By
Steve Muchoki
April 19th, 2024
Following the guilty plea and while he is serving 10 months in prison, a New York District Court has released an order of restitution for the ex-Coinbase employee’s brother.
Coinbase is expecting almost $470,000 from the brother of a former employee who allegedly benefitted from an insider trading scheme. Nikhil Wahi, the brother of former Coinbase product manager Ishan Wahi pleaded guilty to charges related to insider trading. He entered a guilty plea for wire fraud conspiracy charges after he was arrested for allegedly working with his brother and another associate, Sameer Ramani. Nikhil admitted in a virtual hearing that he used confidential information obtained from Ishan to make profits from trading crypto. Meanwhile, Ishan was an employee at the company at the time. As Coinbase’s product manager, he shared confidential information about token launch dates with his brother and the associate. The trio plotted to use the insider information to generate funds from themselves via crypto trading.
Prosecutors claimed that Ishan had information about the exchange and details about the new listings. Hence, he divulged the knowledge to his brother, who shared it with Ramani before the public announcement of the asset listings. The prosecutors added that Nikhil profited 892,500, which he was asked to forfeit to the US government.
Coinbase co-founder and CEO Brian Armstrong revealed that the company commenced an investigation immediately after noticing possible insider trading. He added that the company identified 3 suspects, one who was an employee but fired.
Coinbase to Receive Nearly $470k in Restitution from Insider Trading Participant
Following the guilty plea and while he is serving 10 months in prison, a New York District Court has released an order of restitution for the ex-Coinbase employee’s brother. The filing, signed on April 6 and released on April 10, says that Nikhil shall begin to make restitution payments in the total amount of $469,525.50 to Coinbase. The court orders that the defendant pays without reduction. Considering his financial capability, Nikhil has been asked to make restitution for his role in the insider trading in installments to Coinbase.
“While serving the term of imprisonment, the defendant shall make installment payments toward restitution and may do so through the Bureau of Prisons’ (BOP) Inmate Financial Responsibility Plan (IFRP). Any unpaid amount remaining upon release from prison will be paid in installments of at least 10 percent of the defendant’s gross income on the 15th day of each month.”
As the first insider trading case involving crypto, Coinbase got the attention of many, including the SEC. The Securities and Exchange Commission (SEC) charged the trio of violating antifraud provisions of the US securities laws. After back and forth, the Commission said that it had reached an “agreement in principle” to resolve the insider trading case of the former Coinbase product manager.
After closing up 6.14% to $70.19, Coinbase stock trades in the green at 0.58% to $70.60.