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Brother of former Coinbase employee pleads guilty to insider trading charges: Report

by SuperiorInvest

Nikhil Wahi, who was arrested for allegedly working with his brother and an associate in an insider trading scheme using cryptocurrencies, has reportedly pleaded guilty to wire fraud conspiracy charges.

According to a Reuters report on Monday, Wahi he admitted to authorities during a virtual hearing that he used confidential information obtained from Coinbase to profit from cryptocurrency trading. Wahi’s brother Ishan worked as a product manager at Coinbase and during this time he allegedly shared information about the token launch dates with his brother and associate Sameer Ramani. The trio allegedly used the inside information to make roughly $1.5 million from it trading 25 different cryptocurrencies between 2021 and 2022.

“I knew it was wrong to take Coinbase’s confidential information and trade based on that confidential information,” Wahi reportedly said in court.

Wahi and his brother were arrested and charged in Seattle in July, while Ramani remained at large at the time of publication but still faced similar charges. Cointelegraph reported that Ishan pleaded not guilty to wire fraud conspiracy and fraud charges in August. Reuters reported that Nikhil initially pleaded guilty but changed his plea as part of a deal with prosecutors.

In parallel proceedings against the trio, the US Securities and Exchange Commission (SEC) filed a complaint alleging that the Wahís and the Ramanis violated anti-fraud provisions of the securities laws. The same filing claimed that at least 9 of the 25 tokens involved in the insider trading scheme were “crypto-asset securities” subject to SEC jurisdiction. Critics of the case have the regulator claimed took a “regulation by enforcement” approach rather than waiting for legislation to clarify the SEC’s role.

Related: Plaintiffs want to claim NFTs as securities, says former OpenSea employee’s legal team

Sep 8 Coinbase announced support for Tornado Cash users who sued the U.S. Treasury Department, alleging that the department illegally added smart contract addresses for a cryptocurrency mixer to the Office of Foreign Assets Control’s list of specially designated nationals. Coinbase CEO Brian Armstrong he said the exchange had a “responsibility to defend the crypto industry against actions that go too far and treat crypto on an uneven playing field.”

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