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SEC Slaps Former Coinbase Manager With Insider Trading Charges — Identifies 9 Crypto Tokens as Securities

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The US Securities and Exchange Commission (SEC) has announced insider trading charges against a former Coinbase manager who has been arrested and also faces criminal charges. The regulator identified nine crypto tokens as securities in the complaint. According to U.S. Attorney Damian Williams, this is “the first ever insider trading case involving the cryptocurrency markets.”

SEC Charges Former Coinbase Manager, His Brother And Friend – 9 Crypto Tokens Identified As Securities

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The US Securities and Exchange Commission (SEC) announced on Thursday “insider trading allegations against a former Coinbase product manager and his brother and friend.”

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The SEC elaborated, “During his time at Coinbase, Ishan Wahi helped coordinate the platform’s public listing announcements that stated which crypto assets or tokens would be available for trading.” The regulator added that from at least June 2021 to April 2022:

In defiance of his duties, Ishan repeatedly communicated the timing and content of upcoming listing announcements to his brother Nikhil Wahi and his friend Samir Ramani.

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“Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were securities, and then routinely sold them shortly after the announcement for a profit. The long-term insider trading scheme generated more than $1.1 million in illegal profits,” the SEC noted.

Nine securities of cryptoassets named in US Securities and Exchange Commission complaint are AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX and KROM.

Ishan Wahi, Nikhil Wahi, and Ramani were charged by the Securities Supervisory Service with “violating the anti-fraud provisions of the securities laws.” The regulator is seeking “permanent injunctive relief, pre-judgmental forfeiture and civil penalties.”

criminal charges

In parallel, on Thursday, the U.S. Attorney’s Office for the Southern District of New York also announced criminal charges against all three people.

According to an announcement released by the Department of Justice (DOJ), the three are facing charges “in connection with a scheme to commit insider trading in crypto assets using Coinbase’s confidential information about which crypto assets should be listed on Coinbase exchanges.”

Ishan Wahi and Nikhil Wahi were arrested Thursday morning in Seattle, Washington. However, Sameer Ramani remains at large.

U.S. Attorney Damian Williams commented:

Just last month, I announced the first ever insider trading case involving NFTs, and today I am announcing the first ever insider trading case involving the cryptocurrency markets.

FBI Assistant Director Michael J. Driscoll said: “The defendants made illegal transactions in at least 25 different crypto assets and made dishonest profits totaling about $1.5 million.”

All three are charged with “two counts of wire fraud conspiracy and two counts of wire fraud, each carrying a maximum sentence of 20 years,” the Justice Department said.

The Justice Department announced the first-ever insider trading case involving non-fungible tokens (NFTs) in June. Defendant allegedly used NFT platform Opensea’s confidential information about what products would be featured on its home page “to secretly acquire dozens of NFTs shortly before they were introduced,” the Justice Department specified.

What do you think of this cryptocurrency insider trading case involving a former Coinbase manager? Let us know in the comments below.

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