PUBLISHED ON: July 22, 2022
The Department of Justice (U.S. Attorney’s Office for the Southern District of New York) announced charges yesterday against Ishan Wahi, a former product manager at Coinbase, his brother, Nikhil Wahi, and a friend, Sameer Ramani. They are accused of "wire fraud conspiracy and wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information." Specifically, the DOJ charged that the individuals used confidential non-public Coinbase information about cryptocurrency assets to be listed on Coinbase’s exchanges to front-run expected price jumps. The insider-trading scheme allegedly earned them more than $1.1 million in illicit gains.
The SEC also announced that it filed civil charges against the individuals over the alleged scheme. The civil charges allege that Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were securities, and then sold them shortly after the announcements for a profit. The nine assets mentioned in the SEC complaint include AMP (AMP), Rally (RLY), DerivaDEX (DDX), XYO (XYO), Rari Governance Token (RGT), LCX (LCX), Powerledger (POWR), DFX Finance (DFX), and Kromatika (KROM). According to Coinbase, 7 of the 9 mentioned assets are listed on Coinbase’s platform.
Ishan Wahi attempted to flee to India ahead of a scheduled interview by Coinbase’s security department, but he was prevented by law enforcement from leaving. Ishan Wahi and Nikhil Wahi were arrested on Thursday morning in Seattle, and Ramani remains at large.
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Hailey Lennon is a partner in Anderson Kill’s nationally recognized crypto practice. The opinions expressed here are her own and not those of the firm or her clients.