This Tuesday, the Securities and Exchange Commission announced that Coinbase’s former product manager, Ishan Wahi, as well as his brother, agreed to settle an insider trading case involving cryptocurrencies. Perhaps the most impactful part of the settlement is the agreement not to deny the SEC’s allegation that at least nine of the 25 involved assets constitute securities.

Wahi Brothers Settle With SEC in First-Ever Crypto Insider Trading Case

On May 30th, the SEC announced that Ishan Wahi, the former product manager at Coinbase, agreed to settle the charges brought forth by the Commission against him in July 2022. Ishan’s brother, Nikhil, also agreed to settle with the watchdog.

The Wahi brothers, as well as their friend Sameer Ramani were sued last year in what is widely considered the first case of insider trading involving cryptocurrencies. Ishan Wahi would use his knowledge of which assets would be listed on Coinbase to acquire said assets beforehand and later sell them at a profit.

While the technologies at issue in this case may be new, the conduct is not. We allege that Ishan and Nikhil Wahi, respectively, tipped and traded securities based on material nonpublic information, and that’s insider trading, pure and simple. The federal securities laws do not exempt crypto asset securities from the prohibition against insider trading, nor does the SEC. I am grateful to the SEC staff for successfully working to resolve this matter.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

The SEC also argued that at least nine of the 25 assets involved in the insider trading case constitute unregistered securities despite Coinbase’s adamant claims that it does not list securities. The Commission highlighted that the Wahi brothers agreed to not deny its allegations as part of the settlement.

Ishan Wahi Sentenced to Two Years in Prison For Insider Trading

Less than a month earlier, the criminal case against the Wahi brothers was also concluded. The court sentenced Ishan to 24 months in prison and ordered him to surrender close to 10,000 Tether, and 10.97 ETH.

Nikhil was sentenced to 10 months in prison and similarly ordered to forfeit more than $890,000. Sameer Ramani reportedly remains at large. Throughout their operation, the three men have allegedly illegitimately accrued approximately $1.5 million.

Additionally, around the same time, the first-ever insider trading case involving non-fungible tokens also saw its conclusion. On May 3rd, Nathaniel Chastain, OpenSea’s former product manager was convinced of fraud, money laundering, and insider trading.

This article originally appeared on The Tokenist

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