A former product manager at Coinbase, Ishan Wahi, has been arrested on charges of wire fraud in connection to an insider trading scheme.
Wahi had worked within Coinbase’s assets listing team.
According to the Department of Justice, Wahi repeatedly tipped his brother Nikhil Wahi and friend Sameer Ramani about new coins that were slated to be listed on Coinbase.
The two allegedly profited at least $1.5 million in illegal trades from 25 different crypto assets and at least 14 separate Coinbase public listings.
US Attorney Damian Williams described Wahi’s act as “the first ever insider trading case involving cryptocurrency markets.”
The DOJ said adding Wahi “caused multiple anonymous Ethereum blockchain wallets to purchase large quantities of at least six of the crypto assets” included in that listing.
After being called for an in-person meeting regarding a Coinbase internal investigation, Ishan Wahi attempted to fly out to India on May 15, but was stopped at the airport by law enforcement.
Wahi and Ramani tried to conceal the crypto purchases they made before new listings were announced by using centralized exchanges accounts with other people’s names and transferring the funds through multiple anonymous Ethereum wallets, according to the DOJ.
The Securities and Exchange Commission (SEC) has also filed a complaint in parallel with the DOJ.
In it, the agency claims that at least nine of the assets traded by Wahi and Ramani were securities.
The two brothers were both arrested in Seattle, but Ramani remains at large. They were all charged by the DOJ with two counts of wire fraud conspiracy and two counts of wire fraud.
The SEC charged the three with violating the antifraud provisions of the securities laws and is seeking permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties.
