A former Coinbase product executive pleaded guilty Tuesday in what U.S. prosecutors are calling the first cryptocurrency insider trading case, his defense attorney said in a court hearing.
Ishan Wahi, 32, pleaded guilty to two counts of wire fraud conspiracy after initially pleading not guilty last year.
Prosecutors said Wahi shared confidential information with his brother Nikhil and their friend Sameer Ramani about upcoming new digital asset announcements coin base would let users act.
“I knew that Sameer Ramani and Nikhil Wahi would use this information to make trading decisions,” Ishan Wahi said during Tuesday’s hearing in federal court in Manhattan. “It was wrong to misuse and distribute Coinbase property.”
Nikhil Wahi and Ramani were accused of consumption ether Blockchain wallets to acquire digital assets and trade at least 14 times ahead of Coinbase announcements between June 2021 and April 2022.
The announcements typically increased the value of assets and generated at least US$1.5 million (about Rs.12 billion) in illicit profits, prosecutors said.
Nikhil Wahi pleaded guilty to charges of conspiracy to wire fraud in September and was sentenced to 10 months in prison in January. Ramani is at large.
As part of a plea deal, prosecutors determined that sentencing guidelines called for Ishan Wahi to be imprisoned for between 36 and 47 months. US District Judge Loretta Preska has scheduled her hearing on the verdict for May 10.
Coinbase is one of the world’s largest cryptocurrency exchanges. The company shared its findings from an internal probe into prosecutors’ dealings.
On Monday, Ishan Wahi asked a judge to dismiss a parallel lawsuit brought by the Securities and Exchange Commission (SEC), saying the charges constitute an “abuse of power” by the agency. It is disputed whether nine tokens listed on Coinbase were actually securities and subject to SEC regulation.
A spokesman for the SEC declined to comment.
Ishan Wahi pleaded guilty to the criminal charges on Tuesday, saying he does not believe the relevant tokens are securities. Noah Solowiejczyk, a prosecutor, said the question of whether the tokens were securities or not was not an element of the prosecution’s process.
© Thomson Reuters 2023
Cryptocurrency is an unregulated digital currency, not legal tender and is subject to market risks. The information provided in this article is not intended to and does not constitute financial advice, trading advice, or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV is not responsible for any loss arising from any investment made on an accepted recommendation, forecast or other information contained in this article.
