An ex-Coinbase staffer's brother was just hit with the first-ever sentence for crypto insider trading

• The cryptocurrency sector just saw its first-ever sentencing for insider trading.
• Nikhil Wahi, the brother of a former Coinbase staffer, will serve 10 months in prison and was ordered to pay $892,500.

Nikhil Wahi, the brother of a former Coinbase product manager, was sentenced to 10 months in prison on Tuesday at a federal court in Manhattan in what prosecutors have called the first-ever insider trading case for cryptocurrency.

The 27-year-old was also ordered to pay $892,500 after pleading guilty to one count of conspiracy to commit wire fraud in September.

US Attorney Damian Williams maintained that the sentencing clarifies that "cryptocurrency markets are not lawless."

"There are real consequences to illegal insider trading, wherever and whenever it occurs," he said.

Prosecutors said Wahi first began to receive tips from his brother, Ishan Wahi, in October 2020, and that information was used to sell tokens for a profit.

When charges were initially filed in July, the Justice Department alleged that Ishan Wahi tipped off his brother and a friend, Sameer Ramani, at least 14 times on asset listings before the information was publicly available, which allowed them to net $1.5 million in total on at least 25 assets.

The Securities and Exchange Commission also filed a separate insider trading complaint against them.

At the time, attorneys for Ishan Wahi, who has pleaded not guilty, told Insider that the allegations were baseless: "Ishan Wahi is innocent of all wrongdoing and intends to defend himself vigorously against these charges and in the SEC action."

Meanwhile, Ramani remains at large, according to the Associated Press.

The trio began to raise suspicion in April after Ramani purchased large quantities of six crypto assets before they were going to be listed on Coinbase, attracting the attention of a Twitter user within the online crypto community and pushing Coinbase to launch an investigation.

When Coinbase contacted Wahi in May to talk about the incident, he allegedly purchased a one-way ticket to India and notified his brother and Ramani of his attempt to depart the country. He was later stopped by law enforcement before he could board the plane.