Coinbase to Get $470K in Restitution in Insider Trading Case

Coinbase to get $470K in Restitution in Insider Trading Case
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As per a recent development, the brother of a former Coinbase employee has agreed to pay a sum of $470K over his involvement in insider trading. Nikhil Wahi, the brother of the former Coinbase Product Manager, Ishan Wahi, will make these payments while spending time in prison. Even though a number of insider trading cases have emerged over the years, this one is the first one involving cryptocurrencies.

Furthermore, the fine would be paid in full within the 20 years following Nikhil’s release from prison. The figure represents the amount Coinbase spent on all legal investigations relating to the case by the Department of Justice. Back in September 2022, Nikhil pleaded guilty to initiating trades revolving around sensitive and confidential information which was obtained by his brother and is currently facing jail time for a total of 10 months.

Coinbase stated that it actively monitors any possible misconduct or illegal action from its platform. Back in April, Coinbase received a tip regarding the possible frontrunning of assets prior to them being listed on the exchange. Keeping the potential threat in mind, an investigation was launched on an immediate basis.

Coinbase Emerges Victorious

Soon after the investigation was launched, Coinbase announced that it had identified three culprits, and provided the necessary information to the authorities. The three employees were instantaneously terminated and held accountable. 

Based on his position in Coinbase, the prosecutors believed that Ishan knew when the firm would list new cryptocurrencies and informed his brother, and another associate, identified as Sameer Ramani.

Soon after the listing, the prices of these cryptocurrencies shot sky-high, resulting in Nikhil earning a total profit of approximately $892,500. However, as a part of his sentencing, he was asked to surrender the entire amount to the US government.

Coinbase Emerges Victorious From The Insider Trading Case

Corporate governance has been made increasingly strict by authorities, especially due to major corporate scandals. One of the core elements corporate governance emphasizes is insider trading, which is deemed to ruin organizations. Over time, a number of strict punishments were set in motion to prevent individuals from conducting insider trading cases.

Regulatory Pressure and Coinbase’s Growth

Over the last year, the SEC and other regulatory authorities have kept a strict check on crypto firms and exchanges. Coinbase has remained on the hitlist of the authorities, as its staking service and spot market were subject to criticism by the authorities. However, the exchange is pulling through tough times to continue its growth trajectory, as its financials are getting better after the tough last few quarters. 

Most recently, the Head of Exchange and Markets at Coinbase, Vishal Gupta has resigned from the post after serving for almost three years. He was a key figure in mapping out Coinbase’s growth policies and new projects during the tenure. Also, his departure is a setback for Coinbase because it comes at a time when the exchange was served a Wells Notice by the SEC. He stated,

“I’m proud of the team we’ve created at @coinbaseexch. It’s been an honor to work alongside the Coinbase exec team and I wanted to express my deep appreciation for the leadership opportunities @brian_armstrong, @surojit, @GregTusar, and others have provided me.”


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