Nikhil Wahi was arrested for allegedly conspiring with his brother and another associate to use crypto insider trading. He has now pleaded guilty to wire fraud conspiracy charges.
According to Reuters’ Monday report, Wahi confessed to authorities that he traded crypto using confidential information he obtained from Coinbase. Wahi’s brother Ishan was a product manager at Coinbase. During that time, he allegedly shared information about the launch dates with Sameer Ramani, his associate. They allegedly made approximately $1.5 million from trading 25 different cryptocurrency cryptocurrencies between 2021-2022 using the insider information.
Wahi, reportedly stated in court that he knew it was wrong to obtain Coinbase’s confidential data and trade based on that information.
Brother of ex-Coinbase manager pleads guilty to insider trading charge https://t.co/c6ak7oRr9K pic.twitter.com/5uBUHxyQar
— Reuters (@Reuters), September 12, 2022
Wahi and his brother, along with their brother, were charged in Seattle in July. Ramani was not yet in custody at the time of publication and still faces similar charges. Cointelegraph reported that Ishan had pleaded not guilty in August to wire fraud conspiracy charges and wire fraud charges. Reuters reported that Nikhil initially pleaded guilty, but changed his plea in an agreement with prosecutors.
The U.S. Securities and Exchange Commission filed a parallel complaint against the three alleging that the Wahis and Ramani had violated securities laws’ antifraud provisions. According to the same filing, at least 9 of 25 tokens used in the insider trading scam were “crypto assets securities” under the SEC’s jurisdiction. Critics claim that the regulator took a “regulation-by-enforcement” approach to the insider trading scheme rather than waiting for legislation.
Related: Former OpenSea employee claims that the legal team of the prosecution wants to claim NFTs for securities.
Coinbase announced its support for Tornado Cash users on Sept. 8. The lawsuit was brought by the U.S. Department of Treasury. It claimed that the Department of Treasury illegally added smart contract addresses of the crypto mixer to the Office of Foreign Asset Control’s Specially Designated Nationals. Brian Armstrong, CEO of Coinbase, stated that the exchange has a “responsibility” to protect the crypto industry from actions that are too extreme and to treat crypto on an even playing field.