First Crypto Insider Trading Case Leads to 10-Month Sentence (1)

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The brother of a former Coinbase Global Inc. product manager was sentenced to 10 months behind bars for his role in a scheme to exchange inside information about when the cryptocurrency exchange was going to list new tokens .

Nikhil Wahi pleaded guilty in September to one count of conspiracy to commit wire fraud in what Manhattan U.S. Attorney Damian Williams called the first-ever insider trading case involving crypto markets. -currency. Prosecutors claim his brother’s advice allowed Wahi to trade nearly $900,000 with 40 different crypto tokens.

I made a huge mistake, a terrible mistake, Wahi told U.S. District Judge Loretta Preska on Tuesday. It’s something I will have to live with forever.

In addition to the jail sentence, Preska ordered Wahi to forfeit $892,500 he had earned from trades. He was also sentenced to two years probation.

Prosecutors had asked Preska to sentence Wahi to 16 months in prison. Wahi, who is being deported to India after serving his sentence, did not expect a prison sentence.

Wahi and his brother, former Coinbase employee Ishan Wahi, were both arrested in July. Ishan Wahi pleaded not guilty. Sameer Ramani, a friend of Ishan Wahi, was also charged. He was not being held in the United States and made no appearance in the case.

Defense attorney Priya Chaudhry told the judge Wahi was not motivated by greed, but by a desire to repay his Indian parents for his American college education and help them have a more comfortable retirement.

Chaudhry called his client an incredibly decent young man who did the wrong thing for the wrong reason.

A group of Wahis relatives attended the sentencing hearing, including his mother, who had traveled from India.

Coinbase, the largest US trading platform for digital currencies, allows users to buy and sell over 150 tokens, which can often see a flurry of interest immediately upon inclusion on the exchange. Prosecutors claim that between July 2021 and May 2022, Nikhil Wahi used anonymous Ethereum wallets to take advantage of advice from his brothers and purchase cryptocurrencies before Coinbase announced they were to be listed on an exchange.

The case is US v Wahi, 22-cr-392, US District Court, Southern District of New York (Manhattan).

(Adds details and comments from the court hearing.)

To contact the reporter on this story: Bob Van Voris in Manhattan Federal Court at [email protected]

To contact the editors responsible for this story: Misyrlena Egkolfopoulou at [email protected]

Steve Stroth

2023 Bloomberg LP All rights reserved. Used with permission.

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