A former Coinbase product manager was sentenced to two years in prison on Tuesday on two conspiracy charges related to what the the Department of Justice called the “first ever cryptocurrency insider trading tipping scheme.”
Ishan Wahi, 32, pleaded guilty in February after being indicted last year over the scheme, which involved telling his brother and a friend which cryptocurrencies were set to be listed on the Coinbase crypto exchange on at least 14 occasions. The scheme netted the trio gains of about $1.5 million, according to the DOJ.
“Today’s sentence should send a strong signal to all participants in the cryptocurrency markets that the laws decidedly do apply to them,” Damian Williams, the U.S. Attorney for the Southern District of New York said in a Tuesday statement.
Attorneys for Wahi did not immediately respond to Fortune’s request for comment.
Although each count carried, respectively, a maximum sentence of 20 years, prosecutors called for him to face 36 to 47 months, between three and four years, in prison as part of a plea deal, Reuters reported.
In April, Wahi asked for a lighter sentence similar to that of his brother, Nikhil Wahi, 27, who was sentenced to 10 months in prison and ordered to pay $892,500 in forfeiture after pleading guilty to a wire fraud conspiracy charge. The other person Wahi gave information to, Sameer Ramani, has been charged but is still at large.
Attorneys said in a memorandum in April that Ishan Wahi had fully accepted responsibility for his role in the scheme, and that the ruining of his reputation was already a punishment.
“Ishan’s acceptance of responsibility has been swift, sincere, and complete,” Wahi’s lawyers wrote in a memorandum last month.
After Coinbase investigated suspicious trades, they called Wahi in for a meeting last year. Wahi tipped off his brother, Nikhil Wahi, and Ramani about Coinbase’s investigation and bought a plane ticket to India that was set to leave hours before the meeting. Prior to boarding, Wahi was stopped by law enforcement.
Wahi’s case comes after Nate Chastain, a former employee of NFT marketplace OpenSea was found guilty of wire fraud and money laundering in the first NFT-related “insider trading” case. Chastain was found guilty of using inside information he had about what NFTs were going to be listed on OpenSea’s homepage to personally pocket thousands of dollars. Sentencing is set for August 22.
In the most high-profile cryptocurrency case, attorneys for disgraced FTX CEO Sam Bankman-Fried argued in an overnight filing that all but three of the now thirteen charges against him should be dismissed.
