The U.S. Securities and Exchange Commission (SEC) alleged in a civil suit filed last week that nine of the 25 crypto assets traded in the first-ever cryptocurrency insider trading case were securities and that leaking confidential information, therefore, amounted to securities fraud.
See related article: Former Coinbase manager arrested on insider trading charges
Fast facts
- The U.S. Department of Justice (DOJ) pressed charges of insider trading against Ishan Wahi, a former Coinbase product manager, his brother Nikhil Wahi and friend Sameer Ramani, on Thursday.
- According to the insider trading case, which the SEC helped investigate, Ishan tipped Nikhil and Ramani about which assets Coinbase was going to list and the timing of those announcements.
- Based on Ishan’s tips, Nikhil and Ramani purchased the assets just before the listing announcements and earned profits of around US$1.1 million by selling when the asset price increased after the announcements.
- Between June 2021 and April 2022, the SEC said, Ishan provided tips on at least 14 occasions, and Nikhil and Ramani traded 25 different crypto assets, nine of which the SEC claims are securities.
- The SEC is seeking permanent injunctive relief, the return of ill-gotten profits, and civil penalties.
- The SEC did not bring charges against Coinbase for listing the cryptocurrencies that it deems securities, and the exchange called the charges an “unfortunate distraction” since it does not list securities.
See related article: Former OpenSea employee arrested amid insider trading allegations