Following his jail term, Nikhil Wahi will be deported to India after pleading guilty to insider trading.
Nikhil Wahi, the brother of former Coinbase product manager Ishan Wahi, was sentenced to 10 months in jail after pleading guilty to insider trading of crypto tokens using his family link.
The accomplice will be required to refund the $892,00 in profits he made from these transactions.
In July, both Nikhil and Ishan Wahi were detained on charges that Ishan had tipped off Nikhil about forthcoming Coinbase listings just before they were made public. This gave the guys an unfair edge by allowing them to invest substantial sums of money in the tokens before other investors heard about them.
According to prosecutors, Nikhil exchanged 40 distinct tokens in this manner at least 14 times beginning in June 2021, generating a profit of about $900,000 by doing so.
Sameer Ramani, a brother’s acquaintance, was also engaged in the case and helped the gang collect around $1.5 million in total. Similarly, he was charged with wire fraud, although he is still at large.
Tuesday, Nikhil told US District Judge Loretta Preska, “I committed a huge blunder, a horrible one.” It is something with which I shall have to live forever.”
U.S. Attorney Damien Williams said, after the defendant’s guilty plea in September, that this was the first time “a defendant acknowledged guilt in an insider trading case involving the cryptocurrency markets.” In August Ishan Wahi pleaded not guilty.
Nikhil’s 10-month sentence is a long cry from the 20-year maximum that may be imposed on wire fraud offenders, but it was nevertheless a disappointment for his brother, who had requested no prison time. On the other side, prosecutors anticipated he would spend up to 16 months in jail. Following the completion of his term, Nikhil will be deported to India.
On May 16, 2022, Coinbase convened a meeting with Ishan Wahi due to allegations that he was participating in such illegal behaviour. The night before this encounter, he tried to escape to India but was prevented by airport security.
Tuesday, Coinbase laid off an additional 950 staff owing to the present economic conditions.
In June 2022, the first case of insider trading involving digital assets was brought against former OpenSea employee Nathaniel Chastain. Chastain was accused, like the Wahi brothers, of buying in NFTs just before he realized they would be put on the market.
In September 2021, on-chain sleuths uncovered Chastain’s shady conduct and he was promptly sacked from OpenSea.
Chastain filed a request to dismiss any allegations against him in August, with his attorneys arguing that he had legally violated no laws since NFTs had not yet been classed as either securities or commodities.
“The government… should not be allowed to continue on a Carpenter wire fraud theory of insider trading when it concedes that the relevant “digital artwork” is not a security,” the petition said.