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 cryptocurrency-related insider trading case.
As Reuters reported, Nikhil Wahi pleaded guilty in September to starting operations based on confidential information obtained from his brother, Ishan Wahi, who was a former product manager at Coinbase.
Ex-Coinbase manager’s brother sentenced to 10 months in insider trading case https://t.co/Kyy6DqSb9D pic.twitter.com/ruQjwr5i4h
— Reuters (@Reuters) January 10, 2023
Nikhil Wahi admitted to trading using inside information obtained from a Coinbase executive. 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 sentence of between 10 and 16 months for Nikhil Wahi, alleging that he had made nearly $900,000 in profits from his illegal actions. However, his defense attorneys suggested a different outcome, arguing that Nikhil’s motivation for committing the crime was to repay his parents for the money they had paid him for his university studies and that he had no criminal record.
Nikhil Wahi’s sentencing comes amid heightened scrutiny by US prosecutors and regulators of cryptocurrency companies and their executives.
On Jan. 4, Coinbase reached a settlement 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’s 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 issues with its user onboarding and transaction tracking process.
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 current crypto winter.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.