A former Coinbase product manager, Ishan Wahi, and his brother, Nikhil Wahi accused of insider trading have contended to settle charges with the U.S. Securities and Exchange Commission, according to the press release.
The Wahi brothers agreed, as part of the settlement, not to deny the SEC’s allegations. Speaking on the same, Gurbir S. Grewal, Director of the SEC’s Division of Enforcement stated;
“The federal securities laws do not exempt crypto asset securities from the prohibition against insider trading, nor does the SEC. I am grateful to the SEC staff for successfully working to resolve this matter.”
In July last year, the SEC filed a case against the Wahi brothers and their friend, Sameer Ramani, alleging that the trio amassed up to $1.5 million in profits from insider trading.
In a separate complaint filed on next day, the US agency said that nine of the 25 tokens reportedly traded in the scheme were securities.
The charges issued to Ishan Wahi were wire fraud, and conspiracy to commit wire fraud. Wahi, who worked on Coinbase’s asset-listing team, had prior knowledge of the timing and public announcements of assets the exchange planned to list.
He then proceeded to leak confidential Coinbase information with his brother Nikil Wahi and close associate Ramani under the garb of numerous crypto accounts and anonymous digital wallets.
The indictment claimed then that one of the defendants attempted to leave India the day before a scheduled meeting with the exchange, which led to the defendants’ eventual capture.
Ishan Wahi received a sentence of 24 months in prison and was required to pay 10.97 ether and 9,440 Tether after both brothers admitted guilt to the Department of Justice’s accusations of conspiring to commit wire fraud.
While Nikhil Wahi, his sibling, was given a 10-month term and had to forfeit $892,500. The SEC declared that the brothers’ fines from their criminal case satisfied the settlements in the civil case and that it would not pursue additional penalties.
Coinbase: SEC Dodges Once Again?
The SEC alleged that tokens such as AMP, RLY, and XYO constitute securities in its lawsuit against the Wahis, but it has not accused the creators of these tokens—or even Coinbase, the platform for their listing—of any wrongdoing relating to those tokens.
Although the SEC settlement was viewed as a “meaningful development for the industry”, crypto proponents feel the regulator failed to admit any legal conclusions about the security status of tokens.
