Bitrabo Editorial
The US Securities and Exchange Commission (SEC) has settled insider trading charges with former Coinbase product manager Ishan Wahi and his brother Nikhil Wahi. The SEC alleged that Ishan Wahi helped coordinate Coinbase’s public listing announcements, which included information about the crypto-assets available for trading. Despite warnings, Ishan tipped off his brother and a friend, Sameer Ramani, about the timing and content of upcoming listing announcements. The latter two allegedly purchased at least 25 crypto assets and sold them shortly after announcements for a profit. As part of the settlement, both brothers agreed to be permanently enjoined from violating the Securities Exchange Act and Rule, paying disgorgement of ill-gotten gains plus prejudgment interest. Ishan has been sentenced to 24 months in prison and forfeits 10.97 ether and 9,440 Tether, while Nikhil has been sentenced to 10 months and forfeits $892,500.
Although the technologies were new, the SEC alleges the conduct was not, stating that “tipped and traded securities based on material nonpublic information is insider trading, pure and simple.” Meanwhile, digital currency exchange Coinbase has filed a mandamus petition seeking to compel the SEC to engage in rulemaking regarding digital assets. Coinbase argues that the SEC’s failure to promulgate rules that would enable the industry to understand the SEC’s standards for determining whether digital assets may be securities or provide a workable path to register when required has put the industry in a “Catch-22.”