Former Coinbase product manager Ishan Wahi and his brother, Nikhil Wahi have finally agreed to settle with the United States regulator, the Securities and Exchange Commission (SEC) in a case of landmark insider trading. According to a joint court filing, the SEC has reached an in-principle agreement with Ishan Wahi after the latter made several efforts to dismiss the charges raised by the regulator.
As per the joint court filing, “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.”
The former Coinbase executive tried to avoid the civil charges levied by the SEC but he finally pleaded guilty two months ago.
Notably, the charges against him by the U.S. Department of Justice were majorly criminal wire fraud-related. The guilty plea from Wahi has made some observers wonder if a fundamental question in the civil case suggested that the nine tokens listed by Coinbase are securities.
These nine tokens which the former product manager confirmed to have traded on leveraging inside knowledge are AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX and KROM. For now, both entities have agreed to postpone the upcoming April 6th deadline to sometime in the summer. This is to give the SEC and Wahi ample time to finalize the settlement.
To achieve this, approval from Gary Gensler the chairman of SEC as well as from four other commissioners who make up the commission’s bipartisan panel will be required.
Crypto Exchanges Likely to Face Enforcement Action
Noteworthy, all or some of these same tokens are listed on cryptocurrency exchanges like Binance, Gemini, Crypto.com and others.
Therefore, if the SEC determines that these are unregistered securities, the aforementioned trading platforms are likely to face enforcement actions. The American publicly traded exchange Coinbase has already been served a Wells Notice by the SEC over the sales of some of its digital products.
“Today, we are disappointed to share that the SEC gave us a “Wells notice” regarding an unspecified portion of our listed digital assets, our staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet after a cursory investigation.”
When the SEC talked about Coinbase’s staking products a few months ago, Brian Armstrong the CEO assured the agency that they are ready for a legal battle.
