Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Nikhil Wahi got access to confidential information of token listing through his brother Ishan Wahi who was working at Coinbase. Nikhil purchased the assets before the Coinbase listing and made heavy profits as the token value surged.
On Monday, September 12, the US Attorney for the Southern District of New York, Damian Williams, announced that Nikhil Wahi, the brother of the former product manager at Coinbase has pleaded guilty on account of wire fraud. Nikhil leveraged the confidential information at Coinbase to conduct the insider trading of digital assets.
Insider Trading Case
The Department of Justice (DoJ) arrested Nikhil Wahi earlier this year in July. The US Attorney noted that this is the first time that a defendant had admitted guilt involving the insider trading of cryptocurrencies. In his decision on Monday, US Attorney Damian Williams said:
“Less than two months after he was charged, 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 his guilt in an insider trading case involving the cryptocurrency markets.
Today’s guilty plea should serve as a reminder to those who participate in the cryptocurrency markets that the Southern District of New York will continue to steadfastly police frauds of all stripes and will adapt as technology evolves. Nikhil Wahi now awaits sentencing for his crime and must also forfeit his illicit profits.”
How Nikhil Wahi Executed the Wire Fraud?
As we know, Coinbase is one of the largest crypto trading exchanges in the world. Thus, the listing of any new tokens gets the benefit of strong liquidity from exchange users.
Nikhil’s brother Ishan Wahi started working with Coinbase as a product manager since October 2020. His job was related to the confidential process of listing crypto tokens on exchanges. As per the filing, Ishan Wahi passed on the tips on multiple occasions between July 2021 and May 2022, to his brother Nikhil Wahi.
Nkhil then used an anonymous Ethereum blockchain wallet to buy these assets just before the Coinbase listing announcement. Post the announcements, these tokens would rally and Nikhil used to make heavy profits on it. Reportedly, Nikhil made profits of over $1.5 million over several token purchases.
To hide his purchases before Coinbase listings, Nikhil used centralized exchanges “in the names of others, and transferred funds, crypto assets, and proceeds of their scheme through multiple anonymous Ethereum blockchain wallets”.
In his guilty plea, Nikhil has admitted to the wrongdoing stating that he “knew that it was wrong to receive Coinbase’s confidential information and make trades based on that confidential information”.