US Charges Ex-Coinbase Manager In First Cryptocurrency Insider Trading Case According to Reuters

By Luc Cohen and Hannah Lang

NEW YORK (Reuters) – A former product manager at Coinbase (NASDAQ:) Global and two others have been charged with wire fraud in the first crypto-related insider trading case, prosecutors say. United States member in Manhattan said on Thursday.

Ishan Wahi, product manager at the cryptocurrency exchange, and his brother Nikhil Wahi were arrested on Thursday in Seattle and are expected to appear in federal court there later in the day.

They and a third defendant, their friend Sameer Ramani, also face related civil charges by the US Securities and Exchange Commission. Ramani is huge.

In a statement, Ishan Wahi’s lawyers said he was “innocent from all wrongdoing and intends to defend himself vigorously.” Nikhil Wahi’s attorney did not immediately respond to requests for comment. Reuters could not immediately identify an attorney for Ramani.

Prosecutors said Ishan Wahi, 32, shared confidential information about upcoming announcements about new crypto assets that Coinbase will allow users to trade through its exchange.

In related civil charges, the SEC alleges Nikhil Wahi, 26, and Ramani, 33, of buying and selling at least 25 crypto assets for profit, nine of which the agency said it said. identified as securities.

An SEC official said their investigation is ongoing and declined to say whether it will pursue action against Coinbase for listing tokens that are considered securities in the lawsuit.

Wahi and Ramani allegedly used the ethereum blockchain wallet to purchase assets and trade at least 14 times before Coinbase announced between June 2021 and April 2022, generating at least $1.5 million in revenue. ill-gotten gains, prosecutors said.

Damian Williams, United States Attorney in Manhattan, said in a statement: “Fraud is fraud is fraud, whether it happens on blockchain or on Wall Street.

Prosecutors also said Ishan Wahi purchased a one-way flight to India after a Coinbase security chief summoned him to the company’s Seattle office for a meeting. Prosecutors said law enforcement barred him from boarding the May 16 flight.

Philip Martin, Coinbase’s chief security officer, said the company shared findings with prosecutors from an internal investigation into the transaction.

“We are committed to doing our part to ensure that all market participants have access to the same information,” Martin wrote on Twitter (NYSE:).

In a blog post, Coinbase acknowledged that the SEC had separately filed securities fraud charges against Ishan and Nikhil Wahi, as well as Ramani, but noted that federal prosecutors did not charge securities fraud charges. .

“None of the assets listed on our platform are securities, and the SEC fees are an unfortunate distraction from appropriate law enforcement action today,” the blog post said. .

Last month, federal prosecutors in Manhattan charged a former product manager at OpenSea, the largest online marketplace for non-fungible tokens, with insider trading in a case where companies What prosecutors describe is the first case involving digital assets.