Two Indian brothers and their Indian-American friend have been charged in the US in the first-ever cryptocurrency insider trading scheme in which they made illicit profits totalling over a million dollars. Ishan Wahi, 32, and his brother Nikhil Wahi, 26, are citizens of India and were residing in Seattle while Sameer Ramani, 33, resides in Houston.
United States Attorney for the Southern District of New York Damian Williams and Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation Michael J Driscoll announced on Thursday the unsealing of an indictment.
The Wahi brothers and Ramani were charged with wire fraud conspiracy and wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information about which crypto assets were scheduled to be listed on Coinbase’s exchanges.
The Securities and Exchange Commission also announced insider trading charges against the three men.
The Wahi brothers were arrested on Thursday morning in Seattle and will be presented in the United States District Court for the Western District of Washington.
The SEC complaint said Ramani is believed to currently be in India.
Ramani and Ishan Wahi attended the University of Texas at Austin at the same time and remain close friends.
Prosecutors said the three have been charged in the first-ever cryptocurrency insider trading tipping scheme, in which the defendants made illegal trades in at least 25 different crypto assets and realised ill-gotten gains totalling approximately $1.5 million (roughly Rs. 11 crore).
The charges “are a further reminder that Web3 is not a law-free zone. Just last month, I announced the first-ever insider trading case involving NFTs, and today I announce the first-ever insider trading case involving cryptocurrency markets,” Williams said.
“Our message with these charges is clear: fraud is a fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them,” Williams added.
Ishan Wahi is charged with two counts of wire fraud conspiracy and two counts of wire fraud, each of which carries a maximum sentence of 20 years.
Similarly, Nikhil Wahi and Ramani are charged with one count of wire fraud conspiracy and one count of wire fraud, each of which carries a maximum sentence of 20 years.
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