Former Coinbase staffer pleads guilty to insider trading in landmark cryptocurrency case, weeks after brother sentenced

• An ex-Coinbase employee pleaded guilty to 2 counts of wire fraud, the first case of its kind.
• Ishan Wahi co-ordinated with his brother and another accomplice to preempt new listings on Coinbase.

An ex-Coinbase employee has pleaded guilty in the first-ever insider trading trial linked to cryptocurrencies, weeks after his brother was sentenced in the same case.

The Department of Justice (DOJ) said Ishan Wahi, a former product manager at the crypto exchange, pleaded guilty to two counts of conspiracy to commit wire fraud, by tipping off others regarding Coinbase's planned token listings in order to make a profit.

In January, Wahi's brother Nikhil was sentenced to 10 months in prison and hit with a $892,500 fine after pleading guilty to one count of conspiracy to commit wire fraud.

The DOJ said starting in October 2020, Ishan, 32, gave his brother Ishan and another accomplice Sameer Ramani information around Coinbase listings using his position at the company. The pair regularly made a profit off trades on Coinbase.

Prosecutors argued in court filings that the group made $1.5 million in profits from 14 Coinbase announcements, affecting at least 25 different crypto assets.

But their trades soon aroused suspicion. A tweet on April 12 2022 highlighted an Ethereum blockchain wallet "that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published." Coinbase's chief security officer responded that his team was already investigating the incident.

The DOJ confirmed this trading came from Ramani, based on tips provided by Wahi.

The former Coinbase employee faces up to 20 years in prison for each count of conspiracy to commit wire fraud. He will be sentenced on May 10.

"Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets," U.S. Attorney Damian Williams said.

"Whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime."