(Bloomberg) — The brother of a former Coinbase Global Inc. product manager was sentenced to 10 months behind bars for his role in a scheme to trade on inside information about when the cryptocurrency exchange was going to list new tokens.
(Bloomberg) — The brother of a former Coinbase Global Inc. product manager was sentenced to 10 months behind bars for his role in a scheme to trade on inside information about when the cryptocurrency exchange was going to list new tokens.
Nikhil Wahi pleaded guilty in September to a count of conspiracy to commit wire fraud in what Manhattan US Attorney Damian Williams called “the first ever insider trading case involving cryptocurrency markets.” Prosecutors claim tips from his brother enabled Wahi to make almost $900,000 trading in 40 different crypto tokens.
“I made a huge mistake, a terrible mistake,” Wahi told US District Judge Loretta Preska on Tuesday. “It’s something that I will have to live with forever.”
In addition to the prison sentence, Preska ordered Wahi to forfeit $892,500 he made from the trades. He was also given two years probation.
Prosecutors had asked Preska to sentence Wahi to as much as 16 months in prison. Wahi, who is subject to deportation to India after he’s served his sentence, was hoping for no jail time.
Wahi and his brother, former Coinbase employee Ishan Wahi, were both arrested in July. Ishan Wahi has pleaded not guilty. Sameer Ramani, a friend of Ishan Wahi, was also charged. He was not in US custody and hasn’t made an appearance in the case.
Defense lawyer Priya Chaudhry told the judge that Wahi wasn’t motivated by greed, but by a desire to repay his Indian parents for his US college education and help give them a more comfortable retirement.
Chaudhry called her client “an incredibly decent young man who did the wrong thing for a misguided reason.”
A group of Wahi’s relatives attended the sentencing hearing, including his mother, who had traveled from India.
Coinbase, the largest US trading platform for digital currencies, allows users buy and sell more than 150 tokens, which can often see a rush of interest immediately after they are included on the exchange. Prosecutors claim that, between July 2021 and May 2022, Nikhil Wahi used anonymous Ethereum wallets to take advantage of his brother’s tips and buy cryptocurrencies before Coinbase announced they were to be listed on the exchange.
The case is US v Wahi, 22-cr-392, US District Court, Southern District of New York (Manhattan).
(Adds details and comment from court hearing.)
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