Tippee Pleads Guilty in First-Ever Cryptocurrency Insider Trading Case | USAO-SDNY


Damian Williams, the United States Attorney for the Southern District of New York, today announced that NIKHIL WAHI, the brother of a former chief product officer at Coinbase Global, Inc. (“Coinbase”), has pleaded guilty to one count of conspiracy to commit wire fraud related to a scheme to engage in insider trading in cryptocurrency assets using confidential Coinbase information about the crypto assets that were to be listed on Coinbase exchanges. WAHI was arrested in July of this year and pleaded guilty before US District Judge Loretta A. Preska.

US Attorney Damian Williams said: “Less than two months after being charged, Nikhil Wahi admitted in court today that he traded crypto assets based on confidential Coinbase business information to which he did not. was not entitled. For the first time ever, a defendant has pleaded guilty in an insider trading case involving the cryptocurrency markets. Today’s guilty plea should remind those who participate in the markets of cryptocurrency that the Southern District of New York will continue to steadfastly monitor fraud of all stripes and adapt to changing technology Nikhil Wahi now awaits sentencing for his crime and must also forfeit his profits illicit.

According to the allegations contained in the Indictment and statements made in public hearings:

At all relevant times, Coinbase was one of the largest cryptocurrency exchanges in the world. Coinbase users can acquire, trade, 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 usually increased significantly after Coinbase announced that it would list a particular crypto asset. Accordingly, Coinbase has kept this information strictly confidential and has prohibited its employees from sharing this information with others, including providing a “tip” to anyone who may trade based on this information.

Starting around October 2020, ISHAN WAHI worked at Coinbase as a Product Manager assigned to a Coinbase asset listing team. In this role, ISHAN WAHI was involved in the highly confidential process of listing crypto assets on Coinbase exchanges and had detailed and advanced knowledge of the crypto assets Coinbase planned to list and the timing of public announcements regarding these listings. crypto assets.

On several occasions between July 2021 and May 2022, after receiving advice from ISHAN WAHI on which crypto assets Coinbase planned to list on its exchanges, NIKHIL WAHI used anonymous Ethereum blockchain wallets to acquire these crypto assets shortly. before Coinbase publicly announced that it was listing these crypto assets on its exchanges. Following Coinbase’s public listing announcements, NIKHIL WAHI repeatedly sold the crypto assets for profit.

To conceal his purchases of crypto assets ahead of Coinbase listing announcements, NIKHIL WAHI used accounts on centralized exchanges held in other people’s names and transferred funds, crypto assets, and the proceeds of their scheme through several Anonymous Ethereum blockchain wallets. NIKHIL WAHI also regularly created and used new Ethereum blockchain wallets without any prior transaction history to further conceal his involvement in the scheme.

* * *

NIKHIL WAHI, 26, of Seattle, Washington, pleaded guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.

The maximum legal sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of defendants will be determined by a judge. NIKHIL WAHI is 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 filed a civil lawsuit against WAHI.

This matter is being handled by the Bureau’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Noah Solowiejczyk and Nicolas Roos are charged with the prosecution.


Comments are closed.