- Wahi was handed a 10-month jail term in an order issued by U.S. District Judge.
- The U.S. government claims that the three of them stole $1.1 million.
The brother of a former Coinbase employee was found guilty of his part in an insider trading conspiracy involving cryptocurrencies. To one count of conspiracy to commit wire fraud, Nikhil Wahi, brother of former Coinbase product manager Ishan Wahi, pled guilty in September. Wahi was handed a 10-month jail term in an order issued by U.S. District Judge Loretta Preska on January 4.
Ishan Wahi, a former employee of Coinbase in San Francisco, was accused by prosecutors last year of sharing insider knowledge about the exchange’s plans to sell new tokens with his brother Nikhil Wahi and a mutual acquaintance, Sameer Ramani.
Exploited Coinbase Effect
Prosecutors allege that Wahi’s brother and Ramani exploited this information to acquire tokens before Coinbase announced their listings and then sold them for a profit. There is a phenomenon known as the “Coinbase effect” where the value of digital assets on Coinbase increases when the exchange makes the announcement of their availability. Prosecutors in the United States are calling this the first instance of insider trading utilizing cryptocurrencies.
The U.S. government claims that the three of them stole $1.1 million. Over the alleged plan, the SEC has also filed civil charges against the three. A not-guilty plea was entered on behalf of Ishan Wahi. In the United States, the most popular platform for buying and selling digital currency is Coinbase, a publicly listed corporation. As a result of “ongoing market conditions,” the firm has announced further layoffs recently.
The prosecution claims that using his brother’s insider knowledge, Wahi amassed about $900,000 by trading 40 different digital assets.
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