SEC Makes Compromise with Coinbase Manager Accused of 'Insider Trading': Here are the Terms

Ishan Wahi, a former product manager of Coinbase, a leading cryptocurrency exchange and trading platform, and his brother Nikhil Wahi, are insider trading crypto-asset securities, the U.S. Securities and Exchange Commission (SEC) announced today. announced that he admitted to the charges.

According to the SEC filing, Ishan Wahi had access to confidential information about Coinbase's upcoming listing announcements of various crypto assets to be traded on the platform.

The SEC alleged that Ishan Wahi violated his duties and informed his brother and friend about the timing and content of these announcements, which often resulted in a rise in the prices of the assets.

The SEC claimed that Nikhil Wahi and his friend later bought at least 25 cryptoassets, including at least nine securities, before the announcements and sold them for a profit shortly thereafter.

The SEC said the Wahi brothers agreed to be permanently barred from violating Section 10(b) of the Securities Exchange Act and Rule 10b-5, and to pay precautionary interest along with the return of unjustified gains.

Coinbase Ex-employee Accused of Insider Trading Admits Not to Deny Crime

However, the SEC has decided not to seek civil penalties in light of the prison sentences the Wahi brothers received in a similar criminal case. The Wahi brothers also agreed not to deny the SEC's allegations as part of the settlement.

Gurbir S. Grewal, Director of the SEC's Executive Division, said the Wahi brothers' behavior was "purely and simply insider trading" and that the SEC did not exempt crypto-asset securities from the insider trading ban.

He added that he is grateful to the SEC staff who have successfully worked to resolve this issue.

In the criminal case, Ishan and Nikhil Wahi were found guilty of conspiracy to commit fraud. Ishan Wahi was sentenced to 24 months in prison and sentenced to give back 10.97 Ethereum and 9,440 Tether; Nikhil was sentenced to 10 months in prison and ordered to refund $892,500.

*Not investment advice.