A former product manager at cryptocurrency exchange Coinbase has been sentenced to two years in prison in what has been described as cryptocurrency’s first insider trading case.
The 32-year old Ishan Wahi was sentenced in Manhattan federal court after pleading guilty to two counts of conspiracy to commit wire fraud earlier this year.
US District Judge Loretta Preska described the scheme as involving a “massive abuse” of Wahi’s employer’s trust, and noted that attempts to cover up the actions showed that the defendant knew he was in the wrong.
Prosecutors in the case alleged Wahi of sharing confidential information with his brother Nikhil – who was was previously sentenced to ten months in prison in November – and their friend Sameer Ramani – who remains at large – about which currencies were going to be listed on Coinbase.
As a result of the insider information, the three men made a combined $1.5 million by trading 55 digital assets ahead of their listing announcements between June 2021 and April 2022.
At this week’s hearing, Ishan Wahi expressed remorse for his actions. He had asked in court papers for a sentence no longer than his brother’s based on other insider trading cases, with prosecutors calling for a sentence of more than three years in prison.
The US Securities and Exchange Commission has also filed lawsuits against the brothers over their trades. Ishan has reached an agreement in principle to settle the claims while Nikhil is in settlement talks with the SEC.
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