Former Coinbase Global product manager Ishan Wahi pleaded not guilty to two counts of wire fraud conspiracy and two counts of wire fraud in a Manhattan federal court on Wednesday.
Former Coinbase head Ishan Wahi, 32, has been accused of insider trading involving relatives for illicit income. But he pleaded not guilty at a hearing yesterday, according to Reuters.
According to the indictment filed July 21 in New York, the Justice Department convicted Wahi of phone fraud and conspiracy to commit fraud, specifically abusing confidential information about the Coinbase token listing process for personal gain.
On the same day, the SEC is pursuing a parallel civil lawsuit against Ishan Wahi based on their determination that 9 of the 25 cryptocurrencies that Wahi and his co-conspirators traded were securities. The SEC’s move was controversial as it raised questions about the status of exchanges, funds, and investors holding assets.
According to the SEC, there have been at least 14 times when Ishan Wahi shared confidential information, suggesting that his brother Nikhil Wahi and friend Sameer Ramani bought a large number of tokens that were about to be listed on Coinbase before this information was announced to the public. The two currently face charges of using inside information for more than $1.1 million in profits.
The US Department of Justice did not include securities fraud among its allegations in the case, and Coinbase strongly denied that it deals with securities in a blog post published after the allegations filed against Wahi, with chief legal 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.”
The SEC is reportedly also looking into insider trading in crypto exchanges in an unrelated investigation to this case.
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