NEW YORK (1010 WINS) — A man pleaded guilty to insider cryptocurrency trading in the first ever federally prosecuted case of the crime, authorities said Monday.
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The 26-year-old Seattle, Washington man, Nikhil Wahi, pled guilty to one count of conspiracy to commit wire fraud and is facing up to 20 years in prison.
“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,” said U.S. Attorney Damian Williams. “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.”
Wahi’s brother, Ishan Wahi, used to work as a product manager for Coinbase, one of the largest cryptocurrency exchanges in the world. Between July 2021 and May 2022, Ishan gave tips to Nikhil as to which crypto assets Coinbase was planning to list on its exchanges, officials said.
Nikhil would use anonymous Ethereum blockchain wallets to acquire the crypto assets just before Coinbase publicly announced that they were listing them on their exchanges. After Coinbase listed the announcements, Nikhil sold the crypto assets, according to court documents.
In order to hide his crypto assets purchases before Coinbase listed the announcements, Nikhil would use accounts at centralized exchanges in other people’s names. Nikhil would then transfer funds, crypto assets and proceeds through multiple anonymous Ethereum blockchain wallets, frequently creating new ones without any prior transaction history to continue to conceal his scheme.
Nikhil is scheduled to be sentenced on December 13.
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