A former Coinbase product manager was accused by the DOJ of wire fraud for purchasing cryptocurrencies before listing them on Coinbase and then selling them during the initial hype after they were added to Coinbase.
Ishan Wahi, the product manager at the cryptocurrency exchange, and his brother Nikhil Wahi were arrested on July 21st in Seattle. They and a third defendant, their friend Sameer Ramani, also face related U.S. Securities and Exchange Commission civil charges. Ramani currently remains at large.
Ishan Wahi’s lawyers released a statement claiming he is “innocent of all wrongdoing and intends to defend himself vigorously.” A lawyer for Nikhil Wahi did not immediately respond to requests for comment.
Prosecutors allege that Ishan Wahi was sharing confidential information about forthcoming announcements of new cryptocurrency digital assets that Coinbase would be adding to its platform and allowing users to trade through its exchange. Wahi had access to exclusive messaging groups for high-ranking Coinbase employees. Because of this, he received privileged information about the exact date on which some cryptocurrencies would be listed on the platform, being able to invest large amounts of money before other people.
They also allege that Ishan Wahi bought a one-way plane ticket to India immediately after a Coinbase security director summoned him to the company’s Seattle office for a meeting. The police arrested him and prevented him from boarding the May 16 flight. All three defendants face conspiracy charges and wire fraud, each carrying a maximum sentence of up to 20 years.
Coinbase has a long track of collaborating with US authorities in order to prevent fraud and assist in regulating the crypto space.