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Nikhil Wahi, brother of former Coinbase product manager Ishan Wahi, used his brother’s information to buy and sell tokens after listed.
12, the US Department of Justice issued a statement stating that Nikhil Wahi, brother of former Ishan Wahi, was convicted of committing cryptocurrency wire fraud using insider information obtained from his brother.
First Person to Accuse Cryptocurrency Wire Fraud
US Attorney General Damian Williams said that for the first time in history, a person accused of cryptocurrency insider trading pleaded guilty.
“Nikhil Wahi admitted in court today that he traded in crypto assets based on Coinbase’s confidential business information to which he was not entitled. For the first time ever, a defendant has admitted guilt in an insider trading case involving the cryptocurrency markets.”
“The Southern District of New York will continue to steadfastly police frauds of all stripes and will adapt as technology evolves.”
Coinbase Did Its Best To Prevent And Deal With The Problem
As reported by CryptoPotato, the Wahi brothers were arrested in July following an investigation by US authorities in conjunction with Coinbase. The investigation concluded that the Nikhi Wahi brothers took advantage of their executive position at Coinbase to invest in cryptocurrencies before they were listed on the platform.
Since July 2021, Nikhil Wahl has been using insider information to sell cryptocurrencies before his brother was listed on Coinbase, exploiting the notorious “Coinbase effect” after public listing announcements.
Coinbase has warned its employees that it is strictly forbidden to share listing information with anyone. He even forbade them to give investment “tips” to acquaintances. Therefore, İşhan was aware of his crime before he was arrested.
Nikhil used accounts in other people’s names on centralized exchanges to cover his tracks. Additionally, according to officials, he had created multiple wallets with no history to hide their information via the Ethereum blockchain, but the researchers were able to track all their transactions.