By Michael Scott
The US authorities convicted Nikhil Wahi for committing the first-ever crypto insider trading. The suspect will be put behind bars for 10 months for contravening US securities regulations.
Coinbase Battle Crypto Insider Trading
In February last year, the crypto Twitter community identified “unscrupulous actors” conducting insider trading. A crypto enthusiast known as Cobie was the first to detect crypto-related irregularity.
Cobie observed an Ethereum address trading unfathomable amounts of crypto assets yet to be listed on the California-based crypto exchange Coinbase.
Cobie’s discovery prompted the Coinbase team to make the purposeful move in probing the case. They joined hands with the Federal Bureau of Investigations (FBI) to dig deeper into the Cobie unwelcoming news.
The investigators discovered that Ishan Wahi, Coinbase’s former product manager, leaked company sensitive information to his 27-year-old brother Nikhil Wahi.
Residing in Seattle, Wahi had teamed up with Sammer Ramani, a friend, to conduct illegal trading of 25 crypto tokens on the Coinbase platform.
Conspiracy to the Trading Irregularities
Additionally, the Coinbase former manager was accused of informing the two about the Coinbase listing before the official announcement. This information proved helpful in executing crypto trading irregularities.
Surprisingly, the embattled three were confirmed to have generated over $1.5M in gains from the scheme. The probing team disclosed that the suspects began the illegal project in October 2020 till the FBI brought it to light last April.
In addition, the US SEC submitted their filings to the Seattle Federal Court, claiming that the Wahi scheme was against the law. SEC argued that the three purchased crypto assets before the Coinbase listing team had made it public on digital assets available on the trading platform.
When Coinbase’s ex-manager realized the FBI was hunting them down, he attempted to flee to India, which was unsuccessful. He was also reported to inform his brother and his trusted friend Ramani of the ongoing Coinbase scrutiny.
Authority Strident Moves on Crypto Irregularities
A Federal Court in Mahantam accused the three on January 5 of wire fraud related to the Coinbase scandal. The court also ordered the primary crypto insider Wahi to serve a 10-month jail term.
In response to the court ruling, the US Attorney General, Damian Williams, proclaimed that the Wahi case was the first illegal insider trading reported in the crypto hemisphere.
William clarified that the digital world is regulated and that key players should abide by crypto laws.