A former Coinbase manager and his brother have agreed to settle insider trading charges brought by US regulators.
Ishan Wahi and his brother, Nikhil Wahi, agreed to settle those charges on Tuesday, according to the US Securities and Exchange Commission.
The SEC filed a complaint against the brothers in July, alleging that Ishan Wahi helped them and their friend Sameer Ramani by telling them which cryptos would be available to trade on Coinbase and thus increasing the value of cryptos. But there was profit.
“While the technologies at issue in this case may be new, the conduct is not. We allege that Ishaan and Nikhil Wahi respectively tipped and traded securities based on non-public information, and that this is insider trading, net And simple,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement, in a statement.
The agency said the Wahi brothers have also agreed not to deny the SEC’s allegations.
Both Ishaan and Nikhil Wahi have pleaded guilty to conspiracy to commit wire fraud in a separate criminal case, where Ishaan Wahi was sentenced to two years and Nikhil Wahi to 10 months.
Coinbase is under the SEC’s scrutiny after the exchange was handed a Wells notice, which means it is ready to make a formal charge recommendation to its five-member commission.
pending securities
A core part of the case was the nine cryptocurrencies the SEC considered securities, but this case was not answered.
In its original complaint, the SEC said those nine cryptocurrencies were securities, but the lawyers representing the brothers made a different argument. Admission that they were not because the nine in question had been sold on the secondary market.
Crypto consultant Rodrigo Serra of Paradigm called the settlement a “meaningful development for the industry.”
“Today’s SEC settlement (i) does not admit of any legal findings regarding the security status of the Tokens; (ii) Wahi is not required to pay any additional penalty (apart from the separate criminal case),” Sira tweeted on Tuesday.