The SEC takes a long-feared position in Coinbase insider trading suit

The US Justice Department announced Thursday that a former product manager at Coinbase has been arrested and charged with conspiracy to commit securities fraud and conspiracy to commit computer fraud. There is a separate filing by the SEC on the case that indicates the beginning of a battle between the SEC and the firms.

The press release stated that Ishan and his brother had been arrested and that Sameer had not been found. Ishan Wahi has been charged with two counts of wire fraud conspiracy and two counts of wire fraud, along with two other people.

While the DOJ charges do not include any counts of securities fraud, a number of the assets traded by the group are designated as being cryptocurrencies, a classification that is surely going to have far-reaching implications for the industry.

The SEC framed the assets as securities.

The SEC took particular aim at the firms and token listed, saying that they traded in securities subject to the federal securities laws because they were offered and sold to investors who made an investment of money

Due to relaxed regulatory guidelines surrounding commodities, many in the industry have argued that token should be classified as a securities. In response to the SEC's suit, Coinbase filed a petition to develop new frameworks.

The saga began on the social networking site, where a person named Cobie discovered a wallet that had been used to buy up a number of Cryptocurrencies before the announcement of a listing of those assets on its exchange.

Story for the ages pic.twitter.com/oMlr8FM70d

— Cobie (@cobie) July 21, 2022

According to an investigation by the Justice Department, Wahi and his associates had traded in advance of at least 14 asset listings at Coinbase, reaping gains of around 1.5 million dollars. According to the press release, the group had used accounts registered to other people to purchase and transfer cryptocurrencies. Ishan Wahi was stopped by law enforcement as he tried to leave the country after he was contacted by Coinbase about scheduling a meeting about asset listings.

The OpenSea executive was arrested in June on charges of insider trading.

The arrest heard ’round the crypto world

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