Coinbase’s Former Product Manager Sentenced to 2 Years For Insider Trading
On Tuesday, May 9th, the former product manager at Coinbase, Ishan Wahi, was sentenced to 24 months in prison for using insider knowledge when trading cryptocurrencies. Wahi also shared the information used for insider trading with his brother, Nikhil, and a friend, Sameer Ramani. The sentence is slightly shorter than the 3 years the prosecutors initially sought.
First Crypto Insider Trading Case Comes to an End
According to a report from Tuesday, Ishan Wahi, Coinbase Global’s former product manager was sentenced to two years in prison. Wahi used his knowledge of which tokens would be listed on the exchange to acquire them beforehand and sell them after they jump in value after appearing on Coinbase.
It is alleged that Ishan, as well as his brother Nikhil and friend Sameer Ramani, gained approximately $1.5 million through insider trading. The former product manager pleaded guilty earlier this year, and his brother has already received a 10-month sentence in January. Ramani is reportedly still at large.
Wahl was operating his insider trading scheme between 2021 and 2022 and has, in large part, been uncovered thanks to the transparency offered by blockchain technology itself. Additionally, Coinbase announced changes to its listing process in April 2022 to help prevent any future instances of insider trading.
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Major Crypto Insider Trading Cases Coming to A Close
The prosecutors reportedly consider this to be the first insider trading case involving cryptocurrencies. They have initially asked for a 3-year sentence to send a stronger message to others engaged in such activities. Additionally, the SEC allegations that the tokens Wahi was trading constitute unregistered securities are reportedly not yet resolved, though Coinbase itself remains adamant that it does not list securities.
Just weeks earlier, the first-ever insider trading case involving was concluded. On May 2nd, the former product manager at OpenSea, Nathaniel Chastain, was similarly convicted. He also misused his knowledge of which non-fungible tokens would be listed on the marketplace to buy them beforehand and sell them at a profit.
The cases against Wahi and Chastain are considered some of the highest-profile criminal cases involving digital assets. The last one, and arguably the biggest one at the time of writing, is the case against FTX’s former CEO Sam Bankman-Fried. SBF is expected to go to trial in October.
Editorial note (May 10th, 2023, 05:48 PM EST): The first subheading was altered for relevance.
Do you think Wahi should have received a 3-year sentence to better deter would-be crypto insider traders? Let us in the comments below.