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Ex-Coinbase managerโ€™s brother sentenced to 10 months in insider trading case

January 10, 2023No Comments


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

What reported by Reuters, Nikhil Wahi pleaded guilty in September to initiate transactions based on confidential information obtained from his brother, Ishan Wahi, who was a product manager at Coinbase.

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

US prosecutors recommended a prison term of between 10 and 16 months for Nikhil Wahi, citing the fact that he had made nearly $900,000 in profits from his illegal actions. However, his defense attorneys suggested a different result, arguing that Nikhil's motivation for committing the crime was to pay his parents to pay for his college education and that he had no criminal record.

Related: Coinbase to Cut Another 20% of Its Workforce in Second Wave of Layoffs

Nikhil Wahi's sentencing comes amid heightened scrutiny by US prosecutors and regulators of cryptocurrency companies and their executives.

it's january 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 the NYDFS, Coinbase has agreed to pay a $50 million fine in response to violations of New York banking and financial services laws and also invest $50 million to fix its compliance program. The investigation revealed that Coinbase had several deficiencies related to anti-money laundering requirements and problems with its process for onboarding users and monitoring transactions.

Coinbase's woes seem to be continuing, as on January 10th, Coinbase CEO Brian Armstrong officially announced that Coinbase will cut 950 jobs as part of the company's moves to reduce the company's operating costs by around 25% amid the ongoing crypto winter.