Ex-Coinbase Executive and His Brother Reach Settlement With SEC on Crypto Insider-Trading Charges
Former Coinbase product manager Ishan Wahi and his brother, Nikhil Wahi, just reached an agreement with the U.S. Securities and Exchange Commission (SEC) to settle charges arising from an insider trading scheme involving crypto assets.
In July of 2022, the SEC filed a complaint accusing Ishan Wahi of giving his brother and a friend, Sameer Raman, confidential information about which crypto assets were to be supported by Coinbase.
The price of crypto assets often goes up once their listing on the platform is announced. Nikhil Wahi and Raman then bought tokens based on the insider tip enabling the trio to amass $1.5 million in illicit profits. The securities regulator says that nine of the 25 crypto assets bought are securities.
According to the SEC, the Wahi brothers agreed not to deny the agency’s allegations as part of the settlement.
“Ishan Wahi and his brother, Nikhil Wahi, agreed to settle charges that they engaged in insider trading through a scheme to trade ahead of multiple announcements regarding at least nine crypto asset securities that would be made available for trading on the Coinbase platform.
Ishan and Nikhil Wahi each agreed to be permanently enjoined from violating Section 10(b) of the Securities Exchange Act and Rule 10b-5 and to pay disgorgement of ill-gotten gains, plus prejudgment interest.”
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, says that while the technology involved in the case is new, the scheme is essentially classic insider trading.
“We allege that Ishan and Nikhil Wahi, respectively, tipped and traded securities based on material nonpublic information, and that’s insider trading, pure and simple. The federal securities laws do not exempt crypto asset securities from the prohibition against insider trading, nor does the SEC.”
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