SEC Slaps Former Coinbase Manager With Insider Trading Charges — Identifies 9 Crypto Tokens as Securities – Regulation Bitcoin News

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SEC Slaps Former Coinbase Manager With Insider Trading Charges — Identifies 9 Crypto Tokens as Securities – Regulation Bitcoin News
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The U.S. Securities and Exchange Commission (SEC) has announced insider trading charges against a former Coinbase manager who has been arrested and faces criminal charges. The regulator identified nine crypto tokens as securities in the complaint. U.S. Attorney Damian Williams said it was “the first-ever insider trading case involving the cryptocurrency market.”

SEC Charges Former Coinbase Manager, His Brother and a Friend – Nine Crypto Tokens Designated as Securities

The U.S. 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: “During his time at Coinbase, Ishan Wahi helped coordinate the platform’s public listing announcements, which included which crypto assets or tokens were available for trading.” The regulator added that from at least June 2021 to April 2022:

Ishan violated his duties by repeatedly revealing the timing and content of the upcoming listing announcement to his brother Nikhil Wahi and his friend Sameer Ramani.

“Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were securities, and then sold them for profit, usually shortly after the announcement. The long-running insider trading scheme generated a total of more than $1.1 million illegal profits,” the SEC noted.

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

The securities regulator charged Ishan Wahi, Nikhil Wahi and Ramani with “violating the anti-fraud provisions of the securities laws.” The regulator is seeking “permanent injunctive relief, disgorgement with prejudgment benefits and civil penalties”.

criminal charges

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

According to an announcement issued by the U.S. Department of Justice (DOJ), the three were charged “in connection with a scheme to conduct insider trading in cryptoassets through the use of confidential Coinbase information about which cryptoassets were planned to be listed on the Coinbase exchange.”

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

US Attorney Damian Williams commented:

Just last month, I announced the first insider trading case involving NFTs, and today I announced the first insider trading case involving the cryptocurrency market.

FBI Assistant Director Michael J. Driscoll said: “The defendants illegally traded at least 25 different cryptoassets and realized a total of approximately $1.5 million in ill-gotten gains.”

All three were charged with “two counts of conspiracy to commit wire fraud and two counts of wire fraud, each with a maximum sentence of 20 years,” the DOJ noted.

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

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

Kevin Helms

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

Image credits: Shutterstock, Pixabay, Wiki Commons

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