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Former Coinbase Product Manager Sentenced to Two Years

Just weeks after Coinbase said it would be moving its operations to the Bahamas, the company’s former product manager was sentenced to two years in jail on insider trading allegations.

Ishan Wahi was charged with insider trading and detained in July 2022 for giving his brother insider knowledge about impending cryptocurrency listings at Coinbase.

At a hearing on May 9 in the Southern District of New York United States District Court, Judge Loretta Preska sentenced Wahi to two years in prison for his part in using secret information he acquired while employed at Coinbase to make up to $1.5 million in profit from new token listings. To serve his term at the Fort Dix Federal Correctional Institution in New Jersey, Preska ordered Wahi to turn himself in by June 21 at 2:00 PM ET. He will have two years of concurrent supervised release following his sentence in jail for each charge.

Just before new digital assets were published by America’s largest crypto exchange, Ishan Wahi, 32, and his colleagues, including his brother Nikhil, pocketed almost $1.5 million from their investments.

Wahi was able to buy incoming assets and then rapidly sell them for enormous gains by using his knowledge of them. The “Coinbase effect” refers to the rapid increase in value of new currencies and tokens after they are listed on the San Francisco-based exchange.

After being questioned by Coinbase, the Indian national attempted to leave the country, according to the Department of Justice. However, American police prevented him from boarding an aircraft to India.

In February, Wahi entered a plea to two counts of conspiracy to conduct wire fraud that had been brought against him by the Southern District of New York’s attorneys.

In a statement released on Tuesday, U.S. Attorney Damian Williams claimed that Wahi had “violated the trust placed in him by his employer” by disclosing the top-secret lists.

The penalty handed down today should serve as a clear reminder to everyone who participates in the cryptocurrency markets that they are subject to the same rules as everyone else, he continued.

The US Securities and Exchange Commission also filed civil accusations against Wahi, his brother, and his friend Sameer Ramani.

The former head of product at NFT market place OpenSea was sentenced less than a week after being found guilty of fraud and money laundering in the first insider trading scam employing digital assets.

The 32-year-old Nathaniel Chastain purchased the NFTs he intended to promote on the trading platform, sold them soon after, and made more than $50,000 in illicit profit.

Ishan reportedly agreed to a sentence of between 36 and 47 months in prison when the brothers admitted admission to criminal insider trading allegations. In September 2022, Nikhil admitted admission to charges of conspiring to commit wire fraud, and he was later given a 10-month prison term. Ramani was still at large at the time this article was published.

Ishan has also come under fire from the US Securities and Exchange Commission in a separate investigation into alleged securities law violations. On April 3, the SEC announced that it struck “an agreement in principle” with the former product manager of Coinbase.


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