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News

Former Coinbase Executive Accused Of Insider Trading Ready To Settle With SEC

April 5, 2023 - Around 3 mins mins to read

Key Points:

  • The SEC looks to be nearing a resolution in an insider trading lawsuit involving former Coinbase product manager Ishan Wahi and his brother, Nikhil Wahi.
  • Wahi’s case is just one of several that the SEC is investigating as the government continues to clamp down on a variety of industries.
  • This comes in the midst of Coinbase’s continuing dispute with the SEC.
A month after pleading guilty in a case involving cryptocurrency insider trading on the Coinbase exchange, a former employee seems to be nearing a settlement agreement with the US Securities and Exchange Commission (SEC).
Former Coinbase Executive Accused Of Insider Trading Ready To Settle With SEC

The SEC looks to be nearing a resolution in a major insider trading case involving former Coinbase product manager Ishan Wahi and his brother, Nikhil Wahi. The information was contained in a joint court petition filed on Monday.

Significantly, Wahi’s case is the first in which a crypto industry official admits to utilizing sensitive information for personal gain. According to the SEC petition, Wahi and his associate unlawfully benefited by $1.1 million by exploiting sensitive knowledge about crypto listing announcements while he was at Coinbase.

“At this time, the SEC has an agreement in principle with Ishan Wahi to resolve all of the SEC’s claims in this matter. The SEC and Nikhil Wahi are also in good faith discussions that may resolve the SEC’s claims.”

Ishan Wahi had previously sought dismissal of the SEC’s civil accusations but pled guilty in February to similar criminal wire fraud allegations filed by the Justice Department.

Considering the gravity of the matter, the SEC said that the settlement would need examination and approval from higher authorities such as the SEC Commissioners.

Former Coinbase Executive Accused Of Insider Trading Ready To Settle With SEC

Both the government and the defendants seek to push out the April 6 deadline until the summer to allow for the finalization of the settlement. They would require the permission of SEC head Gary Gensler, who was chosen politically, for the delay to take effect. They would also need approval from the commission’s nonpartisan panel of four other commissioners.

This comes in the midst of Coinbase’s continuing dispute with the SEC. The same US-based regulator sent the exchange a Wells notice last week, which is a letter indicating the possibility of a lawsuit for securities law violations. The SEC had already sent Coinbase a Wells notice and accused Tron founder Justin Sun of fraud and other securities law crimes. Gensler will shortly defend the SEC’s conduct in front of the US Congress.

Considering that the allegations are the first big crypto-related insider trading case and that it includes the nine tokens named by Coinbase that the SEC deems unregistered securities, the settlement might have far-reaching repercussions for the digital asset market as a whole.

Moreover, significant trading platforms, including Binance, Gemini, and Crypto.com, list some or all of the tokens. This implies that if the court determines that the tokens are unregistered securities, precedent from the Wahi case might be used in enforcement proceedings against these other entities.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

Coincu News

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insider trading

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Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.