Feds Charge 3 in First-Ever Crypto Insider Trading Case

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A former manager for Coinbase and two other men are facing decades in prison in what federal authorities have called the first-ever insider trading case involving cryptocurrency.

Ishan Wahi, a one-time product manager at Coinbase, his brother Nikhil Wahi, and his associate Sameer Ramani are all charged with wire fraud conspiracy and wire fraud, the U.S. Department of Justice (DOJ) said in a Thursday (July 21) press release.

The charges stem from a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information about which crypto assets were due to be listed on the company’s exchange, according to the release.

Prosecutors said the Wahi brothers were arrested in Seattle and were due in court Thursday. Ramani remains at large, the release stated. It was not clear Thursday afternoon if any of the men had attorneys.

U.S. Attorney Damian Williams said in the release the charges represent the first insider trading case tied to the cryptocurrency markets and come one month after he filed an insider trading case involving non-fungible tokens (NFTs).

“Today’s charges are a further reminder that Web3 is not a law-free zone,” Williams said, per the release. “… Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street.”

Ishan Wahi began working for Coinbase in October 2020 as a product manager for one of the company’s asset listing teams, a job that gave him access to highly confidential information about the assets the company was preparing to list, according to the release.

From June of last year until April, Ishan Wahi tipped his brother and Ramani about those listings so they could place profitable trades in the crypto assets in question before they went public, the release stated.

The scheme netted the men $1.5 million, according to the release, but began to collapse in April when a Twitter account that monitors the crypto community noticed a lot of purchases of tokens featured in a Coinbase asset listing 24 hours before the posting.

It was also members of the crypto community that alerted federal authorities to Nathaniel Chastain, an ex-OpenSea employee indicted in May for money laundering in the NFT case.

Read more: DOJ Charges of NFT Insider Trading Show New Digital Focus, Report Says

The DOJ said Chastain used anonymous accounts on the NFT marketplace to hide his identity. His alleged activities were first spotted by the NFT community, which traced his transfers and funds back to his public account.


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