For executing illicit trades ahead of at least 40 different Coinbase listing announcements, Nikhil Wahi entered a plea of guilty to one count of conspiracy to commit wire fraud.
Earlier this week, a U.S. District Judge sentenced Nikhil Wahi to 10 months in prison, bringing an important crypto criminal case to a close. Wahi, the brother of a former Coinbase product manager, was charged with conspiracy to commit wire fraud in what the prosecution referred to as the “first-ever cryptocurrency insider trading case” last July.
Wahi confessed to making a terrible mistake on Tuesday.
In September, Nikhil entered a guilty plea to that charge, acknowledging that his brother Ishan Wahi had misused his authority at one of the biggest cryptocurrency exchanges to divulge private information about asset listings. When a coin was ready to be posted on Coinbase, Ishan would notify Nikhil. And in response, Nikhil used an anonymous wallet to purchase shares of the cryptocurrency right before they appeared on the well-known exchange. According to a statement from the New York’s Southern District Attorney, Nikhil would sell the shares for a profit when the coin values ineluctably increased after listing, validated by their position on Coinbase.
According to prosecuting U.S. Attorney Damian Williams, Today’s sentencing clearly demonstrates that the crypto markets are not lawless.
Nikhil allegedly gained $892,500 in total by following his brother’s illegal advice and trading in advance of 40 different Coinbase announcements. Along with the additional 10 months of imprisonment, he was also sentenced to pay back the entire amount.
Nikhil Wahi told Loretta Preska, the judge, that it was something he would have to deal with indefinitely. Once his prison sentence is out, he will be deported back to India. The defense attorney for Nikhil alleged that her client’s motivation was to help his Indian parents out and pay them back for paying for his university education in the United States.
In connection with the insider trading scam, Ishan and a second individual, Sameer Ramani, a friend of Nikhil’s, are also being prosecuted. Ishan entered a not guilty plea to his accusation and was later granted bail in July. He still has a case. Ramani, in contrast, is not in American custody and is thought to be at large.
Williams, the prosecutor, stated that illicit insider trading has serious repercussions no matter where or when it takes place. However, a strong regulatory system is not made by one conviction and one sentence. This year, a crypto insider trading scam even made it to the sacred corridors of Congress. For his apparent unauthorized advanced knowledge of Let’s Go Brandon Coin’s failed sponsorship of NASCAR and his promotion of the meme coin, North Carolina Representative Madison Cawthorn was fined $15,000 by the House Ethics Committee. Criminal accusations against Cawthorn were dropped. Additionally, fraud and scams are rampant on the blockchain, as usual. Sam Bankman-Fried, CEO of FTX, will go on trial in October for fraud.
The Wahi brothers’ capture was largely the result of luck. Twitter user @cobie posted about a dubious Ethereum transaction. According to a story from The Verge, on April 12, @cobie tweeted, “Found an ETH address that bough hundreds of thousands of dollars’ worth of tokens exclusively highlighted in the Coinbase Asset Listing post roughly 24 hours before it was published.” The exchange was looking into it, said Coinbase’s chief security executive in response a day later. Similar abnormalities have been mentioned in other tweets, but no one has been detained as a result of those tweets.
