SEC settles Coinbase insider trading scheme charges with Wahi brothers SEC settles Coinbase insider trading scheme charges with Wahi brothers
Ishan and Nikhil Wahi have settled with U.S. securities regulators.
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Updated: May. 30, 2023 at 9:25 pm UTC
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The U.S. Securities and Exchange Commission (SEC) said on May 30 that it has settled with two individuals involved in a Coinbase insider trading scheme.
SEC settlement
The SEC said that Ishan Wahi, formerly a product manager at Coinbase, and his brother Nikhil Wahi settled the relevant charges.
The regulator alleged that Ishan Wahi informed Nikhil Wahi and his friend Sameer Rami regarding upcoming Coinbase listings before they were known to the public. Nikhil Wahi and Rami purchased the pending cryptocurrencies before the listing date and then sold the assets for profit after the listing.
Incidentally, the SEC did not suggest that all cryptocurrencies involved in the case are securities. It said that Nikhil Wahi and Ramani purchased at least 25 cryptocurrencies and that at least nine assets are securities.
Gurbir Grewal, Director of the SEC’s Division of Enforcement, commented on the case, noting that although the insider trading scheme involved new technologies, cryptocurrencies are not exempted from insider trading laws.
Wahi brothers facing prison, forfeiture
The SEC said that subject to court approval, Ishan and Nikhil Wahi will be permanently enjoined from violating Section 10(b) of the Securities Exchange Act of 1934, specifically under Rule 10b-5. That rule covers any action or omission that results in fraud or deceit related to securities trading.
The regulator added that the brothers have pled guilty to conspiracy to commit wire fraud. Ishan Wahi has been sentenced to 24 months in prison and will forfeit ETH and USDT currently worth over $30,000, while Nikhil Wahi has been sentenced to 10 months in prison and will forfeit $892,000.
Though the SEC announced those outcomes today, past reports indicate that Ishan and Nikhil Wahi received their prison sentences in May and January 2023.
While the SEC handled the securities aspects of the case, the U.S. Department of Justice (DOJ) was responsible for the criminal aspects of the case.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Zaeem Shoaib Zuberi
Zaeem, an editor fascinated by business, finance, DeFi, and cryptocurrencies, holds a business and finance degree. His 14-year career in financial journalism spans sectors like banking, finance, insurance, and tech.
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Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
