Federal prosecutors in New York have charged three individuals with wire fraud in connection to an insider trading cryptocurrency scheme - one of these individuals being a former Coinbase employee. These charges are very significant to the crypto industry as they are the first official insider trading charges related to digital currency.
Former Coinbase employee Ishan Wahi gave his brother and their friend confidential information regarding future asset listings. They purchased these assets and then resold them for profit.
Christopher Warren, Managing Partner at Warren Law Group states, "Despite there being no clear guidance from SEC's Chair, Gary Gensler (or any other regulatory body for that matter) on the regulation of blockchain assets or any publication to address the rules pertaining to issuers of tokens, the SEC just announced that Coinbase (a public company that the SEC oversees), illegally listed noncompliance securities. The tokens/securities at issue in the complaint are AMP, RLY, RGT, DDX, YXO, LCX, POWR, DFX, and KROM. Ironically, even though the SEC went through the painstaking process of detailing how these tokens were securities using the "Howey Test" on each asset, the CFTC commissioner, Caroline D. Pham, indicated that tokens might not be securities but commodities. This behavior by the SEC follows its apparent strategy of regulating through enforcement before the SEC or CFTC has a chance to give notice of what regulations innovators in the blockchain space should follow."
If you are under investigation by the SEC, DOJ, CFTC, FINRA, Attorney General's Office, or any other regulatory agencies, you must seek experienced legal counsel to guide you through an investigation.
Originally published 28 July 2022
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