A former employee of the large cryptocurrency exchange Coinbase has pled guilty to insider trading, making this the first case of its kind involving cryptocurrency-related illegal activity in the United States.
Ishan Wahi, a former product manager for Coinbase, has pleaded guilty to two counts of conspiracy to commit wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential information about cryptocurrencies scheduled to be listed on the platform, according to a press release issued by the Department of Justice on Tuesday. The scheme involved Wahi using information about cryptocurrencies scheduled to be listed on the platform that was deemed confidential.
According to the reports, the allegations against Wahi were first submitted to the federal court in the Southern District of New York in the month of July of the previous year. Damian Williams, the United States attorney for the Southern District of New York, stated that Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets. Williams added: “Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets.”
Theft of private company information for the purpose of personal gain or the gain of others is a severe federal offense, regardless of whether the theft takes place in the equities markets or the cryptocurrency markets.
The date of Wahi’s sentencing has been set for May 10th. According to Reuters, he faces a jail term of between 36 and 47 months as part of his plea agreement, even though each count carries a maximum punishment of 20 years in prison. However, the sentence he faces will be between 36 and 47 months.
According to the notification made by the DOJ, Wahi began working on the asset listings team at Coinbase around the beginning of October 2020. Because of this, he was granted access to information on the digital assets that are anticipated to be listed on the site.
The Department of Justice stated that Wahi leaked this information in order to help his brother Nikhil Wahi and friend Sammer Ramani buy tokens just before they were listed on the platform. This action resulted in “realized and unrealized gains totaling at least approximately $1.5 million,” according to the DOJ’s statement from the previous year.
Ramani has not been taken into custody at this time. In September, Nikhil Wahi entered a guilty plea to a charge of conspiring to commit wire fraud, and he was sentenced to ten months in jail only a few weeks ago.
Because it causes a surge in the price of the token, becoming listed on a major exchange is often considered to be highly essential in the cryptocurrency industry. Naturally, this also generates a significant incentive for the people working for cryptocurrency exchanges.
After an incident involving insider trading, Coinbase CEO Brian Armstrong addressed concerns over the listings of tokens on the controlled exchange. He outlined new steps with the goal of enhancing the processes for listing tokens and ensuring that there is no unfair advantage that can be taken advantage of.
To be more specific, he said that they will attempt to eliminate the capability of analyzing on-chain data as a means of estimating which tokens are on track to be distributed in the near future. Armstrong said that even while this data is accessible to the general public, only the most dedicated and experienced people would be tapping into it.
Compiled by Coinbold
