Former Coinbase product manager Ishan Wahi pleaded guilty to charges Tuesday, centered on an insider trading scheme that generated an alleged $1.1 million in profits.
Wahi pleaded guilty to two counts of conspiracy to commit wire fraud brought against him by prosecutors in the Southern District of New York. Wahi had previously pleaded not guilty to wire fraud charges in August.
The former employee of the San Fransisco-based exchange was accused of sharing information about upcoming token listings with his brother Nikhil and their friend Sameer Ramani. Wahi’s brother pleaded guilty to one count of conspiracy to commit wire fraud in September and later received a 10-month sentence.
Federal prosecutors have described the matter as the first insider trading case involving cryptocurrencies. Charges related to the insider trading scheme were brought against the three individuals involved last July.
Wahi currently faces other charges brought against him by the Securities and Exchange Commission with groundbreaking precedent for the cryptocurrency industry. When the SEC charged Wahi in July, the agency alleged that at least 9 of the 25 tokens involved in the case were securities.
Attorneys on behalf of Wahi filed a motion to dismiss the case yesterday, arguing that tokens traded on the secondary market do not constitute securities, according to a recent court filing.
“In addition to holding Ishan and Nikhil Wahi liable for actions nobody could have anticipated would violate the securities laws [...] it would establish sweeping SEC jurisdiction over an industry without any input from Congress,” the document states. “There is also no need to stretch securities laws into the digital asset space”