A former Coinbase product manager was sentenced to two years in federal prison for his role in a crypto insider trading scheme.
Ishan Wahi was sentenced Tuesday by Judge Loretta Preska in U.S. District Court for the Southern District of New York, according to a Department of Justice (DOJ) press release. He was also ordered to forfeit crypto assets he received in connection with the scheme, prosecutors said.
The DOJ previously said the case was its first enforcement of insider trading on crypto assets.
Between June 2021 and April 2022, Wahi provided confidential listing information about which digital assets would be listed on the Coinbase exchange to his brother, Nikhil Wahi, and a friend, Sameer Ramani, prosecutors said. The two men arranged for profitable trades on the digital assets before they were listed on the exchange.
Coinbase conducted an inquiry into the scheme when several Twitter users alerted them to potential illegal trading activity in crypto assets made by Ramani. Coinbase said in a blog post any employee who leaked confidential information would be “immediately terminated and referred to relevant authorities (potentially for criminal prosecution),” according to the DOJ.
Coinbase’s director of security operations scheduled an in-person interview with Ishan Wahi for May 16, 2022, at the company’s Seattle office. Wahi attempted to board a one-way flight to India on that same day when he was stopped by law enforcement and prevented from leaving the country.
In January, Nikhil Wahi was sentenced to 10 months in prison and ordered to disgorge $892,500 in illicit profits from the scheme. Ramani has not been arrested and is believed to have fled the country.
Coinbase did not respond to a request for comment.