enterprise.
The first-ever guilty plea to cryptocurrency wire fraud
The case will set a precedent because it is the first insider trading case involving cryptocurrencies, according to US authorities, making Nikhil the first person to plead guilty to insider trading charges.
According to the prosecution, the case should serve as a deterrence to criminal cryptocurrency dealers. It stated that regulators will continue to regulate all types of fraud and will adapt to technological advancements.
With Nikhil’s guilty plea and the new development, it is unclear how Ishan Wahi’s case would go after he pled not guilty to the US Department of Justice’s accusation in August. His next court appearance is slated for March 2023.
Ishan Wahi is accused of utilizing his trading position to predict which coins would be featured on Coinbase. He then informs his brother and another partner, Sameer Ramani, who is still at large. The pair allegedly gained $1.5 million from the insider trading operation.
In July, the three were charged with conspiracy to conduct wire fraud based on insider trading violations.
Other charges of insider trading
Nathaniel Chastain, former Head of Product at OpenSea, was recently charged with insider trading. Chastain allegedly used his access to private information to obtain dozens of NFTs at a low cost.
In response, Chastain’s attorneys filed a motion to dismiss the indictment, claiming that the charge was unprecedented and that wire fraud were filed for both securities and commodities. According to the lawyers, NFTs are neither securities nor commodities.
In addition, Bitkub’s CTO Samreet Wajanasathian was penalized $234,000 by Thai regulators for insider trading while in possession of secret information. For the next year, he was barred from holding any executive post.
Meanwhile, the SEC is said to have initiated an investigation, demanding information from major exchanges on how they safeguard customers against insider trading.