Ex-Coinbase Manager Charged with Insider Trading on Crypto

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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