Ishan Wahi, a former product manager at Coinbase, and his brother were accused in the SEC lawsuit of using inside information to trade securities backed by digital assets.
The United States Securities and Exchange Commission (SEC) filed allegations of insider trading against Ishan Wahi, a former Coinbase product manager, and his brother Nikhil Wahi, the agency stated on May 30. In the Western District of Washington U.S. District Court, the SEC has submitted a move for final judgment.
The Wahi brothers are accused by the SEC of making purchases ahead of the listings of “at least” nine crypto assets that would be listed on Coinbase in the future. On July 21, 2022, a lawsuit was submitted accusing them of insider trading. The SEC is requesting the disgorgement of illegally obtained gains along with interest as part of the settlement.
Ishan Wahi was found guilty on May 9 and given a sentence of 24 months in prison by the U.S. District Court for the Southern District of New York. The SEC said in April that it had struck “an agreement in principle” with Wahi. Wahi had profited up to $1.5 million through unlawful trading, the court determined. On the other side, the same court had already given Nikhil Wahi a 10-month prison term in January.
In the SEC’s action, it was claimed that Sameer Ramani and the Wahis had dealt in “crypto asset securities.” This assertion spurred debate and arguments on how to categorize tokens and their regulatory ramifications.
Caroline Pham, a commissioner with the U.S. Commodity Futures Trading Commission, issued a warning that the classification of tokens, particularly utility tokens and those connected to decentralized autonomous organizations (DAOs), may have ramifications that go beyond this specific instance.
The SEC’s lawsuit against the Wahis is resolved with the settlement, providing insight into how insider trading laws are used within the bitcoin sector. The result emphasizes how crucial it is to preserve honest and open market processes in order to safeguard investors and sustain the integrity of the financial system.