Ex-Coinbase manager's brother sentenced to 10 months in insider trading case

Published at: Jan. 10, 2023

The brother of a former Coinbase product manager, Nikhil Wahi, has been sentenced to 10 months in prison for wire fraud conspiracy charges, in what is believed to be the first insider trading case involving cryptocurrency. 

As reported by Reuters, Nikhil Wahi pleaded guilty in September to initiating trades based on confidential information obtained from his brother, Ishan Wahi, who was a former Coinbase product manager.

Ex-Coinbase manager's brother sentenced to 10 months in insider trading case https://t.co/Kyy6DqSb9D pic.twitter.com/ruQjwr5i4h

— Reuters (@Reuters) January 10, 2023

Nikhil Wahi admitted to trading with the use of inside information obtained from Coinbase. According to the federal prosecutors in Manhattan, Ishan Wahi, a former product manager, had shared confidential information regarding new digital assets that Coinbase was planning to add to its trading platform, with both his brother and their friend Sameer Ramani.

The U.S. prosecutors recommended a prison sentence of between 10 to 16 months for Nikhil Wahi, citing the fact that he had made almost $900,000 in profits from his illegal actions. However, his defense attorneys suggested a different outcome, arguing that Nikhil's motivation for committing the crime was to repay his parents for paying for his college education and that he had no prior criminal record. 

Related: Coinbase to cut another 20% of its workforce in the second wave of layoffs

The sentencing of Nikhil Wahi is taking place amid increased scrutiny from U.S. prosecutors and regulators toward cryptocurrency companies and their executives. 

On Jan 4, Coinbase reached an agreement with the New York State Department of Financial Services (NYDFS) following an investigation into the company's compliance program. According to NYDFS, Coinbase has agreed to pay a $50 million fine in response to violations of New York's financial services and banking laws and also to invest $50 million to correct its compliance program. The investigation revealed that Coinbase had various deficiencies related to anti-money laundering requirements and issues with its process for onboarding users and monitoring transactions.

Coinbase’s woes seem to continue, as on Jan 10, Coinbase CEO Brian Armstrong officially announced that Coinbase will cut 950 jobs as part of the company’s measures to reduce the firm’s operating costs by around 25% amid the ongoing crypto winter.

Tags
Technology
Blockchain
United States
Business
Cryptocurrency Exchange
Cryptocurrencies
Government
Related Posts
SEC Chair Gary Gensler responds to concerns about first Bitcoin-linked ETF
United States Securities and Exchange Commission Chair Gary Gensler and ProShares head of investment strategy Simeon Hyman discussed the launch of the first Bitcoin-linked exchange-traded fund (ETF) with CNBC on Tuesday. ProShares Bitcoin Strategy ETF, also known as BITO, is based on CME Bitcoin (BTC) futures contracts. CNBC commentator Bob Pisani shared concerns from some investors that BTC futures could deviate from the BTC spot price. “The futures market is a better place for price discovery,” said Hyman. “The CME futures market trades more volume than the largest U.S. crypto exchange. We launched a similar mutual fund on 7/28, and …
Adoption / Oct. 19, 2021
Injecting Apple-like ‘quality-control’ into DeFi is what we need
If you’re an Apple App Store user, then you’re probably aware of the recent legal drama surrounding the updates to the App Store guidelines. It’s a reasonably open secret that the App Store is designed to be at its core, more difficult for app developers to deploy their apps on than competitors' offerings, pushing for a “quality over quantity” environment to protect its user base. With this push by Apple, we have just witnessed with the hammer coming down on the conservative social media app Parler following in the footsteps of Twitter and Facebook permanently banning former-U.S. President Donald Trump …
Technology / Jan. 26, 2021
3 Common Compliance and Regulatory Pitfalls to Watch for in 2020
Regulations are not going anywhere. On the contrary, financial service providers face more regulatory challenges and higher costs than ever before. During the early days of cryptocurrencies, a “Wild West” culture emerged when regulators, uncertain on how to tackle this thing called blockchain, paid little attention to the thefts, scams and hacks plaguing the virtual-asset market. Today, this is no longer the case. No matter their roots, every virtual asset project from Telegram to Shapeshift to Libra is ramping up compliance while regulators continue to issue guidance, enforce regulations and pay closer attention to digital securities platforms, crypto exchanges and …
Technology / May 30, 2020
Blockchain will thrive once innovators and regulators work together
There is often a perceived tension between regulation and innovation. A pervasive narrative has emerged that these two important parts of our society are at odds with each other. In reality, it’s when these two come together as partners that we can effect change and transform our world for the better. Nowhere is this more true than in the blockchain industry. Over the last few months, we’ve seen seemingly reactionary regulators in different parts of the world try to formulate new rules and guidance in silos, without sufficient input from the key stakeholders most knowledgeable about the technology — the …
Technology / May 15, 2021
Crypto Bahamas: Regulations enter critical stage as gov't shows interest
The crypto community and Wall Street converged last week in Nassau, Bahamas, to discuss the future of digital assets during SALT’s Crypto Bahamas conference. The SkyBridge Alternatives Conference (SALT) was also co-hosted this year by FTX, Sam Bankman-Fried’s cryptocurrency exchange. Anthony Scaramucci, founder of the hedge fund SkyBridge Capital, kicked off Crypto Bahamas with a press conference explaining that the goal behind the event was to merge the traditional financial world with the crypto community: “Crypto Bahamas combines the crypto native FTX audience with the SkyBridge asset management firm audience. We are bringing these two worlds together to create a …
Adoption / May 3, 2022