NRI Nikhil Wahi pleads guilty in first-ever cryptocurrency
insider trading case in US
Los Angeles, Sep 14, 2022
NRIpress.club/Ramesh/ A.Gary Singh
NIKHIL WAHI, 26, of Seattle, Washington, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.
The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. NIKHIL WAHI is scheduled to be sentenced by Judge Preska on December 13, 2022, at 12:00 p.m.
Mr. Williams praised the investigative work of the Federal Bureau of Investigation. He also acknowledged the assistance of the Justice Department’s National Cryptocurrency Enforcement Team, as well as that of the Securities and Exchange Commission, which separately initiated civil proceedings against WAHI.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Noah Solowiejczyk and Nicolas Roos are in charge of the prosecution.
Damian Williams, the United States Attorney for the Southern District of New York, announced today that NIKHIL WAHI, the brother of a former product manager at Coinbase Global, Inc. (“Coinbase”), pled guilty to one count of conspiracy to commit wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information about which crypto assets were scheduled to be listed on Coinbase’s exchanges. WAHI was arrested in July of this year and pled guilty before U.S. District Judge Loretta A. Preska.
U.S. Attorney Damian Williams said: “Less than two months after he was charged, Nikhil Wahi admitted in court today that he traded in crypto assets based on Coinbase’s confidential business information to which he was not entitled. For the first time ever, a defendant has admitted his guilt in an insider trading case involving the cryptocurrency markets. Today’s guilty plea should serve as a reminder to those who participate in the cryptocurrency markets that the Southern District of New York will continue to steadfastly police frauds of all stripes and will adapt as technology evolves. Nikhil Wahi now awaits sentencing for his crime and must also forfeit his illicit profits.”
According to the allegations in the Indictment, and statements made in public court proceedings:
At all relevant times, Coinbase was one of the largest cryptocurrency exchanges in the world. Coinbase users could acquire, exchange, and sell various crypto assets through online user accounts with Coinbase. Periodically, Coinbase added new crypto assets to those that could be traded through its exchange, and the market value of crypto assets typically significantly increased after Coinbase announced that it would be listing a particular crypto asset. Accordingly, Coinbase kept such information strictly confidential and prohibited its employees from sharing that information with others, including by providing a “tip” to any person who might trade based on that information.
Beginning in approximately October 2020, ISHAN WAHI worked at Coinbase as a product manager assigned to a Coinbase asset listing team. In that role, ISHAN WAHI was involved in the highly confidential process of listing crypto assets on Coinbase’s exchanges and had detailed and advanced knowledge of which crypto assets Coinbase was planning to list and the timing of public announcements about those crypto asset listings.
On multiple occasions between July 2021 and May 2022, after getting tips from ISHAN WAHI as to which crypto assets Coinbase was planning to list on its exchanges, NIKHIL WAHI used anonymous Ethereum blockchain wallets to acquire those crypto assets shortly before Coinbase publicly announced that it was listing these crypto assets on its exchanges. Following Coinbase’s public listing announcements, on multiple occasions NIKHIL WAHI sold the crypto assets for a profit.
To conceal his purchases of crypto assets in advance of Coinbase listing announcements, NIKHIL WAHI used accounts at centralized exchanges held in the names of others, and transferred funds, crypto assets, and proceeds of their scheme through multiple anonymous Ethereum blockchain wallets. NIKHIL WAHI also regularly created and used new Ethereum blockchain wallets without any prior transaction history in order to further conceal his involvement in the scheme.