A former product manager for Coinbase Global Inc and his brother have agreed to settle U.S. Securities and Exchange Commission (SEC) charges related to insider trading of crypto asset securities.
The SEC said Ishan Wahi and his brother, Nikhil Wahi, agreed to settle civil charges that they engaged in a scheme to trade ahead of multiple announcements regarding at least nine crypto asset securities that would be made available on Coinbase's platform, the regulator said in a statement.
"While the technologies at issue in this case may be new, the conduct is not," said SEC's enforcement director Gurbir Grewal.
A lawyer for Ishan Wahi declined to comment on the settlement. He previously pleaded guilty to related criminal charges that he tipped off his brother Nikhil and a friend with confidential information about digital assets that would be listed on Coinbase, one of the world's largest crypto exchanges.
Ishan Wahi was sentenced to two years in prison earlier this month. In January, Nikhil Wahi was sentenced to 10 months in prison. His lawyer did not respond immediately to request for comment.
Both brothers agreed they would not deny the SEC's allegations. Neither received a penalty and the disgorgement order by the SEC was deemed covered by the related criminal proceedings.
The case has drawn significant attention as the SEC has grown increasingly active in policing the crypto industry. The regulator has argued in lawsuits, including the one it filed against the Wahi brothers, that many digital assets are securities that fall under its oversight.
In pleading guilty to the criminal charges, Ishan Wahi said he did not believe any of the relevant tokens were securities.
The Wahi brothers had previously asked a judge to dismiss the SEC's case.
Coinbase is one of a number of crypto firms targeted by the SEC for allegedly violating securities laws. The firm was not a party to the SEC’s allegations against the Wahi brothers but did file a brief supporting their motion to dismiss.
A spokesperson for the firm said it is “disappointed” the court will not have a chance to take up that motion. “The Wahi settlement involves no statement or admission that the crypto assets at issue are securities,” the spokesperson said. (Reporting by Kanishka Singh and Chris Prentice; Additional reporting by Hannah Lang; Editing by Bill Berkrot and Cynthia Osterman)