Key takeaways:
- The brother of a former employee of Coinbase is accused of profiting from an insider trading scheme and has been given 20 years to pay back the money.
- Nikhil was ordered to hand over these cash to the US authorities as part of his sentence.
Coinbase is expected to get $470,000 in restitution from Nikhil and Ishan Wahi to cover “five grand jury subpoenas requests (including subparts) for documents and information” as well as lost wages of employees who were obligated to concentrate on the Department of Justice’s Special Investigations and Security Departments investigation.
As the first cryptocurrency-related insider trading case, this one establishes a precedent. The verdict in this case could have significant repercussions for upcoming judicial proceedings given the cryptocurrency industry’s explosive expansion. The Wahi brothers have received backing from the Blockchain Association, a prominent industry group, underscoring the significance of the case.
Ishan Wahi, the brother of the former product manager, is accused of giving Nikhil secret information about fresh cryptocurrency listings. Nikhil has been sentenced to surrender $892,500 in profit from these deals, according to the prosecution, to the US government.
Coinbase was referred to as a “victim” of Wahi’s offences during proceedings in Manhattan federal court by Judge Loretta Preska, who made the decision.
Previously, in January, Nikhil Wahi was given a 10 month prison term.
Last Monday, the exchange’s solicitors sent a letter to the courts requesting reimbursement for costs associated with the Department of Justice’s inquiry into the suspected insider traders.
“The defendant shall make installment payments towards restitution while serving the term of incarceration and may do so through the Bureau of Prison Inmate Financial Responsibility Plan. The court document stipulates that any unpaid debt upon release from prison will be paid in monthly instalments on the 15th that equal at least 10% of the defendant’s gross income.
The document states that Nikhil Wahi, the brother of former Coinbase product manager Ishan Wahi, will be required to pay restitution while serving a prison sentence. Nearly $500,000 must be paid back in full within 20 years after Nikhil’s release and covers Coinbase’s legal expenses related to the Department of Justice investigation.
Not only Coinbase but other well-known names in the cryptocurrency sector are having problems with regulators over claims of insider trading.
Just two weeks ago, $2 million in funds linked to a supposed insider trader were reportedly blocked by Binance, one of the largest cryptocurrency exchanges in the world. In response to a tweet from cryptocurrency and financial researcher FatMan, CZ, the CEO of Binance, made the announcement.
