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Court Hands 2-Year Sentence to Former Coinbase Product Manager for Insider Trading

The recent update from the Southern District Court of New York confirms a former Coinbase executive in product management is to serve a two-year sentence. The ruling is unsurprising given that Ishan Wahi confessed to making huge gains from executing the ‘Coinbase effect.’

Insider Trading Earned Wahi $1.5 Million

In her ruling, the Southern District Court of New York judge held that the 32-year-old Indian national, alongside his associates, earned $1.5 million through insider trading. The prosecution proved that Wahi and associates invested in new digital assets before listing at the San Francisco-based exchange. 

The May 9 hearing saw Judge Loretta Preska order Wahi to serve 24 months in prison for leveraging his role as head of product to access confidential information to enrich himself and associates. 


The court held that Wahi and brother Nikhil leveraged the information of the impending listing, thereby profiting from capital gains realized in the new digital assets. The two-year imprisonment is the first conviction of any perpetrator of insider trading within the crypto sector. 

Coinbase Effect Exploited by Product Manager to Earn Illegal Profit

The court heard that Wahi was privy that the incoming assets would realize immense market acceptance, making it easy to sell and reap huge profits. 

The judge observed that Wahi and associates would leverage the Coinbase effect that arises when new coins and tokens rapidly shoot up in value upon their listing on the San Francisco-based exchange. 

The Department of Justice (DoJ) illustrated that the Indian national attempted to flee the US following the inquiry by Coinbase. However, the American authorities prohibited Wahi from boarding the flight to India.  

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Wahi confessed in February conspiring to orchestrate wire fraud, as alleged by the prosecutors in their filing before the Southern District of New York. He pleads guilty to the two counts.

Wahi to Serve Supervised Release

In his statement conveyed on Tuesday, May 9, the US attorney Damian Williams indicated that the embattled product management broke the trust bestowed upon him by the employer. He added that sharing the secret listings broke the employer-employee trust. Consequently, the ruling serves as a stern warning to the participants in the digital assets sector that laws against insider trading would decidedly apply to them.

Williams indicates that the sentence warns other crypto market participants that security laws similarly apply to those orchestrating fraud-based enrichment. The ruling reveals the devotion to tame insider trading. Its discovery could spell doom for digital assets and the entire crypto industry.

The case attracted US Securities and Exchange Commission (SEC) attention. SEC claims that the three defendants had acquired over 25 cryptos. SEC attorneys illustrated that nine of the cryptos batch 9 securities. Nevertheless, the SEC failed to reveal the assets allegedly acquired by the three defendants. 

The Garry Gensler-led SEC initiated civil charges against Wahi, their friend, and their sibling Sameer Ramani for their wrongdoing.  Nonetheless, Ramani remains at large.

Wahi’s counsel and parents sought a reduced sentence since the Indian national did not have prior criminal history. The counsel portrayed Wahi as non-violent. The convict’s mother and relatives echoed the counsel’s submission requesting for leniency.

Judge Preska ordered the Wahi to proceed to the Fort Dix Federal Correctional facility to start serving the sentence on June 21 at 0200pm ET. Upon completing the 24-month sentence in New Jersey, Judge Preska ordered Wahi to comply with a further 24 months of supervised release for a single count. However, each count would run concurrently. 

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OpenSea Product Manager Convicted of Money Laundering

The sentencing coincides with the conviction of OpenSea’s former product executive at OpenSea. The court last week held a former executive at the NFTs marketplace guilty of perpetrating money laundering by using an insider trading scheme of digital assets. 

The prosecution of Nathaniel Chastain alleged that he acquired NFTs to participate in the OpenSea trading platform. The thirty-two year only would realize $50000 in profits. The court’s judge indicated that he would sentence Nathaniel later. However, the former product executive faces imprisonment of 20 years for each charge.  

Editorial credit: 24K-Production /

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Stephen Causby

Stephen Causby is an experienced crypto journalist who writes for Tokenhell. He is passionate for coverage in crypto news, blockchain, DeFi, and NFT.

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