A former employee of the American exchange, Coinbase, has been indicted for his part in an elaborate insider trading scheme in the crypto markets. The culprit allegedly leveraged confidential Coinbase information regarding when crypto assets were slated to be listed on the exchange.
Ishan Wahi and his associates made $1.5m in the insider trading scheme
Today, U.S. Attorney Damian Williams, and the Assistant Director of the New York Field Office of the FBI, Michael Driscoll, announced the indictment against Ishan Wahi and two others, namely Nikhil Wahi and Sameer Ramani. Ishan Wahi, a former product manager at Coinbase, was arrested on Thursday morning in Seattle, Washington, alongside his brother Nikhil Wahi. Sameer Ramani is reported to be at large.
Ishan Wahi and the other malefactors are alleged to have amassed a combined profit estimate of about $1.5m, which they gathered from trading in over 25 different digital assets. FBI Assistant Director Driscoll noted that, while the crime was not committed in the traditional markets, it still represents a case of insider trading. “Today’s action should demonstrate the FBI’s commitment to protecting the integrity of all financial markets – both ‘old’ and ‘new,'” he concluded.
Ishan Wahi, who had access to confidential information about the listing schedule of assets on Coinbase, would either tip his brother Nikhil Wahi or his associate Sameer Ramani. The duo would then place trades on the assets, anticipating the public disclosure of the announcement concerning the listing of the assets. The culprits have allegedly engaged in this act on 14 different occasions, from June 2021 to April 2022.
Following plans of an investigation by Coinbase, Ishan Wahi planned to flee the U.S.
In the latest of his attempts, Ishan Wahi’s scheme was brought to light when a well-known Twitter handle in the crypto community raised questions about an Ethereum wallet that purchased an enormous amount of tokens 24 hours before they were to be featured exclusively on Coinbase. This happened on April 12.
Following the notice, Coinbase launched an investigation into the matter and subsequently called Ishan Wahi in for questioning, to which he agreed. The 32-year-old Indian national later made plans to flee the U.S. to India but was intercepted by the authorities on May 16. He and his brother will be presented in a U.S. district court in Washington today.
The criminal act of insider trading appears to not be dominant in the crypto space, but this could be because financial authorities have not placed the area in vivid surveillance because of the novelty of the crypto industry. This would be the first indictment over insider trading involving crypto assets. On June 1, the first indictment involving NFTs was made against Nathaniel Chastain, a former employee of NFT marketplace OpenSea.