A former product manager at Coinbase has pleaded guilty to two counts of conspiracy to commit wire fraud in what’s believed to be the first crypto-related insider trading case in the US. Ishan Wahi initially pleaded not guilty last year.
Federal prosecutors claim that, on at least 14 occasions, Wahi shared confidential information with his brother Nikhil Wahi and friend Sammer Ramani about cryptocurrencies that Coinbase was planning to let its users trade so the pair could buy them in advance. Once Coinbase announced that it would list the tokens, their values rose. Nikhil Wahi and Ramani are said to have then sold the assets to make a profit. The scheme allegedly generated north of $1.5 million in ill-gotten gains.
Ramani has not been apprehended. Nikhil Wahi pleaded guilty to a wire fraud conspiracy charge in September and was last month sentenced to 10 months in prison. Ishan Wahi faces a prison sentence of between 36 and 47 months as part of his plea deal, according to Reuters. He’ll be sentenced in May.
Along with the criminal charges, Wahi faced a civil lawsuit from the Securities and Exchange Commission. He asked a judge this week to dismiss the suit, having claimed that the cryptocurrency tokens in question are not securities, meaning they would not be subject to SEC regulation.