Brother of ex-Coinbase manager pleads guilty in insider trading case

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The brother of a former Coinbase (NASDAQ: COIN) manager has pleaded guilty to charges of wire fraud, the first such plea “in an insider trading case involving the cryptocurrency markets,” according to U.S. prosecutors.

Nikhil Wahi pleaded guilty to one count of conspiracy to commit wire fraud in connection with a scheme to commit insider trading before U.S. District Judge Loretta A. Preska in the Southern District of New York. This was a change from the not guilty plea he made a month ago.

Nikhil admitted to receiving tips about upcoming listings at Coinbase from his brother Ishan Wahi, a former product manager in charge of a listing team at the exchange. Between July 2021 and May 2022, Ishan would share tips with his brother on which tokens were set to be listed before the public announcement. Nikhil would purchase these tokens before their listing and sell them once they debuted on Coinbase. He and Sameer Ramani, who is still at large, made approximately $1.4 million from their venture.

Nikhil used wallets registered under other people’s names at centralized exchanges and transferred the profits to anonymous Ethereum blockchain wallets. As CoinGeek reported, Ishan Wahi pleaded not guilty to wire fraud charges with a scheme to commit insider trading, and unlike his brother, he has yet to change his plea. He is set to make his next court appearance on March 22.

Damian Williams, the U.S. Attorney for the Southern District of New York, warned insider traders in the digital asset world that just because they operate in a nascent industry doesn’t exempt them from financial laws.

“For the first time ever, a defendant has admitted his guilt in an insider trading case involving the cryptocurrency markets. Today’s guilty plea should serve as a reminder to those who participate in the cryptocurrency markets that the Southern District of New York will continue to steadfastly police frauds of all stripes and will adapt as technology evolves,” said Williams.

The 26-year-old Nikhil is staring at 20 years behind bars for his crime. His sentencing is set for December 13. During his plea hearing, his lawyer hinted at deportation back to India, saying that Nikhil was at peace with “losing everything that he has worked for,” Reuters reports.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.