Ishan Wahi, the former product manager at Coinbase Global, has been sentenced to 24 months in prison by a federal judge for insider trading.
Confidential information used to profit
On May 9, a hearing was held in U.S. District Court for the Southern District of New York in which Judge Loretta Preska sentenced Ishan Wahi to two years in prison for using confidential information obtained while working at Coinbase to profit from new tokens. This led to a total profit of $1.5 million. Wahi has been ordered to report to New Jersey’s Fort Dix Federal Correctional Institution no later than 2 p.m. ET on June 21 to serve his sentence. After his release, he will be under supervision for two years for any concurrent charges.
“You spoke very nicely, you said the right things,” the judge said of Wahi. “I hope you can make amends with your parents.”
According to reports, Ishan Wahi, along with his brother Nikhil Wahi and partner Sameer Ramani, used confidential information obtained from Coinbase to take advantage of new token offerings. This would have made them more than $1 million. In July 2022, Ishan and Nikhil were arrested by US authorities as they attempted to flee to India.
During the trial, Wahi’s lawyer argued that the judge should take into account Ishan’s immigration status in the United States when determining the sentence. In addition, the lawyer stressed that this was a non-violent crime and that Ishan had a “zero criminal history” prior to his arrest. Friends and relatives, including Ishan’s mother, attended the sentencing in person.
“I believe that the court should not impose an additional sentence,” said the counsel. “He has lost his job. He has lost his reputation. He has had a lot of negative publicity both here in the United States and in India.”
Not a one time mistake
Coinbase’s former product manager also addressed the judge directly, saying he was “deeply sorry” for his actions and said he had “made a huge mistake.” Prosecutors argued that unlike his brother Nikhil and Ramani, Ishan was most at fault by orchestrating the insider trading scheme:
This wasn’t a one time mistake – this was over a ten month period. Having access to the kind of information this defendant had access to was like being able to read the newspaper a day in advance.
Both brothers have pleaded guilty to insider trading charges. Ishan reportedly agreed to a prison sentence of 36 to 47 months. In September 2022, Nikhil pleaded guilty to telefraud conspiracy and was sentenced to 10 months in prison. At the moment, Ramani is still at large.
In addition, the US Securities and Exchange Commission (SEC) has also filed a parallel case against Ishan for alleged violations of securities laws. On April 3, it was announced that the SEC had reached an “agreement in principle” with the former Coinbase product manager.