Former Coinbase Employee Guilty of Insider Trading, Faces Sentencing in May
• Former Coinbase employee, Ishan Wahi, has plead guilty to two counts of conspiracy to commit wire fraud in an insider trading case.
• This is the first time ever that something like this has been seen in the financial crime books.
• Ishan’s brother and a friend had also been charged with similar accusations and were given a financial penalty and jail time respectively.
Former Coinbase Employee Guilty of Insider Trading
The Department of Justice (DOJ) recently reported that Ishan Wahi, a former product manager at Coinbase, pleaded guilty to two counts of conspiracy to commit wire fraud in what was arguably the first-ever insider trading case surrounding crypto. The scheme began more than two years ago in October 2020.
Brother Found Guilty for Insdier Trading
Ishan’s brother and a friend were also involved in purchasing tokens prior to their listings on Coinbase, expecting that their prices would spike when listed. The brother was hit with a financial penalty of just under $900,000 as well as being ordered to serve roughly ten months in prison for his part in the scheme.
Now that Ishan has pled guilty, it is likely he will be required to serve more time due to his closer connections with Coinbase and instigation of the plan. U.S. Attorney Damian Williams expressed concerns over the seriousness of this type of crime taking place within both equity markets or crypto markets: “Whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime.“
Impact on Coinbase
The fallout from this situation has been tough for Coinbase as they have faced many accusations regarding insider trading during these past few years. However, they have denied any wrong doing on their part claiming all staff members are subject to strict compliance procedures when handling confidential customer data and company information.
Sentencing Date Set
Ishan will be sentenced in May 2023 for his role which could lead up to 20 years imprisonment as stipulated by Federal law if found guilty beyond reasonable doubt due to engaging in illicit activities such as insider trading using non-public information about Coinbase customers and operations