Defendant Sentenced In Groundbreaking Cryptocurrency Insider Trading Case

 

Nikhil Wahi Was Sentenced to 10 Months in Prison for Trading Using Misappropriated Information About Crypto Asset Listings on an Exchange

 Damian Williams, the United States Attorney for the Southern District of New York, announced today that NIKHIL WAHI was sentenced by U.S. District Judge Loretta A. Preska to 10 months in prison for his participation in a scheme to commit insider trading in cryptocurrency assets by using confidential information from his brother, a former product manager at Coinbase Global, Inc. (“Coinbase”), about which crypto assets were scheduled to be listed on Coinbase’s exchanges.  WAHI previously pled guilty to one count of conspiracy to commit wire fraud.

U.S. Attorney Damian Williams said: “At a time when the cryptocurrency markets have been plagued by fear, uncertainty, and doubt, insider trading creates the impression that everything is rigged and that only people with secret advantages can make a real buck.  Today’s sentence makes clear that the cryptocurrency markets are not lawless.  There are real consequences to illegal insider trading, wherever and whenever it occurs.”

According to the allegations in the Indictment and statements made in public court proceedings and filings:

Beginning in approximately October 2020, NIKHIL WAHI obtained from his brother, an employee of Coinbase working on highly confidential crypto asset listings, secret tips about which crypto assets would be listed on Coinbase.  Using that insider information, NIKHIL WAHI used anonymous Ethereum blockchain wallets and accounts held under pseudonyms at centralized cryptocurrency exchanges to acquire those crypto assets shortly before Coinbase publicly announced that it was listing these crypto assets on its exchanges.  On multiple occasions following Coinbase’s public listing announcements, NIKHIL WAHI sold the crypto assets for a profit.

In addition to the prison sentence, WAHI, 27, of Seattle, Washington, was ordered to pay $892,500 in forfeiture.

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 initiated civil proceedings against WAHI.