Former Coinbase employee Ishan Wahi was sentenced to two years in prison for committing what the Department of Justice has deemed the first-ever cryptocurrency insider trading scheme.
In a May 9 hearing, Judge Loretta Preska of the Southern District of New York sentenced Wahi for using confidential information he obtained while working at Coinbase to profit from newly listed tokens. Ishan and his co-conspirators, including his brother Nikhil, earned more than $1.5 million from the scheme.
Wahi was ordered to turn himself in by June 21 at 2:00 PM ET to begin serving his sentence at Fort Dix Federal Correctional Institution in New Jersey. Upon completion of his sentence, he’ll be placed under a two-year supervised release.
Ishan and Nikhil tried to flee the United States to India in July 2022, yet they were stopped from boarding by the U.S. authorities. Both brothers pleaded guilty to charges of insider trading. Ishan reportedly agreed to a prison term of 36 to 47 months. In September 2022, Nikhil pleaded guilty to conspiracy to commit wire fraud and was sentenced to 10 months in prison.
Prosecutors stated that of all co-conspirators, Ishan was most responsible for orchestrating an insider trading scheme:
This was not a one-off mistake — this was over a ten-month period […] Having access to the kind of information that this defendant had access to was like being able to read the newspaper a day in advance.
In a statement made on Tuesday, U.S. Attorney Damian Williams said that Wahi violated the trust placed in him by his employer by disclosing confidential listings.
Williams then added:
Today’s sentence should send a strong signal to all participants in the cryptocurrency markets that the laws decidedly do apply to them.
During the hearing, Ishan Wahi addressed the judge, saying he was “very sorry” for his actions and that he had “made a huge mistake”.
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