Thursday, September 29, 2022

Nikhil Wahi Pleads Guilty to Coinbase Insider Trading

Nikhil Wahi who was previously arrested in connection to Coinbase insider trading has pleaded guilty at his virtual court appearance.

Initially, Nikhil was arrested alongside his brother Ishan Wahi, a former Coinbase Global Product Manager. Sameer Ramani, who was identified as their friend was part of the scheme but is yet to be found. According to a report, Nikhil pleaded guilty to the wire fraud conspiracy crime during his virtual hearing at the United States District Court. 

All three suspects were arrested in July by the U.S authorities after they were suspected to be involved in wire fraud and insider trading. The charges were levied against them by the U.S. Attorney’s Office for the Southern District of New York, and the FBI department. The terms of the charges include the use of sensitive confidential information from Coinbase for personal gains.

Specifically, they had insider trading knowledge of 14 listed tokens ahead of when Coinbase could announce them publicly. Altogether, the trio made over $1.5 million in profit before they were apprehended. Notably, this is the first insider trading involving cryptocurrencies. 

The United States authorities that Ishan Wahi has been scheming this move since June 2021.

Therefore, between that period till around April this year, he has been misusing his position as Global Product Manager in Coinbase. Ishan who has pleaded not guilty, leaked information about the upcoming token launch to his brother and their friend.

Trio Makes Profit Off Coinbase Insider Trading 

Conversely, they began to invest in the tokens before their prices jumped. As a result, they made a profit off Tribe (TRIBE), Gala (GALA), Alchemix (ALCX), Powerledger (POWR), and Ethereum Name Service (ENS). The biggest profit margin which they recorded was about $900,000 from XYO.

Meanwhile, the exchange itself is currently faced with a lawsuit after it allegedly exposed its clients’ accounts to attacks.

Based on the complaint filed, Coinbase exposed its users to potential financial losses. The lack of strict security measures led to the initiation and approval of unauthorized transactions from customers’ accounts.

In the end, some users were temporarily locked out of their accounts while others were shut out completely. The case is still very much in the U.S District Court for the Northern District of Georgia.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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