Former Coinbase Employee Guilty of Insider Trading; Will Be Sentenced in May

Not that long ago, Live Bitcoin News published an article talking about how the brother of a former Coinbase employee was found guilty of insider trading in what was arguably the first-ever insider trading case surrounding crypto. Now, it looks like the actual employee – who orchestrated the scheme – has pleaded guilty to charges similar with those presented to his sibling, and he’s set to be sentenced in roughly two months.

Former Coinbase Employee to Be Sentenced in Two Months

The Department of Justice (DOJ) oversaw the case at hand and said that Ishan Wahi, a former product manager at Coinbase, was given specific data regarding which tokens were set to be listed on the popular trading platform. This, he knew, would ultimately cause their prices to rise. He then got his brother and a friend involved in purchasing the tokens prior to their listings. From there, when their prices would spike, they would sell the assets at a profit and boost the strength of their portfolios.

This is classic insider trading, which we normally witness in the stock chamber (take a look at Nancy Pelosi and her husband and you’ll understand this better). However, this time around, it occurred within the bounds of the crypto arena, and it’s the first time something like this has ever been recorded in the financial crime books.

The scheme began more than two years ago in October of 2020. Back in January, Nikhil – the brother of Wahi – was hit with a financial penalty of just under $900,000. He was also ordered to serve roughly ten months in prison. This was just the brother of the former employee, who was likely an underling in the scam. Now that Ishan has pled guilty, it’s plausible to assume he’ll be required to serve more time as he had closer connections to Coinbase and was the likely instigator of the plan.

At the time of writing, he has pled guilty to two counts of conspiracy to commit wire fraud. U.S. Attorney Damian Williams – who presided over the court case – explained in a recent statement:

Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets. Whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime.

A Tough Time for the Exchange

Coinbase has had a very bad run of things lately. The company – which arguably stands as the biggest and most popular digital currency exchange in the U.S. – has been hit hard by the ongoing crypto winter and has been forced to let go of several staff members on two separate occasions: once last summer, and again just over a month ago.

The company also had to pay huge penalty fees in a court settlement to New York regulators.

Tags: coinbase, insider trading, Ishan Wahi