Indian-origin defendant sentenced in groundbreaking cryptocurrency insider trading case

The United States Attorney for the Southern District of New York, announced Jan. 10, 2023, that Indian-origin man Nikhil Wahi was sentenced by U.S. District Judge Loretta A. Preska to 10 months in prison for participating in a scheme to commit insider trading in cryptocurrency assets. He is accused of doing so by using confidential information from his brother, a former product manager at Coinbase Global, Inc. (“Coinbase”), by getting information about which crypto assets were scheduled to be listed on Coinbase’s exchanges.

Wahi, 27, of Seattle, Washington, previously pled guilty to one count of conspiracy to commit wire fraud, the press release from the U.S. Attorney Damian Williams’ Office said.

According to the allegations in the Indictment and statements made in public court proceedings and filings, given in the press release:

Beginning in approximately October 2020, Wahi obtained from his brother, an employee of Coinbase working on highly confidential crypto asset listings, secret tips about which crypto assets would be listed on Coinbase.

Using that insider information, he used anonymous Ethereum blockchain wallets and accounts held under pseudonyms at centralized cryptocurrency exchanges to acquire those crypto assets shortly before Coinbase publicly announced that it was listing these crypto assets on its exchanges.  On multiple occasions following Coinbase’s public listing announcements, Wahi sold the crypto assets for a profit.

In addition to the prison sentence, Wahi was ordered to pay $892,500 in forfeiture.

The Securities and Exchange Commission separately initiated civil proceedings against Wahi, the press release noted.