SEC Hits Former Coinbase CEO With Insider Trading Charges – Identifies 9 Crypto Tokens As Securities – Regulation Bitcoin News

The US Securities and Exchange Commission (SEC) has announced insider trading charges against a former Coinbase CEO, who has been arrested and is also facing criminal charges. The regulator has identified nine crypto-tokens as securities in the complaint. US Attorney Damian Williams says it is “the first ever insider trading case involving cryptocurrency markets”.

SEC charges former Coinbase Manager, his brother and a friend – 9 crypto tokens identified as securities

The US Securities and Exchange Commission (SEC) on Thursday announced “insider trading charges against a former Coinbase product manager, his brother and his friend”.

The SEC detailed: “While Ishan Wahi was employed by Coinbase, he helped coordinate the platform’s public listing announcements that included which cryptoassets or tokens would be made available for trading.” The regulator added that from at least June 2021 to April 2022:

In defiance of his duties, Ishan repeatedly tipped off the timing and content of upcoming listing announcements to his brother Nikhil Wahi and friend Sameer Ramani.

“Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were securities, and typically sold them shortly after the announcements for a profit. The lengthy insider trading scheme generated illegal profits totaling more than $1.1 million,” the SEC noted.

The nine crypto-asset securities named in the SEC complaint are AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX and KROM.

The securities watchdog accused Ishan Wahi, Nikhil Wahi and Ramani of “violating the anti-fraud provisions of the securities laws”. The regulator is seeking “permanent injunction, disgorgement with prejudgment interest and civil penalties.”

Criminal charges

In a parallel action, the US Attorney’s Office for the Southern District of New York also announced charges against all three people on Thursday.

According to an announcement released by the Department of Justice (DOJ), the three are charged “in connection with a scheme to commit insider trading in cryptocurrency assets using confidential Coinbase information about which cryptoassets were scheduled to be listed on Coinbase’s exchanges .”

Ishan Wahi and Nikhil Wahi were arrested Thursday morning in Seattle, Washington. However, Sameer Ramani is still at large.

United States Attorney Damian Williams commented:

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.

FBI Assistant Director Michael J. Driscoll said, “The defendants made illegal trades in at least 25 different cryptoassets and realized ill-gotten gains totaling approximately $1.5 million.”

All three individuals are charged with “two counts of wire fraud conspiracy and two counts of wire fraud, each of which carries a maximum sentence of 20 years,” the DOJ noted.

The Department of Justice announced the first-ever insider trading case involving non-fungible tokens (NFTs) in June. The defendant allegedly used NFT platform Opensea’s confidential information about which products were to be featured on the homepage “to secretly purchase dozens of NFTs shortly before they were featured,” the DOJ detailed.

What do you think about this crypto insider trading case involving a former Coinbase manager? Let us know in the comments section below.

Kevin Helms

A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.