The United States Department of Justice (DOJ) has arrested and charged Ishan Wahi, a former Coinbase product manager, his brother Nikhil Wahi, and Sameer Ramani for allegedly committing insider trading and wire fraud.
The Department of Justice stated in a press release about the arrest that Wahi allegedly obtained information about the listing of assets on Coinbase and shared it with his brother, Nikhil Wahi, and/or Sameer Ramani. The asset listing information was private at the time Wahi allegedly shared it, implying that the assets had not yet been listed.
The US Securities and Exchange Commission (SEC) issued a press release stating that it has also filed charges against the individuals mentioned above for insider trading.
According to US Attorney Damian Williams, “today’s charges are a further reminder that Web3 is not a law-free zone. Just last month, I announced the first-ever insider trading case involving NFTs, and today I announce the first-ever insider trading case involving cryptocurrency markets. Our message with these charges is clear: fraud is a fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them. ”
The FBI Assistant Director Michael J. Driscoll also disclosed that “although the allegations in this case relate to transactions made on a crypto exchange—rather than a more traditional financial market—they still constitute insider trading.” As alleged, the defendants made illegal trades in at least 25 different crypto assets and realized ill-gotten gains totaling approximately $1.5 million. Today’s action should demonstrate the FBI’s commitment to protecting the integrity of all financial markets – both “old” and “new.”
Williams also stated that this was the Department of Justice’s second case involving cryptocurrency insider trading.
It is alleged that the former product manager of Coinbase distributed information on at least fourteen cryptocurrency listings at his previous place of employment, Coinbase. The defendant allegedly utilized anonymous wallets and accounts to purchase cryptocurrencies such as TRIBE, ALCX, XYO, GALA, ENS, POWR, and so on.
The Department of Justice indictment cited a tweet by Cobie that revealed an Ethereum address that “bought hundreds of thousands of dollars of tokens” of a particular cryptocurrency that Coinbase listed before it was publicly listed.
Cobie’s tweet is shown below.
“Found an ETH address that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published, rofl”
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