For the Southern District of New York stated that NIKHIL WAHI, 26, had pled guilty to committing wire fraud.
He also pleaded guilty to insider trading of cryptocurrency using confidential information from Coinbase's listings.
Nikhil Wahi is the brother of a former Coinbase Global, Inc. product manager. The court has accused Wahi of taking advantage of Coinbase's confidential information about future crypto listings and profiting significantly from such trades. Wahi was detained earlier this year in July by officials.
In a statement, U.S. Attorney Damian Williams said: “For the first time, a defendant in an insider trading case involving cryptocurrency marketplaces has confessed regretfully. Today's guilty plea should serve as a warning to individuals who trade in cryptocurrency markets that the Southern District of New York will continue to vigorously enforce all types of fraud and will adapt as technology changes. Nikhil Wahi is currently awaiting sentence for his crime and must forfeit his illegal profits.”
How did Nikhil Wahi Commit the Wire Fraud?
On several instances between July 2021 and May 2022, Nikhil received multiple tips from his brother Ishan, the former product manager at Coinbase. This information was about the prospective cryptocurrency listings that Coinbase planned to offer in the near future.
Nikhil then created anonymous ETH blockchain wallets to buy crypto assets right before Coinbase's IPO announcement. Soon after the announcements, Nikhil liquidated the crypto assets and profited handsomely.
In order to conceal his identity, Nikhil created accounts at centralized exchanges in the names of others. Later, he would use multiple anonymous ETH blockchain wallets to transfer funds, crypto assets, and proceeds. Nikhil also created similar blockchain wallets on a regular basis, with no previous transaction history. According to the authorities, Nikhil profited more than $1.5 million from these trades.
In his statement to the judge, Nikhil admitted that “he understood it was illegal to collect confidential information from Coinbase and execute transactions based on that confidential information.”
The term insider trading means when you receive confidential information regarding an asset before the listing of the asset on any exchange in the world. This term is quite prevalent in stock markets, however, it was first encountered in the cryptocurrency market in July 2022.
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