Reuters reports that Ishan Wahi, a former product manager for Coinbase Global, pleaded not guilty to two counts of wire fraud conspiracy. The Securities and Exchange Commission (SEC) has charged Wahi with insider trading while he worked at Coinbase. When he tried to board an Indian-bound flight in May, police detained him and charged him the following month.
Wahi told his brother Nikhil and a mutual acquaintance, Sameer Ramani, about cryptos Coinbase planned to sell and trade. Between June 2021 and April 2022, they made at least $1.5M by buying and selling assets before Coinbase. It may have been the first incidence of Bitcoin insider trading. As of late July, Nikhil Wahi had been caught, while Ramani was still at large.
Civil Case Against Coinbase Manager Wahi
Based on the SEC’s determination that nine of the 25 cryptos Wahi and his accomplice traded in — Powerledger (POWR), Kromatika (KROM), DFX Finance, Amp, Rally, Rari Governance Token, DerivaDAO, LCX, and XYO — were securities, the SEC is pursuing a separate civil case against Wahi in addition to the criminal investigation. As a result of the SEC’s judgement, exchanges, funds, and investors with the assets faced doubts.
The Securities and Exchange Commission (SEC) did not file any charges against Wahi for securities fraud. Additionally, Coinbase CEO Paul Grewal wrote in a blog post published after filing charges against Wahi that the SEC relies on these one-off enforcement actions to try to bring all digital assets under its jurisdiction, even if they are not securities.
Caroline Pham, the head of the Commodity Futures Trading Commission (CFTC), chimed in, calling the SEC case “a clear illustration of regulation by enforcement.'”
An unrelated SEC inquiry is looking into insider trading on crypto exchanges.
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