2 Indians, 1 Indian American Charged in First Ever Cryptocurrency Insider Trading Tipping Scheme
- Former Coinbase employee Ishan Wahi allegedly tipped his brother and friend regarding crypto assets that were going to be listed on Coinbase exchanges.
Two Indian citizens and an Indian American have been charged in the first-ever cryptocurrency insider trading tipping scheme, the Department of Justice announced last week. Ishan Wahi, 32, a former product manager at Coinbase, one of the largest cryptocurrency exchanges in the world, and his brother Nikhil Wahi, 26, and friend Sameer Ramani, 33 were charged with “wire fraud conspiracy and wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information about which crypto assets were scheduled to be listed on Coinbase’s exchanges,” the July 21 DoJ press release said. The Wahi brothers were arrested in Seattle, Washington, while Ramani remains at large.
According to the DoJ, Ishan Wahi worked at Coinbase as a product manager assigned to the asset listing team, beginning October 2020. “In that role, he was involved in the highly confidential process of listing crypto assets on Coinbase’s exchanges,” the DoJ said. Thus he had “a detailed and advanced knowledge of which crypto assets Coinbase was planning to list and the timing of public announcements about those listings.”
Additionally, in August 2021 to May 2022, Ishan Wahi was a member of a private Coinbase messaging channel reserved for a small number of its employees with direct involvement in the asset listing process. The private channel was used to discuss, among other things, “exact announcement / launch dates + timelines” that the company did not wish to share with all of its employees, the DoJ said.
He then misappropriated that Coinbase confidential information by tipping either his brother, Nikhil Wahi, or his friend Ramani, so they could place profitable trades in those crypto assets in advance of the public listing announcements. They collectively traded shortly in advance of at least 14 separate Coinbase public listing announcements concerning at least 25 different crypto assets, and generated realized and unrealized gains totaling at least approximately $1.5 million, the DoJ said.
To conceal their purchases of crypto assets in advance of Coinbase listing announcements, they used accounts at centralized exchanges held in the names of others, and transferred funds, crypto assets, and proceeds of their scheme through multiple anonymous Ethereum blockchain wallets.
Ishan Wahi is charged with two counts of wire fraud conspiracy and two counts of wire fraud, each of which carries a maximum sentence of 20 years. Nikhil Wahi is charged with one count of wire fraud conspiracy and one count of wire fraud, each of which carries a maximum sentence of 20 years. Ramani of Houston, Texas, is charged with one count of wire fraud conspiracy and one count of wire fraud, each of which carries a maximum sentence of 20 years.