Ishan Wahi, who used to work at Coinbase, and his brother Nikhil Wahi have settled insider trading charges with the Securities and Exchange Commission (SEC). They were accused of using confidential information about new cryptocurrencies that were added to Coinbase to make money.
Today former Coinbase product manager Ishan Wahi and his brother, Nikhil Wahi, agreed to settle charges that they engaged in insider trading through a scheme to trade ahead of multiple announcements regarding at least nine crypto asset securities.https://t.co/yt2hHEAJMV pic.twitter.com/6dy9KMd5mY
— U.S. Securities and Exchange Commission (@SECGov) May 30, 2023
Ishan Wahi used to help Coinbase announce what new cryptocurrencies would be added for trading. This information was supposed to be confidential, and Coinbase told its workers not to use it to make trades or tell others about it. But the SEC says that Ishan told his brother Nikhil and his friend Sameer Ramani when these announcements would occur between June 2021 and April 2022. Nikhil and Sameer then bought these cryptocurrencies ahead of the announcements, which typically drove their prices up, and they sold them. later for a profit.
Regulation and Enforcement: The SEC Steps In
The SEC’s position is clear: federal securities laws apply to crypto asset securities just as much as traditional securities.
“While the technologies at issue in this case may be new, the conduct is not. We allege that Ishan and Nikhil Wahi, respectively, tipped and traded values based on material non-public information, and that is insider trading, pure and simple,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. .
The SEC’s lawsuit, which was filed on July 21, 2022, in the US District Court for the Western District of Washington, led to the settlement in which the Wahi brothers agreed not to deny the SEC’s allegations.
The criminal case and final sentences
Following the insider trading charges, the Wahi brothers also faced criminal prosecution. They pleaded guilty to conspiracy to commit wire fraud, with Ishan Wahi receiving a 24-month prison sentence and a forfeiture order of 10.97 ether and 9,440 Tether. Nikhil was sentenced to 10 months in prison and ordered to forfeit $892,500. The SEC has decided not to ask for more money because the brothers have been sentenced to prison.
Today's SEC settlement (i) doesnt admit any legal conclusions about the security status of tokens; (ii) doesnt require Wahi to pay any additional penalties (in addition to those due for separate criminal case); and (iii) includes immaterial injuction not to violate Section 10(b) pic.twitter.com/qHOfcaIVk2
— Rodrigo (@RSSH273) May 30, 2023
the unresolved questions
This SEC settlement raises some important questions. Why didn’t they say if the tokens are securities or not? Is it because they are not sure how to classify them? Are they still trying to figure out where they stand or are they just hesitant to apply the old rules to these new types of assets? Only time will tell!
This post Coinbase Insider Trading Agreement: Are Crypto Tokens Really Securities? SEC remains silent!
was published first on https://coinpedia.org/news/coinbase-insider-trading-settlement-are-crypto-tokens-really-securities-sec-stays-silent/