Ishan Wahi – a former product manager at Coinbase gets sentenced to 2 years behind bars in the U.S. for providing insider trading information. On May 9, Reuters reported that the ex-manager was ordered to spend two years in federal prison for giving out confidential information.
The prosecution which was decided on May 9 sentenced him for taking part in a “massive abuse” of Coinbase trust. He was arrested back in July 2022 on the grounds of disclosing insider information about upcoming crypto listings at Coinbase to his brother.
Nikhil Wahi – Ishan’s brother got sentenced to 10 months in prison for instigating trades based on first-hand insider information. It was reported that the two men made over $1 million in profit trading with information from Ishan from June 2021 and April 2022.
At the time of his arrest, he admitted that his brother Ishan gave out the information to him and Sameer Ramani – a friend. Both brothers were arrested in January, but Ishan pleaded not guilty to the charges. Meanwhile, Sameer was outside the U.S.
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Ishan Wahi filed a lawsuit in January asking for the case against him to be dismissed. He maintained that the SEC did not have legal authority to classify tokens as securities.
Consequently, his lawyer argued that the assets and their holders were not a “common enterprise.” Since the tokens are not considered investment contracts, he argued that the charges for “insider trading” should not hold.
Following his guilty plea, Wahi agreed that he “made a huge mistake,” according to reports from Reuters. However, Assistant U.S. Attorney Noah Solowiejczyk argued by pointing out that the “mistake” stretched out 10 for months and is not just a “one-off.”
In his plea, Wahi asked the Court not to give him a sentence longer than his brother who was already sentenced to 10 months. Nikhil Wahi’s case, his lawyers were able to settle for the minimum sentence by claiming that he only committed the violations to “repay his college debt,” and that he was a first-time offender.
However, in his brother Ishan’s case, he was sentenced to two years in prison for seeking financial gain through deception. This would be the second crypto-related insider trading case handled by the Department of Justice (DOJ).