Who is Ishan Wahi and what is crypto insider trading?

4 min read | July 22, 2022 11:35 AM AEST | By Ankit Sethi

Who is Ishan Wahi?

Ishan Wahi is an ex-manager of Coinbase exchange. He is accused of having used confidential information about the forthcoming listings of cryptoassets, including the XYO token, on the exchange to make illicit profits. His brother, Nikhil Wahi, is a co-accused, and the Wahi brothers were arrested on Thursday in Seattle, US. Wire fraud charges have been brought against the two.

Another accused in the fraud is one Sameer Ramani, a Houston resident, who is a long-time friend of Ishan Wahi. The Wahi Brothers are mentioned as Indian citizens in the document released by the Securities and Exchange Commission (SEC). They were residing in Seattle for the past many years.

The related civil proceedings by the SEC shine the light on insider trading. The SEC’s document mentions how the three used insider information on soon-to-be-listed cryptoassets and traded these assets ahead of the listing to book profits. They are said to have made US$1.1 million in illicit wealth by engaging in such unlawful activities.

What is crypto insider trading?

The modus operandi of an insider trading case resembles that of any typical securities fraud. The perpetrators use the confidential information about soon-to-happen events for their own advantage. To preserve the interests of investors, the SEC and other regulators across the world have very stringent provisions on dealing with confidential information that any company and its employees have on tradable assets.

A few people from inside the cryptocurrency industry allege that cryptoassets are not securities that fall under the ambit of regulating agencies. By this measure, the SEC’s insider trading charges against the Wahi brothers do not hold water. Notably, an ex-employee of NFT marketplace OpenSea was also charged with insider trading a few weeks back.

Separately, Bitcoin, the biggest asset in the crypto world is losing sheen this year due to multiple factors including a blow to sentiments after the fall of Celsius and Voyager. As of writing, Bitcoin’s price is nearly US$23,000.

Bitcoin price

Data provided by CoinMarketCap.com

Bottom line

For now, the Wahi brothers and the other accused Sameer Ramani face charges related to misusing their access to confidential information about the listing of new cryptocurrencies on Coinbase. Sameer Ramani is yet to be arrested. How the SEC proceeds with this case might set the stage for how civil and criminal proceedings progress in crypto-related matters.

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