A former product manager at Coinbase Global Inc (COIN.O) and his brother have reached a settlement with the U.S. Securities and Exchange Commission (SEC) regarding Insider Trading charges related to crypto asset securities.
The SEC announced that Ishan Wahi and his brother, Nikhil Wahi, have agreed to resolve civil charges concerning their involvement in a scheme to trade ahead of multiple announcements. This involved at least nine crypto asset securities to be listed on Coinbase’s platform, according to a statement by the regulator.
Sentencing for Insider Trading, Lack of Contesting SEC’s Allegations
SEC’s enforcement director, Gurbir Grewal, stated, “While the technologies involved in this case may be new, the conduct is not.”
Ishan Wahi’s lawyer declined to comment on the settlement. Previously, Ishan Wahi had pleaded guilty to related criminal charges. Further, he admitted that he provided confidential information about digital assets to his brother Nikhil and a friend before they were listed on Coinbase. It is one of the world’s largest cryptocurrency exchanges.
Earlier this month, Ishan Wahi was sentenced to two years in prison. Meanwhile, Nikhil Wahi received a 10-month prison sentence in January. Nikhil Wahi’s lawyer did not immediately respond to requests for comment.
Both brothers agreed not to contest the SEC’s allegations of Insider Trading. They did not receive any penalties. Additionally, the disgorgement order by the SEC was considered covered by the associated criminal proceedings.
Coinbase : Involvement and Support of Motion to Dismiss
The case has attracted significant attention as the SEC has become more proactive in regulating the crypto industry. The regulator has argued in lawsuits, including the one against the Wahi brothers, that many digital assets should be classified as securities under its oversight.
However, in his guilty plea, Ishan Wahi expressed his belief that none of the relevant tokens were securities.
Previously, the Wahi brothers had sought to dismiss the SEC’s case against them. While Coinbase was not directly implicated in the SEC’s allegations against the Wahi brothers, the company did file a brief in support of their motion to dismiss.
A spokesperson for Coinbase expressed disappointment that the court would not have an opportunity to consider their motion. Further, he stated that the Wahi settlement does not include any statement or admission that the crypto assets in question are securities.