In An Insider Trading Case, The Brother Of An Ex-Coinbase Manager Was Sentenced To Ten Months in Pri

NEW YORK, 10 JAN (Reuters) - The brother of a former Coinbase Global Inc (COIN.O) product manager was sentenced to ten months in jail on Tuesday after pleading guilty in what US authorities termed the first cryptocurrency insider trading case.

When he pled guilty to a wire fraud conspiracy charge in September, Nikhil Wahi acknowledged making transactions based on sensitive information obtained from Coinbase, one of the world's biggest cryptocurrency exchanges.

Prosecutors said that Ishan Wahi, the former product manager, told his brother and their friend Sameer Ramani about new digital assets that Coinbase planned to allow customers to trade.

Ishan Wahi has pled not guilty, while Ramani is still on the loose.

Prosecutors allege that Wahi profited over $900,000 by unlawfully trading ahead of 40 distinct Coinbase announcements. They suggested a sentence of 10 to 16 months.

During a sentencing hearing in federal court in Manhattan, U.S. District Judge Loretta Preska said that his offense was “not an isolated mistake in judgment.”

The sentence came as prosecutors and authorities in the United States increased their investigation of bitcoin businesses and executives.

“Today's punishment demonstrates that the cryptocurrency markets are not lawless,” said Damian Williams, Manhattan's chief federal prosecutor, in a statement.

Last month, FTX founder Sam Bankman-Fried pled not guilty to eight charges of fraud and conspiracy in connection with the demise of his now-defunct exchange, a Coinbase competitor.

The crypto industry is also hurting, as the value of bitcoin and other digital assets fell last year as interest rates climbed and fears of an economic crisis increased.

Coinbase said on Tuesday that it will lay off around 20% of its staff, or 950 individuals, in the third wave of layoffs since last year.

Wahi's mother, as well as roughly a dozen other family members and acquaintances, were present for his sentencing.

He informed Preska that he had traded in order to reimburse his parents for paying for his undergraduate studies in the United States.

“I intended to assist my parents, but instead I caused them immense pain,” Wahi said, whose lawyer had begged Preska not to send him to jail.“ I sincerely apologize for what I did.”

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