Former Coinbase Manager Charged For Crypto Insider Trading Scandal

© Reuters Former Coinbase Manager Charged For Crypto Insider Trading Scandal

• The US SEC charged Coinbase (NASDAQ:COIN) ex-manager, and 2 others for breach of confidentiality.
• The trio perpetrated insider-trading of assets ahead of their listing Coinbase.
• The SEC have issued criminal charges against all three individuals.

The Securities and Exchange Commission (SEC) of the United States has charged Ishan Wahi, a former Coinbase product manager, his brother, and his friend for breach of confidentiality, which earned them over $1 million in illegal profit.

SEC mentioned in a statement issued recently that the trio perpetrated a scheme to trade ahead of multiple announcements regarding certain would-be-listed crypto assets on the Coinbase platform.

Today we announced insider trading charges against a former Coinbase product manager, his brother, and his friend for perpetrating a scheme to trade ahead of multiple announcements regarding certain crypto assets that would be made available for trading on the Coinbase platform.

— U.S. Securities and Exchange Commission (@SECGov) July 21, 2022

While Wahi worked at Coinbase, he coordinated the platform’s public listing announcements, including which cryptocurrencies would be made available for trading. By its governing rules, such information is confidential, and Coinbase warned its employees not to trade based on, or tip others with, that information.

However, between June 2021 to April 2022, Wahi breached his duties and repeatedly tipped the timing and content of upcoming listing announcements to his brother, Nikhil Wahi, and his friend, Sameer Ramani.

Ahead of those announcements, which usually increased the assets’ prices, Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets and then sold them shortly after the announcements for a profit. The long-running insider trading scheme generated illicit profits totaling over $1.5 million.

The SEC has accused Wahi of two conspiracy charges and two counts of wire fraud. Each carrying a possible 20-year sentence. The SEC’s complaint filed their case with the federal district court in Seattle, Washington. In a parallel action, the US Attorney’s Office for the Southern District of New York has announced criminal charges against all three individuals.

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