U.S. prosecutors in Manhattan said on Thursday that a former product manager at Coinbase Global and two others had been charged with wire fraud in the first insider trading case involving cryptocurrency.

Federal authorities arrested Ishan Wahi, the exchange's product manager, and his brother, Nikhil Wahi, in Seattle on Thursday.

In addition, they and their friend Sameer Ramani face civil accusations from the U.S. Securities and Exchange Commission. According to reports, Ramani remains at large.

Ishan Wahi's attorneys stated in a statement that he is "innocent of all wrongdoing and plans to defend himself strongly."

A lawyer for Nikhil Wahi did not reply to demands for comment immediately. 

According to prosecutors, Ishan Wahi disclosed private information regarding upcoming announcements of new digital assets that Coinbase will permit customers to trade via its exchange.

They added that Ishan Wahi purchased a one-way plane ticket to India after a Coinbase security director summoned him to the Seattle office of the firm for a discussion. Authorities said law enforcement prevented him from boarding his May 16 flight.

Ishan Wahi was compelled to relinquish his passports and bail was set at $1 million at his initial appearance in federal court in Seattle.

Despite his claimed attempt to leave, the prosecution did not ask for his detention. His next appearance in federal court will be on August 2 in Manhattan.

In related civil allegations, the SEC stated that Nikhil Wahi, 26, and Ramani, 33, purchased and sold at least 25 crypto assets for a profit, nine of which were designated as securities by the SEC.

A representative of the commission disclosed that its investigation was underway and declined to comment on whether or not it would take action against Coinbase for listing the coins deemed securities in the complaint.

Prosecutors believe that Wahi and Ramani utilized Ethereum blockchain wallets to acquire the assets and exchanged them at least 14 times prior to Coinbase's statements in June 2021 and April 2022, making unlawful proceeds of at least $1.5 million.

Philip Martin, Coinbase's chief security officer, revealed that the company has submitted the results of its internal investigation into the trading with federal prosecutors. 

In a blog post, Coinbase recognized that the SEC had filed separate securities fraud allegations against Ishan, Nikhil Wahi, and Ramani, but emphasized that federal prosecutors had not filed any such accusations.

Federal prosecutors in Manhattan also charged a former product manager at OpenSea, the largest online marketplace for non-fungible tokens, with insider trading last month.