Coinbase’s former product manager, Ishan Wahi, along with his brother Nikhil Wahi and their friend Sameer Ramani, have been indicted by the US Department of Justice on July 21, 2022, for alleged insider trading. The two main defendants, Ishan Wahi and Nikhil Wahi, have pleaded guilty to criminal charges and reached a civil settlement with the US Securities and Exchange Commission (SEC).
However, their friend Sameer Ramani has remained unresponsive and failed to appear in court even after being served with a subpoena. According to CoinDesk’s report, the court issued a default judgment on March 1, stating that Sameer Ramani appears to have fled the United States to avoid criminal liability in this case. More importantly, the court ruled in this case that trading certain cryptocurrency assets on the secondary market constitutes securities transactions.
While most market participants may not be concerned about the progress of this case, the outcome of this ruling could provide more grounds for enforcement actions by US regulatory agencies such as the SEC against the cryptocurrency industry. In particular, SEC Chairman Gary Gensler has consistently argued that most cryptocurrencies meet the definition of securities, thereby requiring cryptocurrency exchanges operating in the United States to register with the SEC. The litigation between the SEC and Coinbase is still ongoing, and the outcome of this case could further strengthen the SEC’s enforcement position.
