As the crypto market has continued to evolve over the past year, new criminal charges cases just seem to keep popping up every now and then. In today’s news, ex-Coinbase product manager, Ishan Wahi pleaded guilty in court to two counts of wire fraud which includes insider trading of a crypto asset prior to listing on Coinbase.
Though the practice of this case could have since been going on in the crypto industry, Wahi charges mark the first-ever insider trading conviction relating to cryptocurrencies.
Details On The Insider Trading Case
As a manager that he was, Wahi was responsible for the choosing of tokens to be listed on Coinbase, and because most Coinbase listing results in an increase in the valuation of the asset, Wahi was tempted to use this to his advantage.
Reportedly, Wahi who is in charge of token listings gives his brother Nikhil Wahi and business associate Sameer Ramani necessary details such as which tokens to be listed and when, to initiate the illegal scheme.
Both partners do as required and have so far made roughly $1.1 million within a year between June 2021 and April 2022. Nikhil Wahi has since been caught up in the web pleading guilty to a 10-month sentence.
U.S. Attorney Damian Williams commented on the case noting, “Ishan Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets.” Williams added, “Whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime … We will continue to use our expertise to prosecute this crime no matter what form it takes and where it occurs.”
While the charges seem to be the latest, the penalty behind it is quite frightening as each charge is coupled with a maximum penalty of up to 20 years jail sentence, although Wahi’s sentence might not get to that extent.
The Hunt Down
The offender got caught when the crypto community noticed an unlikely transaction on the blockchain. A report noted, “a wallet bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase asset listing post about 24 hours before it was published.”
Following the discovery, Coinbase disclosed it’s working closely to investigate the scheme. On May 11, the DoJ stated, Wahi, was asked to attend “an in-person meeting relating to Coinbase’s asset listing process. After Wahi visited, his arrest was confirmed on May 15.
While fraud cases could continue to be discovered in the crypto market, the market itself has always been composure. The global cryptocurrency market capitalization has improved significantly since the beginning of the year moving from the $850 billion range seen late last year to over $1 trillion at the beginning of the year.
Meanwhile at the time of writing the total crypto market capitalization is currently in an uptrend up nearly 2% in the last 24 hours while sitting steadily at a valuation of $1.131 trillion.