A former Coinbase product manager is one of three people to be charged in the first ever cryptocurrency insider trading tipping scheme.
Ex-Coinbase man Ishan Wahi, his brother Nikhil Wahi and friend Sameer Ramani have been charged by US prosecutors with wire fraud conspiracy and wire fraud. The brothers have been arrested in Seattle, while Ramani remains at large.
Ishan Wahi worked as a product manager assigned to a Coinbase asset listing team and, between August 2021 and May 2022, was a member of a private messaging channel reserved for a small number of 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 Coinbase did not wish to share with all of its employees.
According to prosecutors, on at least 14 occasions Wahi passed on this confidential information to either his brother or friend. The three would then use anonymous Ethereum blockchain wallets to acquire crypto shortly before Coinbase publicly announced that it was listing or considering listing these assets on its exchanges.
Following the public listing announcements, they made sales, generating realised and unrealised gains totalling at least $1.5 million, say prosecutors.
In April, after a Twitter account raised suspicions about trades, Ishan Wahi was emailed by Coinbase's director of security operations informing him that he should appear for an in-person meeting. Wahi bought one way ticket to India but was stopped by law enforcement prior to boarding.
US Attorney Damian Williams says: "Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street."