- A former Coinbase product manager has been charged with insider trading
- Shan Wahi allegedly fed his brother and a friend information on token listings, from which they made over $1 million
- The Wahi brothers will appear in court today, while the third man is still at large
A former product manager at Coinbase and two others ran a year-long $1.5 million insider-trading scheme, according to the Department of Justice. Shan Wahi was arrested yesterday in Seattle, Washington, after the DoJ accused him of passing on information regarding upcoming token listings on Coinbase to his brother Nikhil Wahi and his friend, Sameer Ramani. Suspicions were raised in February that Coinbase employees were involved in insider trading, although such suspicions date all the way back to 2017, leading to FBI involvement just weeks later.
Wahi Fed Listing Information to Brother and Friend
The DoJ announced yesterday that all three individuals have been charged with “wire fraud conspiracy and wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information.” At the same time, the Securities and Exchange Commission (SEC) announced that it had filed civil charges against the trio.
The alleged activity dated from August 2021 to around May this year, with the DoJ alleging at least 14 occasions where information from Wahi allowed his brother and Ramani to buy up coins that were about to be listed and sell them if they pumped after the announcement. The scheme involved at least 25 different cryptocurrencies and generated realised and unrealised gains totaling at least approximately $1.5 million.
Wahi Arrested Trying to Leave the Country
Allegations of insider trading at Coinbase date all the way back to the 2017 listing of Bitcoin Cash, although Coinbase cleared itself following an internal investigation, but allegations of this activity surfaced again in February. This action, it seems, helped put the FBI on Wahi’s trail.
The arrest of Shan Wahi was like something out of a movie; on May 11th he got wind of a Coinbase investigation into him and was summoned to a meeting on May 16th, which he said he would attend, but instead booked a one-way ticket to India. He was stopped by police when trying to board the plane. The FBI has also arrested his brother, Nikhil, although Ramani remains at large.
The Wahi brothers will appear today before the United States District Court for the Western District of Washington where they will be arraigned.