Ishan Wahi Settles First Ever U.S. Crypto Insider Trading Case
May 31, 2023
This week, Ishan Wahi and Nikhil Wahi settled civil insider crypto assets trading charges with the U.S. Securities and Exchange Commission (SEC). “While the technologies at issue in this case may be new, the conduct is not,” Gurbir S. Grewal, Director of the SEC’s Division of Enforcement said in a statement.
Starting in October 2020, Ishan Wahi was a product manager at the Seattle office of Coinbase Global. The U.S. company, which has a market value of $15 billion, offers one of the largest global online platforms enabling customers to buy, exchange and trade bitcoin, ether, and other crypto assets.
As part of the asset listing team, Ishan Wahi was involved in the highly confidential process of listing crypto assets on Coinbase’s exchanges. He had detailed, advanced knowledge of which crypto assets Coinbase was planning to list and the timing of public announcements about those crypto asset listings.
From at least June 2021 to April 2022, in breach of his duties at Coinbase, “Ishan repeatedly tipped the timing and content of upcoming listing announcements to his brother, Nikhil Wahi, and his friend, Sameer Ramani,” the SEC said in a statement. “Ahead of those announcements, which usually resulted in an increase in the assets’ prices, Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were securities, and then typically sold them shortly after the announcements for a profit.”
Last month, in a separate criminal case, a judge sentenced Ishan Wahi to serve 24 months in prison and ordered him to forfeit 10.97 ether and 9,440 Tether, he received as part of the insider trading scheme. Nikhil Wahi was sentenced to 10 months in prison and ordered to forfeit $892,500. This followed their pleading guilty to insider and wire fraud charges brought by the U.S. Department of Justice.
Ishan, 32-years-old, and Nikhil Wahi, 26, are Indian citizens who came to the U.S. to pursue college degrees. Sameer Ramani, 33, is an Indian American based in Houston. Ishan and Ramani became friends while studying at the University of Texas, Austin.
Prior to joining Coinbase, Ishan Wahi was the founder of The TeacherAppCo according to Crunchbase. His role in the insider trading scheme was uncovered after a Twitter account, which is well known in the crypto community, tweeted regarding an Ethereum blockchain wallet “that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published.” The reference was to an April 2022 trade conducted by Ramani based on tips provided by Ishan Wahi.
Coinbase replied on Twitter that it had already begun investigating the matter. The company said that the employee who leaked confidential company information would be “immediately terminated and referred to relevant authorities (potentially for criminal prosecution).” Coinbase’s director of security operations emailed Ishan Wahi to appear for an in-person meeting relating to Coinbase’s asset listing process at the company’s Seattle office on May 16, 2022.
Wahi confirmed that he would attend the meeting but instead tried to board a flight to India. He was stopped by law enforcement and prevented from leaving the U.S.
Ishan Wahi’s lawyers sought early dismissal of the SEC case, “arguing the digital assets aren’t securities.” The Wall Street Journal reported. U.S. Attorney Damian Williams said in a statement that Ishan and Nikhil Wahi’s prison sentences “should send a strong signal to all participants in the cryptocurrency markets that the laws decidedly do apply to them.”
In a statement, Gurbir S. Grewal, Director of the SEC’s Division of Enforcement said, “We allege that Ishan and Nikhil Wahi, respectively, tipped and traded securities based on material nonpublic information, and that’s insider trading, pure and simple. The federal securities laws do not exempt crypto asset securities from the prohibition against insider trading, nor does the SEC.
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