The latest news report revealed that the United States Securities and Exchange Commission had withdrawn the lawsuit against two Coinbase staff found guilty of engaging in insider trading activity. The culprits, who are brothers Ishan Wahi and Nikhil Wahi, were set free.
According to the report, the SEC announced the settlement of the Coinbase insider trading case through a press release on May 30. In the announcement, the regulator revealed that it had reached a consensus with the two defendants.
The two men found guilty in the case have agreed to pay disgorgement proposed by the regulator. Furthermore, analysts revealed that the recent case of the two guilty brothers was the first insider trading case recorded in the crypto industry. After their conviction, the presiding judge sentenced them to prison, as reported.
However, the American SEC later announced they had reached common ground with the duo for their crimes. Additionally, the commission reported that the accused have agreed to remit all money gotten from the illicit act and pre-judgment interest.
According to the news, the two accused were brothers, recognized as Ishan Wahi and Nikhil Wahi, and were working for Coinbase exchange, the American-based world-leading cryptocurrency exchange.
Wahi Brothers Found Guilty Of Insider Trading
At the firm, Ishan was a product manager.
Hence, he has first-hand information about the coins that would be listed on the exchange before it is announced to the public.
According to the report, Ishan was sued by the SEC for exposing the information about at least 25 different cryptos the exchange wanted to list to Nikhil, his brother, and Sameer Ramani, his friend.
The trio acted upon the information, and they ended up making a whopping $1.5 million in profits between June 2021 and May last year. Afterward, the three culprits were caught, tried, and convicted of the crime by a US federal court.
As punishment for their crime Ishan Wahi was sentenced to 24 months imprisonment and, of course, lost his job at the crypto exchange. Similarly, his brother, Nikhil, was sentenced to 10 months of prison time.
However, on the other hand, the third accomplice, Sameer Remani, remains unpunished yet, as reported in the announcement recently made by SEC.
Additionally, in the announcement, the SEC revealed that the two sentenced brothers could escape their jail times if only they were willing to forfeit their ill-gotten profits as ordered by the presiding court.
If they obey the order, SEC’s disgorgement and prejudgment interest condition would be automatically fulfilled. Consequently, the SEC can forgo the case and refuse to seek civil punishment, which, if approved by the court, the brothers’ jail time would be canceled.
The SEC Shuns Madamus Claims By Coinbase
Meanwhile, recent reports showed that the Security and Exchange Commission is fiercely going after crypto entities who violate the securities rules. In addition, Coinbase also is actively trying to get crypto regulation clarity from the regulator via court order.
According to reports, the giant exchange recently filed a petition requesting a fed court to make a ruling asking the SEC to issue clear crypto regulations for exchanges. However, the commission constantly refutes the motion while claiming that forming a clear regulatory framework for cryptocurrencies requires years.
In addition, the SEC retorted that the current enforcement approach they employed is enough to rule the fast-growing crypto industry. The commission also pointed out that the crypto has no right to demand such action from them.
Explaining further, the SEC claimed that the Mandamus sought by Coinbase is a unique remedy that requires the seeker to display a credible right to relief. However, Coinbase does not have any right to relief; hence cannot demand a Mandamus motion against it.
The commission also emphasized that neither the APA (Administrative Procedure Act) nor the securities rules mandate it to issue the broad regulatory framework on cryptocurrencies in such a limited time as Coinbase demanded.