• Nikhil Wahi, the brother of a former Coinbase manager, was sentenced to 10 months in prison for cryptocurrency insider trading.
• The case was first detected by a Twitter user named Cobie, who noticed an Ethereum address that had purchased tokens prior to the official announcement.
• The U.S Attorney General Damian Williams commented that the sentencing makes clear that the cryptocurrency markets are not lawless and that there are real consequences to illegal insider trading.
A man identified as Nikhil Wahi has been sentenced to prison for cryptocurrency insider trading by the United States Department of Justice. Wahi was charged with committing the crime in July 2022 alongside two other individuals.
This is the first sentencing related to a crypto insider trading case. Wahi traded in cryptocurrencies based on the information he received from his brother – Ishan Wahi, a former Coinbase product manager. According to the press release, Wahi pleaded guilty to conspiracy to commit wire fraud.
The case of insider trading was first detected by a Twitter user named Cobie. This drew the attention of the Federal Bureau of Investigation (FBI). Cobie had detected an Ethereum address that had purchased „hundreds of thousands of dollars of tokens“ that was going to be listed on Coinbase. Additionally, the purchase had taken place exactly 24 hours prior to the official announcement.
Once this came to light, Coinbase launched an official investigation and held a meeting with its team. Post this, Ishan Wahi tried to flee the country and tipped off his brother and friend about the investigation. However, law enforcement authorities stopped the attempt before he could board the plane. The investigation conducted by the FBI had revealed that Nikhil Wahi had purchased cryptocurrencies on the basis of the information he received from his brother.
As a result of this crime, Nikhil Wahi was sentenced to 10 months in prison. U.S Attorney General Damian Williams also commented on this situation, saying that “insider trading creates the impression that everything is rigged and that only people with secret advantages can make a real buck. Today’s sentence makes clear that the cryptocurrency markets are not lawless. There are real consequences to illegal insider trading.”
The sentencing of Nikhil Wahi marks the first instance of a real-life consequence for crypto insider trading. This case serves as a reminder to all involved in the cryptocurrency space that insider trading is illegal and will not be tolerated. It also serves as a reminder to be vigilant and to report any suspicious activities that one may come across.