Damian Williams, the United States Attorney for the Southern District of New York, today announced that ISHAN WAHI, former chief product officer at Coinbase Global, Inc. (“Coinbase”), has pleaded guilty to two counts of charge of conspiracy to commit wire fraud in connection with a scheme to engage in insider trading in cryptocurrency assets using confidential Coinbase information about crypto assets that were to be listed on exchanges from Coinbase. WAHI was arrested and charged in July 2022 and pleaded guilty earlier in the day before U.S. District Judge Loretta A. Preska.
US Attorney Damian Williams said: “Ishan Wahi – a former Coinbase product manager – admitted in court today that he had tipped others regarding Coinbase’s planned token listings so that they can trade crypto assets for profit.Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets. cryptography, the theft of confidential business information for your personal gain or that of others is a serious federal crime. The Southern District of New York has decades of experience in prosecuting cases of insider trading, and we We will continue to use our expertise to prosecute this crime, whatever form it takes and wherever it occurs.
According to the allegations contained in the Indictment and statements made in public hearings:
At all relevant times, Coinbase was one of the largest cryptocurrency exchanges in the world. Coinbase users can acquire, trade, and sell various crypto assets through online user accounts with Coinbase. Periodically, Coinbase added new crypto assets to those that could be traded through its exchange, and the market value of crypto assets usually increased significantly after Coinbase announced that it would list a particular crypto asset. Accordingly, Coinbase has kept this information strictly confidential and has prohibited its employees from sharing this information with others, including providing a “tip” to anyone who may trade based on this information.
Starting around October 2020, ISHAN WAHI worked at Coinbase as a Product Manager assigned to a Coinbase asset listing team. In this role, WAHI was involved in the highly confidential process of listing crypto assets on Coinbase exchanges and had detailed and advanced knowledge of the crypto assets Coinbase planned to list and the timing of public announcements regarding these listings. crypto assets.
On several occasions between June 2021 and April 2022, WAHI breached his duty of confidence to Coinbase by providing confidential business information he learned through his employment at Coinbase to Nikhil Wahi and Sameer Ramani so that they could secretly engage in profitable transactions. around Coinbase’s public announcements that it would list certain crypto assets on Coinbase exchanges. Following Coinbase’s public listing announcements, on several occasions, Nikhil Wahi and Ramani sold the crypto assets at a profit.
On April 12, 2022, a well-known Twitter account in the crypto community tweeted about an Ethereum blockchain wallet “that purchased hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing approximately 24 hours prior to its release. “. The business activity referenced in the April 12 tweet was activity previously conducted by Ramani based on advice provided by WAHI. Coinbase subsequently responded publicly on Twitter, noting that it had already begun to investigate the matter and, weeks later, stated in a public blog post that any Coinbase employee who discloses confidential company information would be “immediately fired and referred to the appropriate authorities (potentially for criminal prosecution). in-person meeting regarding Coinbase’s asset listing process at the Coinbase office in Seattle, Washington on May 16, 2022. WAHI has confirmed that he will be attending the meeting.
On the evening of May 15, 2022, WAHI purchased a one-way flight to India which was due to depart the next day shortly before WAHI was supposed to be interviewed by Coinbase. In the hours between booking the flight and its scheduled departure, WAHI called and texted Nikhil Wahi and Ramani about the Coinbase investigation and sent them both a picture of the messages he had received. on May 11, 2022 from Coinbase’s Director of Security Operations. Before boarding the May 16, 2022 flight to India, WAHI was arrested by law enforcement and prevented from leaving the country.
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ISHAN WAHI, 32, of Seattle, Washington, pleaded guilty to two counts of conspiracy to commit wire fraud, each carrying a maximum sentence of 20 years in prison, respectively.
The maximum legal sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. WAHI is to be sentenced by Judge Preska on May 10, 2023 at 12:00 p.m.
Mr Williams praised the investigative work of the Federal Bureau of Investigation. He also acknowledged the assistance of the Justice Department’s National Cryptocurrency Enforcement Team, as well as that of the Securities and Exchange Commission, who separately filed civil lawsuits against WAHI.
This matter is being handled by the Bureau’s Securities and Commodities Fraud Task Force. Assistant US Attorneys Noah Solowiejczyk and Nicolas Roos are charged with the prosecution.
