In what is believed to be the first case of cryptocurrency-related insider trading in the United States, a former product manager at Coinbase has pleaded guilty to two counts of conspiracy to commit wire fraud. The charges stem from an alleged scheme to defraud investors through the use of wire transfers. In the beginning of the year, Ishan Wahi entered a not guilty plea.
Federal prosecutors claim that Wahi shared confidential information about cryptocurrencies that Coinbase was planning to let its users trade on at least 14 separate occasions with his brother Nikhil Wahi and friend Sammer Ramani so that the three of them could buy them in advance.
This information was allegedly shared so that Wahi’s brother could trade them. The value of the tokens increased after Coinbase made the announcement that it would list them. It is believed that Nikhil Wahi and Ramani then sold the assets in order to earn a profit. According to the allegations, the scam resulted in ill-gotten earnings of more than $1.5 million.
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 just a few weeks ago.
According to Reuters, the terms of Ishan Wahi’s plea deal call for him to serve a prison term that is somewhere between 36 and 47 months. In May, he will be given his punishment.
In addition to the criminal allegations, Wahi was also facing a civil case brought on by the Securities and Exchange Commission (SEC). This week, he requested a judge to throw out the lawsuit on the grounds that the cryptocurrency tokens in question are not securities.
If this is true, then they are not subject to regulation by the Securities and Exchange Commission (SEC).
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