Former Coinbase product manager Ishan Wahi and his brother, Nikhil Wahi, have just reached an agreement with the US Securities and Exchange Commission (SEC) to settle charges arising from an insider trading scheme involving crypto assets.
In July 2022, the SEC filed a complaint accusing Ishan Wahi of giving his brother and a friend, Sameer Raman, confidential information about which crypto assets would be supported by Coinbase.
The price of crypto assets often goes up once their listing is announced on the platform. Nikhil Wahi and Raman then bought tokens based on the insider tip which allowed the trio to amass $1.5 million in illicit profits. The securities regulator says nine out of 25 crypto assets purchased are securities.
According to the SEC, the Wahi brothers agreed not to deny the agency’s allegations as part of the settlement.
“Ishan Wahi and his brother, Nikhil Wahi, agreed to settle allegations that they engaged in insider trading through an arrangement to deal ahead of multiple announcements regarding at least nine crypto-asset securities available would be made for trading on the Coinbase platform.
Ishan and Nikhil Wahi each agreed to be permanently sentenced to violating Section 10(b) of the Securities Exchange Act and Rule 10b-5 and to pay ill-gotten gains, plus conservatory interest.”
Gurbir S. Grewal, director of the SEC’s enforcement division, says that while the technology involved in the case is new, the scheme is essentially classic insider trading.
“We allege that Ishan and Nikhil Wahi, respectively, have tipped and traded securities based on material non-public information, and that is insider trading, pure and simple. Federal securities laws do not exempt crypto-asset securities from the prohibition of insider trading, and neither does the SEC.
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