Former Coinbase Global product supervisor Ishan Wahi pleaded not guilty to 2 counts of wire fraud conspiracy and two counts of wire fraud in a Manhattan federal court on Wednesday, Reuters reported. Wahi has been accused by United States regulation enforcement and the Securities and Exchange Commission (SEC) of insider trading whereas at Coinbase. He was arrested in May as he tried to board a flight to India and was charged in July.
Specifically, Wahi has been accused of passing confidential info to his brother Nikhil and pal Sameer Ramani concerning cryptocurrencies Coinbase meant to listing for trading. This allegedly allowed them to make a revenue of at least $1.5 million between June 2021 and April 2022 by buying and trading the belongings in advance of their Coinbase listings. It was probably the primary insider trading case involving cryptocurrency. Nikhil Wahi has additionally been arrested, however Ramani remained at giant as of late July.
The SEC is pursuing a parallel civil case towards Ishan Wahi primarily based on its dedication that 9 of the 25 cryptocurrencies Wahi and his confederate traded in — Powerledger (POWR), Kromatika (KROM), DFX Finance (DFX), Amp (AMP), Rally (RLY), Rari Governance Token (RGT), DerivaDAO (DDX), LCX, and XYO — have been securities. The SEC’s transfer proved to be controversial, because it led to questions concerning the standing of exchanges, funds, and buyers who maintain the belongings.
Related: Coinbase SEC investigation might have ‘serious and chilling’ results: Lawyer
The U.S. Department of Justice did not embrace securities fraud amongst its fees in the case, and Coinbase forcefully denied that it offers with securities in a weblog put up printed after fees have been filed towards Wahi, with chief authorized officer Paul Grewal writing:
“Instead of crafting tailored rules in an inclusive and transparent way, the SEC is relying on these types of one-off enforcement actions to try to bring all digital assets into its jurisdiction, even those assets that are not securities.”
Caroline Pham, commissioner at the Commodity Futures Trading Commission, additionally joined in fray, calling the SEC case “a striking example of ‘regulation by enforcement.’”
The SEC is reportedly additionally trying at insider trading in crypto exchanges in an investigation unrelated to this case.