Former Coinbase product manager pleads guilty to insider trading

A former product manager at Coinbase pleaded guilty Tuesday to a federal felony charge in the first insider trading case involvingcryptocurrencies, Reuters reported.

Ishan Wahi, 32, pleaded guilty to two counts of conspiracy to commit wire fraud after initially pleading not guilty last year, his defense lawyer said in a court hearing. According to the prosecutors, Wahi shared confidential information with his brother Nikhil and his friend Sameer Ramani about upcoming announcements of new digital assets that Coinbase would let users trade.

Wahi and Ramani were charged with using the ethereum blockchain wallet to acquire digital assets and trading at least 14 times before Coinbase announcements between June 2021 and April 2022. Prosecutors said such announcements typically caused the value of assets to rise and generated at least 1.5 million in illicit gains.

Wahi was later convicted of a wire fraud conspiracy charge in September 2022, and in January was sentenced to 10 months in prison while Ramani remains at large.

The news comes just a month after Coinbase Global reached a $100 million deal to settle with US regulators over anti-money-laundering law violations. Coinbase agreed to pay $50 million in fines after financial regulators found that it let customers open accounts without doing background checks. The settlement closes the investigation into the firm's compliance with the requirements to prevent money laundering.

The San Francisco-based Coinbase is a digital currency wallet and platform where merchants can transact with new digital currency, like Bitcoin, Ethereum, and Litecoin, founded in 2012 by Brian Armstrong and Fred Ehrsam. Over the past 14 rounds, Coinbase has raised $847.3 million in funding since its inception nine years ago. The funding was raised on December 21, 2018 from a secondary market round.