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Former Coinbase Product Manager Ishan Wahi has been sentenced to two years in prison for his involvement in cryptocurrency insider trading. Wahi's sentence exceeds that of his brother, Nikhil Wahi, who received a 10-month sentence for collaborating in the crime. According to Reuters, U.S. District Judge Loretta Preska sentenced Ishan Wahi in a Manhattan Federal court on Tuesday.
In February, Wahi pleaded guilty to two counts of conspiracy to commit wire fraud. During the hearing, Judge Preska described his actions as a "massive abuse" of trust within Coinbase, the largest cryptocurrency exchange in the United States, which has faced numerous legal challenges from customers and government entities over the past year.
Last July, the Department of Justice arrested and charged Wahi for providing his brother and friend, Sameer Ramani, with insider information about forthcoming coin listings on Coinbase before they were publicly disclosed. Major crypto exchanges often see significant impacts on the value of assets upon listing announcements.
According to prosecutors, the trio's plan generated approximately $1.5 million from 55 separate token announcements between June 2021 and April 2022. Assistant U.S. Attorney Noah Solowiejczyk stated during the hearing that Wahi's continuous tips over ten months indicated that his actions were "not a one-off mistake." Additionally, Judge Preska pointed out that Wahi and his co-defendants' efforts to conceal their activities demonstrated that they were aware of their wrongdoing.
Initially, Ishan Wahi pleaded not guilty to the wire fraud charges but eventually changed his plea to guilty in February, following his brother's example. In court documents, Wahi requested a sentence no longer than his brother's, referencing other insider trading cases where offenders received minimal prison time. However, prosecutors sought a three-year sentence for Wahi to establish a deterrent for others in the crypto exchange industry who might misuse their privileged information.
In June, OpenSea's Head of Product faced similar charges related to NFT insider trading. However, the former employee has since filed to have the charges dismissed.
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