- Nikhil admitted he had made trades based on confidential Coinbase information.
- Nikhil Wahi had earlier pleaded guilty in August but changed his plea through an agreement with prosecutors.
Nikhil Wahi, brother of Ex-Coinbase product manager Ishan Wahi, pleaded guilty on Monday to a wire fraud conspiracy charge in what U.S. prosecutors have termed as the first insider trading case involving cryptocurrency.
Nikhil had admitted before U.S. District Judge Loretta Preska in Manhattan that he had made trades based on confidential Coinbase information.
“I knew that it was wrong to receive Coinbase’s confidential information and make trades based on that confidential information,” Nikhil Wahi told the judge.
Per the Department of Justice’s latest statement, Nikhil implicated his brother Ishan Wahi and admitted to receiving tips from him. Nikhil later used numerous different crypto wallets in others’ names to anonymize his insider trading.
Commenting on the latest development, Damien Williams of the U.S. Attorney’s Office said “Today’s guilty plea should serve as a reminder to those who participate in the cryptocurrency markets that the Southern District of New York will continue to steadfastly police frauds of all stripes and will adapt as technology evolves.”
Nikhil Wahi had pleaded guilty in August but changed his plea through an agreement with prosecutors. His sentencing will be in December.
Former Coinbase Global product manager Ishan Wahi, his brother Nikhil Wahi and their friend Sameer Ramani were charged by the U.S. for benefiting from a cryptocurrency insider trading scheme in late July.
While he was working at Coinbase, Ishan allegedly shared insider information of upcoming Coinbase listing announcements with his brother and Sameer to then profit from the listings by purchasing the tokens before they went live on Coinbase.
Prosecutors state Nikhil Wahi and Ramani used ETH blockchain wallets to acquire the assets and traded at least 14 times before Coinbase announcements in June 2021 and in April 2022.
The announcements caused the assets to rise in value and generated around $1.5 million in illicit gains.
In August, Ishan had pled not guilty to the DOJ’s charges. Despite being a well-renowned Crypto exchange platform, Coinbase was accused of having a “serious insider trading problem” by three academics in an August report titled “Insider Trading in Cryptocurrency Markets.”