U.S. authorities said Thursday a former product manager at bitcoin exchange Coinbase Global and two other people were charged with wire transfer fraud in connection with an insider trading conspiracy.
In the first case of insider trading involving cryptocurrencies, a former product manager at Coinbase Global and two other individuals were charged with telegraph fraud, according to US authorities in Manhattan on Thursday.
Bitcoin exchange product manager Ishan Wahi and his brother Nikhil Wahi were detained in Seattle on Thursday.
They are also charged with similar civil violations by the US Securities and Exchange Commission, along with third defendant Samir Ramani. Ramani cannot be tracked.
According to the defense’s statement, 32-year-old Ishan Wahi is “innocent of any crime and wants to defend himself firmly.” Nikhil Wahi’s request for feedback from General Counsel was not immediately fulfilled. Reuters did not immediately have access to attorneys representing Ramani.
According to prosecutors, Ishan Wahi has disclosed confidential information about Coinbase’s upcoming announcement of a new digital asset that will allow customers to trade on the platform.
They said Ishan Wahi, who was called to a meeting of Coinbase’s security director, had bought a one-way ticket to India. Police banned him from boarding the plane on May 16, according to authorities.
Ishan Wahi’s bail was set at $1 million and she was instructed to present her passport when she first appeared in Seattle federal court. Despite his apparent efforts to avoid arrest, prosecutors did not ask for his arrest. He is due to appear in his next courtroom in Manhattan on August 2nd.
Nikhil Wahi, 26, and Ramani, 33, are charged with buying and selling at least 25 crypto assets for profit in related civil lawsuits, nine of which claim to have been recognized as securities by the SEC.
The SEC declined to comment, citing that it was still investigating whether the SEC was taking legal action against Coinbase, which listed the coins listed in the complaint as securities.
Prosecutors allege that Wahi and Ramani used an Ethereum blockchain wallet to purchase assets and made at least $1.5 million in illegal profits from Coinbase making at least 14 transactions before going public in June 2021 and April 2022 .
Whether it happens on Wall Street or on the blockchain, it’s a scam, according to Manhattan’s Damien Williams prosecutor.
According to Philip Martin, Coinbase’s chief security officer, the company has released information about its internal investigation into its dealings with authorities.
“We are committed to ensuring that all market participants have access to the same information,” Martin said on Twitter.
Coinbase noted in a blog post that Ishan, Nikhil Wahi, and Ramani had all been individually charged with securities fraud by the SEC, but that federal prosecutors did not file such complaints.
The blog post said, “The assets posted on our site are not securities and the SEC’s claim is an unfortunate circumvention of today’s proper law enforcement action.”
A federal prosecutor in Manhattan last month accused a former product manager of insider trading , saying it was the first case involving digital assets . OpenSea is the largest online marketplace for non-fungible tokens .