The Securities and Exchange Commission (SEC) has detailed insider trading charges against three individuals.
The SEC indicated the charges are against a former Coinbase product manager, his brother, and his friend for allegedly
perpetrating a scheme to trade ahead of multiple announcements regarding certain crypto assets made available for trading on the Coinbase platform.
The SEC complaint alleges while employed at Coinbase, Ishan Wahi helped to coordinate the platform’s public listing announcements that included what crypto assets or tokens would be made available for trading.
Additionally, the complaint alleges Coinbase treated such information as confidential and warned its employees not to trade based on, or tip others with, that information.
The SEC also alleges from at least June 2021 to April 2022, in breach of his duties, Ishan repeatedly tipped the timing and content of upcoming listing announcements to his brother, Nikhil Wahi, and his friend, Sameer Ramani. Ahead of those announcements, which usually increased the assets’ prices, Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets and then typically sold them shortly after the announcements for a profit.
The SEC’s complaint was filed in federal district court in Seattle, Wash., which charges Ishan Wahi, Nikhil Wahi, and Ramani with violating the antifraud provisions of the securities laws and seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties.
“In nearly a year, the defendants collectively earned over $1.1 million in illegal profits by engaging in an alleged insider trading scheme that repeatedly used material, nonpublic information to trade ahead of Coinbase listing announcements,” said Carolyn M. Welshhans, acting chief of the Enforcement Division’s Crypto Assets and Cyber Unit.”We will vindicate our mission by identifying and combating insider trading in securities wherever we see it.”