Ex-Coinbase Manager Charged with Insider Trading on Crypto
July 21 2022 - 12:35PM
Dow Jones News
By Dean Seal
A former product manager at Coinbase has been charged with
insider trading on crypto assets ahead of the company's listing
announcements.
Federal prosecutors allege that Ishan Wahi, along with his
brother and a friend, made about $1.5 million trading on
confidential information about when Coinbase planned to list
certain crypto assets or tokens on its exchange.
Mr. Wahi and his brother Nikhil Wahi were arrested in Seattle on
Thursday morning, while friend Sameer Ramani has been charged and
remains at large.
The Securities and Exchange Commission filed a parallel civil
action against the trio, alleging that Mr. Wahi helped coordinate
Coinbase's listing announcements and repeatedly provided details
about their timing and content to his brother and Mr. Ramani.
According to the securities regulator, the former Coinbase
manager's brother and Mr. Ramani used the confidential information
to purchase at least 25 crypto assets between June 2021 and April
2022, and then sold those assets at a profit once Coinbase
announced that it would list them.
"We are not concerned with labels, but rather the economic
realities of an offering," said Gurbir S. Grewal, the SEC's
enforcement director. "In this case, those realities affirm that a
number of the crypto assets at issue were securities, and, as
alleged, the defendants engaged in typical insider trading ahead of
their listing on Coinbase."
Federal prosecutors said Thursday that Mr. Wahi was terminated
after Mr. Ramani's trading activity came to Coinbase's attention in
April. The day before Mr. Wahi was scheduled to meet with
Coinbase's director of security operations about the matter, he
attempted to flee to India but was stopped by law enforcement
before boarding a flight, prosecutors said.
Mr. Wahi is charged with two counts of wire fraud and two counts
of conspiracy to commit fraud; his brother and Mr. Ramani
separately face one of each charge.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
July 21, 2022 12:20 ET (16:20 GMT)
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