The United States Department of Justice (DOJ) announced on Monday that Nikhil Wahi, brother of a former Coinbase manager, has pleaded guilty to wire fraud conspiracy and wire fraud charges in connection with a scheme to commit insider trading in cryptocurrencies.
U.S. Charges Nikhil Wahi and Others
The DOJ charged Nikhil Wahi, his brother Ishan Wahi, a former product manager at Coinbase, and their friend Sameer Ramani in July with wire fraud and insider trading.
The department alleged that while employed at Coinbase, Ishan Wahi shared confidential information with his brother and friend about new crypto assets that are going to be listed on Coinbase.
After receiving tips, Nikhil Wahi and Ramani then used Ethereum blockchain wallets to acquire crypto assets before Coinbase’s official listing announcement, the department said.
The DOJ alleged that before Coinbase’s official listing announcement, the defendants bought 25 different crypto assets on at least 14 occasions, netting approximately $1.5 million in profits.
Nikhil Wahi Pleads Guilty
Per the latest announcement, Nikhil Wahi has now admitted before the Court that he made trades based on confidential Coinbase information.
“Less than two months after he was charged, Nikhil Wahi admitted in court today that he traded in crypto assets based on Coinbase’s confidential business information to which he was not entitled. For the first time ever, a defendant has admitted his guilt in an insider trading case involving the cryptocurrency markets,” U.S. Attorney Damian Williams said.
Nikhil Wahi pleaded guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. However, this is only speculation as the sentencing of the defendant is to be determined by a judge. His sentencing will be decided on December 13.
Ishan Wahi has pleaded not guilty while Ramani is still at large. Ishan Wahi is scheduled to appear in Court on March 22.
Meanwhile, following the case, the United States Securities and Exchange Commission (SEC) launched a separate probe into Coinbase, alleging that nine of the crypto assets traded in the alleged scheme are securities.
However, Paul Grewal, Coinbase’s chief legal officer, responded to the SEC, saying that the exchange does not list securities on its platform.
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