The brother of a former Coinbase product manager has been sentenced to 10 months’ prison after earning almost $900,000 in a crypto insider trading scheme.
US authorities charged Nikhil Wahi last July, alongside brother Ishan and friend Sameer Ramani, over a scheme to profit from advanced knowledge of Coinbase listings.
Wahi pleaded guilty to one count of conspiracy to commit wire fraud in front of the U.S. Attorney’s Office Southern District of New York in September last year. His brother Ishan has pleaded not guilty and Ramani has yet to make an appearance in the case.
“I made a huge mistake, a terrible mistake,” Wahi told US District Judge Loretta Preska on Tuesday. “It’s something that I will have to live with forever.”
Wahi received multiple tips between July 2021 and May 2022 from his brother on confidential information around cryptocurrencies to be listed on Coinbase before public announcements.
He used undisclosed Ethereum wallets to purchase the cryptocurrencies prior to public announcements and sold them for a profit once the listings were made public.
According to an earlier statement, Wahi would conceal his identity by using others’ accounts at centralized exchanges to transfer “funds, crypto assets, and proceeds of their scheme through multiple anonymous Ethereum blockchain wallets.”
“Wahi admitted in court today that he traded in crypto assets based on Coinbase’s confidential business information to which he was not entitled,” US Attorney Damian Williams previously said. “For the first time ever, a defendant has admitted his guilt in an insider trading case involving the cryptocurrency markets.”
In addition to the prison sentence, Bloomberg noted Wahi will forfeit all profits made from the trading scheme.
Wahi’s sentence comes soon after former FTX executives pleaded guilty to fraud and conspiracy charges, reminding Web3 users that it is “not a law-free zone,” U.S. Attorney Damian Williams said in a statement.
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This article was first published on Decrypt.co