Former Coinbase Manager Ishan Wahi Pleads Guilty to Insider Trading

News | February 20, 2023 By:

On Tuesday, February 7, 2023, the United States Department of Justice reported that Ishan Wahi, former product manager at Coinbase Global, Inc., pled guilty to two counts of conspiracy to commit wire fraud in relation to an insider trading scheme using confidential Coinbase information about the crypto assets that will be scheduled to be listed on Coinbase’s platform exchange.

Damian Williams, U.S. Attorney said that Wahi admitted that he tipped others regarding the planned token listings by Coinbase so they could trade in crypto assets for a profit. “Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets.”, Williams added.

According to the press release:

“On multiple occasions between June 2021 and April 2022, WAHI violated his duties of trust and confidence to Coinbase by providing confidential business information that he learned in connection with his employment at Coinbase to Nikhil Wahi and Sameer Ramani so that they could secretly engage in profitable trades around public announcements by Coinbase that it would be listing certain crypto assets on Coinbase’s exchanges.  Following Coinbase’s public listing announcements, on multiple occasions, Nikhil Wahi and Ramani sold the crypto assets for a profit.”

On May 16, 2022, prior to boarding his flight to India, Wahi was stopped by law enforcement and prevented from leaving the country. He was thereafter charged and pled guilty on February 7, 2023, before U.S. District Judge Loretta A. Preska. Wahi is scheduled to be sentenced on May 10, 2023, by Judge Preska.

The Securities and Exchange filed its Complaint before the United States District Court for the Western District of Washington, Seattle Division on July 21, 2022, alleging Wahi to have repeatedly tipped material, nonpublic information about the timing and content of Coinbase’s “listing announcements” to his brother Nikhil as well as his close friend Sameer Ramani, which resulted to the Nikhil and Ramani earning at least $1.1 million in illicit profits.

The Commission sought for the Court to enter a Final judgment finding Wahi, Nikhil, and Ramani (defendants) violated the provisions of the federal securities law as alleged in the Complaint, permanently restraining the three from directly or indirectly, engaging in conduct in violation of Section 10(b) of the Exchange Act and Rule 10b-5. The Commission further prayed that the defendants pay civil penalties and disgorgement of the amount equal to the illicit profit the defendants obtained through Nikhil and Ramani’s trading.

On November 4, 2022, the Court entered an Order pursuant to the Parties’ Joint Stipulated Motion to Extend the Time to Respond and to Expand the Briefing Page Limits granting the motion giving the defendants until December 1, 2022, to file their Response to the Complaint and for the Commission to file their opposition until February 1, 2023, and for the Defendant’s Reply Brief to be filed on or before March 3, 2023. The parties were allowed to expand their respective briefs up to 75 pages, and the Order further provided that the discovery is stayed until January 21, 2023, unless otherwise ordered by the Court.

Source: United States Department of Justice