Ishan Wahi, who helped oversee listings for a Coinbase unit focused on investment products, was arrested on Thursday as part of a broad investigation involving the Southern District of New York and the Securities and Exchange Commission. Wahi was also accused of violating the SEC’s anti-fraud rules, according to the SEC.
“Today’s charges serve as a reminder that Web3 is not a law-free zone,” said Manhattan US Attorney Damian Williams in a statement. “These charges send a clear message: fraud is a fraud, no matter where it occurs. Coinbase had also contributed to the investigation.
The Coinbase platform allows American users to trade more than 150 tokens, most of which have been added in recent months. Because the platform is the largest in the United States,
According to charges filed in New York on Thursday, Wahi tipped off his brother, Nikhil Wahi, and friend Sameer Ramani when tokens were about to be listed by the exchange. According to the government, Nikhil Wahi and Ramani allegedly used that information to trade dozens of tokens from at least June 2021 to April 2022 for a profit of more than $1 million.
The three men were charged with wire fraud conspiracy and wire fraud by prosecutors, and the SEC accused them of insider trading.
Ishan Wahi’s attorney, Andrew St. Laurent, declined to comment. According to the US Attorney’s office, Ramani, 33, is still at large. In a statement, Priya Chaudhry, a lawyer for Nikhil Wahi, 26, who was also arrested, said her client did nothing wrong. “These prosecutors are attempting to criminalize innocent behavior because they are looking for a scapegoat because so many people have recently lost money in cryptocurrency,” Chaudhry explained. “The government is humiliated, and arresting Nikhil Wahi is a last-ditch effort to save face.”
“We take any illegal behavior extremely seriously.” “We have zero tolerance for it,” said Coinbase’s chief legal officer, Paul Grewal. He stated that after learning of a potential insider trading issue, Coinbase immediately launched an investigation and placed Wahi on unpaid administrative leave. Grewal stated that Wahi was officially fired on July 15.