Former US Coinbase employee and two others charged with insider trading
theguardian.comA former Coinbase employee and two others have been charged in what federal authorities described as the US government’s first cryptocurrency insider trading case.
Ishan Wahi, a product manager at the cryptocurrency exchange, and his brother Nikhil Wahi were arrested in Seattle on Thursday. They and a third defendant, their friend Sameer Ramani, who remains at large, also face civil charges from the US financial watchdog, the Securities and Exchange Commission (SEC).
Prosecutors alleged that Ishan Wahi, 32, shared confidential information about forthcoming announcements of new cryptocurrency assets that Coinbase was planning or considering listing on its exchange. His brother and Ramani allegedly traded at least 14 times before such announcements between June 2021 and April 2022, prosecutors said.
Nikhil Wahi, 26, and Ramani, 33, used anonymous ethereum blockchain wallets to acquire the assets before Coinbase’s announcements and then sold those assets for a profit of at least $1.5m (£1.25m), prosecutors claimed.
Damian Williams, the US attorney for the southern district of New York, said Web3 – the catch-all term for the latest iteration of the internet – was not immune from the authorities. Last month he brought an insider trading case against a former employee of OpenSea, the largest marketplace for non-fungible tokens (NFTs).
“Today’s charges are a further reminder that Web3 is not a law-free zone,” Williams said. “Just last month, I announced the first ever insider trading case involving NFTs, and today I announce the first ever insider trading case involving cryptocurrency markets. Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street.”
Howard Fischer, a
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