The Block: Former Coinbase product manager pleads guilty to criminal charges in landmark case

A former Coinbase product manager pleaded guilty on Tuesday to wire fraud charges in a criminal case brought against him.

The Justice Department indicted Ishan Wahi in July, alongside his brother and friend, in connection with an insider trading scheme to front-run listings of new tokens on Coinbase. Wahi entered guilty pleas for two counts of conspiracy to commit wire fraud, with sentencing to take place on May 10. He faces up to 40 years in prison under sentencing guidelines, but is likely to receive a more lenient punishment due to his cooperation.

The guilty plea may moot a legal argument in separate civil charges brought by the Securities and Exchange Commission as to whether the nine tokens in question are securities. Lawyers for Wahi filed a motion to dismiss that case last night. The agency said Wahi tipped off his friend and brother about which tokens were going to be listed for trading on Coinbase — and in the process made over $1 million. That case remains ongoing, pending a decision in the motion to dismiss.

"Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets," U.S. Attorney for the Southern District of New York Damian Williams said in a statement. "Whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime."

Coinbase had investigated Wahi's activity itself prior to the criminal and civil indictments, and is not accused of wrongdoing.

Nikhil Wahi, the brother of the ex-Coinbase manager pleaded guilty in September to a wire fraud conspiracy charge.

David Miller, a shareholder at Greenberg Traurig, LLP, representing Ishan Wahi, declined to comment.

Updated with additional information from the Justice Department and Williams statement.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.