The brother of a former Coinbase Global Inc (COIN.O) product manager pleaded guilty on Monday to a wire fraud conspiracy charge, in what U.S. prosecutors have called the first insider trading case involving cryptocurrency.
Nikhil Wahi, 26,admitted during a virtual court hearing before U.S. District Judge Loretta Preska in Manhattan that he made trades based on confidential Coinbase information.
Prosecutors say Ishan Wahi, the former product manager, shared confidential information with his brother and their friend Sameer Ramani about new digital assets Coinbase was planning to let users trade.
Nikhil Wahi and Ramani then allegedly used ethereum blockchain wallets to acquire the assets and traded at least 14 times before Coinbase announcements in June 2021 and April 2022.
Those announcements typically caused the assets to rise in value and generated at least $1.5 million in gains, prosecutors said.
“I knew that it was wrong to receive Coinbase’s confidential information and make trades based on that confidential information,” Nikhil Wahi told the judge.
He said he understood that his guilty plea meant he would eventually be deported from the United States and “lose everything that I have worked for.”
Nikhil Wahi had pleaded guilty last month, but changed his plea through an agreement with prosecutors. His sentencing will be in December.
Ishan Wahi has pleaded not guilty and is next scheduled to appear in court on March 22. Ramani, who was also charged, is at large.
Coinbase, which said it shared with prosecutors its findings from an internal probe into the trading, is one of the world’s largest cryptocurrency exchanges.