Ishan and his brother are in custody, arrested on Thursday and are facing fraud and conspiracy to commit fraud charges, while Ramini is yet to be arrested.
Broadly, the SEC says Ishan violated securities laws, with this the first insider trading case in the crypto sector.
The SEC says nine of the 25 tokens for which Ishan provided confidential information were securities.
The US Securities and Exchange Commission (SEC) has highlighted nine tokens it says are securities, the details of which come from a landmark case against a former Coinbase manager.
The SEC’s case is against Ishan Wahi, the former product manager at Coinbase and two others – Nikhil Wahi (Ishan’s brother) and Sameer Ramini, a friend. The former Coinbase manager is alleged to have leaked confidential information about token listings announcement, tipping the other two in a scheme that spanned nearly a year and involved $1.1 million in profits.
“Ahead of those announcements, which usually resulted in an increase in the assets’ prices, Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were securities, and then typically sold them shortly after the announcements for a profit,” the SEC said in a press release.
The SEC has previously stated that most tokens in the crypto sector are securities, and indeed has an active case against Ripple Labs over the XRP coin.
In this latest installment of its battle to bring deemed securities under the SEC laws, it does identify nine “security” tokens.
What are these tokens? The SEC highlights them here.
LCX (LCX), Amp (AMP), Rally (RLY), Rari Governance (RGT), Power Ledger (POWR), XYO Network (XYO), DFX Finance (DFX), DerivaDAO (DDX) and Kromatika (KROM).
Commenting on these tokens, Gurbir S. Grewal, SEC’s Director of Enforcement, noted that the main concern is not “with labels, but rather the economic realities of an offering.”
“In this case, those realities affirm that a number of the crypto assets at issue were securities, and, as alleged, the defendants engaged in typical insider trading ahead of their listing on Coinbase,” he added.