NEW YORK (AP) — A former Coinbase product manager and his brother, along with a Houston man, were charged Thursday in what federal authorities described as the U.S. government’s first cryptocurrency insider trading case.
The brothers — Ishan Wahi and Nikhil Wahi — were arrested while the Houston man, Sameer Ramani, remained at large, federal authorities said as they announced the unsealing of an indictment in Manhattan federal court.
Authorities said Ishan Wahi, 32, was a product manager at Coinbase Global Inc., one of the world’s largest cryptocurrency exchanges, based in Seattle, when he provided tips to his brother, Nikhil Wahi, 26, and their friend, Ramani, 33. They were all charged with wire fraud conspiracy, wire fraud and wire fraud.
Authorities say that Ishan wahi was stopped by law enforcers before boarding the May 16 flight to India. He was then prevented from leaving the nation. According to a release, he had called his brother and Ramani and sent them texts in the hours prior to boarding the flight to inform them of an investigation Coinbase was conducting.
U.S. Attorney Damian Williams said the prosecution represented the government’s first insider trading case involving cryptocurrency markets. He stated that it was a reminder of the fact that cryptocurrency markets are not an unregulated area.
Michael Driscoll, head of the FBI’s New York office, said the defendants collected about $1.5 million in illegal profits by trading in at least 25 different crypto assets.
Attorneys representing Ishan Wahi said in an email to The Associated Press that their client is innocent and “intends to defend himself vigorously against these charges and in the SEC action.”
Other defense lawyers were contacted with messages seeking comments.
The Securities and Exchange Commission filed civil insider trading charges against these men in Seattle federal Court.
After they allegedly arranged to trade before multiple announcements about certain crypto assets were made on the Coinbase platform, the SEC brought the charges against them.
“As today’s case demonstrates, whether in equities, options, crypto assets, or other securities, we will vindicate our mission by identifying and combatting insider trading in securities wherever we see it,” said Carolyn M. Welshhans, Acting Chief of the Enforcement Division’s Crypto Assets and Cyber Unit.