According to a new report, Nikhil Wahi has pleaded guilty to counts of wire fraud conspiracy after being arrested for allegedly conspiring to engage in insider trading withing Coinbase using cryptocurrency with his brother and an associate
Ishan, Wahi’s brother, allegedly communicated information with his brother and an associate, Sameer Ramani, about the launch dates of tokens when Ishan was a product manager at Coinbase. By trading 25 different cryptocurrencies between 2021 and 2022, the trio allegedly earned gains of about $1.5 million by using their access to insider information.
Coinbase insider trading scandal
Reuters said Monday that Wahi admitted to authorities during a virtual hearing that he utilized confidential information received from Coinbase to profit from cryptocurrency trading.
“I knew that it was wrong to receive Coinbase’s confidential information and make trades based on that confidential information,” Wahi reportedly said in court.
In August, Ishan pled not guilty to wire fraud conspiracy and wire fraud charges. According to Reuters, Nikhil first pled guilty but changed his plea as part of a plea bargain with prosecutors.
Wahi and his brother were arrested and charged in July in Seattle, while Ramani was still at large at the time of writing but faces similar allegations.
SEC goes after Wahi brothers and associate
The Wahis and Ramani are accused of breaking securities law antifraud provisions in a separate case brought by the U.S. Securities and Exchange Commission (SEC) against the trio.
According to the same complaint, at least 9 of the 25 tokens used in the insider trading operation were “crypto asset securities” that fell under the SEC’s jurisdiction. A “regulation by enforcement” strategy, according to the case’s critics, was used by the regulator in this instance rather than waiting for legislation to define the SEC’s authority.