Ishan Wahi got a lot of money from what is called the “Coinbase effect.”
Today, a former Coinbase product manager was sentenced to two years in prison for insider trading, marking the first case of its kind in the cryptocurrency industry.
Former Coinbase product manager gets two years for insider trading
Ishan Wahi, aged 32, and his accomplices, among them his brother Nikhil, reportedly earned more than $1.5 million by investing in new digital assets just prior to their listing on the largest cryptocurrency exchange in the United States.
Using his knowledge of incoming assets, Wahi was able to purchase them and then transfer them for enormous profits. When the San Francisco-based exchange lists new coins and tokens, their value rapidly increases; this phenomenon is known as “the Coinbase effect.”
After being questioned by Coinbase, the Indian national attempted to depart the country, according to the Department of Justice. American police prevented him from boarding a flight to India.
In February, Wahi pled guilty to two counts of wire fraud conspiracy brought against him by prosecutors in the Southern District of New York.
U.S. Attorney Damian Williams stated in a statement issued on Tuesday that Wahi “violated the trust placed in him by his employer” by revealing secret listings.
“Today’s sentence should send a strong signal to all participants in the cryptocurrency markets that the laws decidedly do apply to them,” he added.
The U.S. Securities and Exchange Commission also filed civil charges against Wahi, his brother, and his friend Sameer Ramani.
Less than a week before the sentence, the former head of product at NFT market place OpenSea was found guilty of fraud and money laundering in the first insider trading scheme involving digital assets.
Nathaniel Chastain, who was 32 years old at the time, bought NFTs that he wanted to put on the trading platform and then sold them soon after. He did this illegally to make more than $50,000.
The defendant is yet to receive his sentence, but he could potentially face a maximum of 20 years in prison for each of the charges against him.
Content Source: decrypt.com