The Securities and Exchange Commission (SEC) is close to reaching a settlement in a landmark insider trading case involving former Coinbase product manager Ishan Wahi and his brother, Nikhil Wahi.
According to a joint court filing, the SEC agreed in principle with Ishan Wahi to resolve all claims in the case while discussions with Nikhil Wahi are ongoing. The SEC and defendants are seeking a postponement of the April 6 deadline to the summer to allow time for the settlement to be finalized.
Ishan Wahi had previously sought dismissal of the SEC’s civil charges, but in February, he pleaded guilty to related criminal wire fraud charges brought by the Justice Department. The charges relate to nine tokens listed by Coinbase that the SEC considers unregistered securities. It represents the first major crypto-related insider trading case.
Ramifications for the digital asset industry
A settlement may have wider ramifications for the digital asset industry. Major trading platforms such as Binance, Gemini, and Crypto.com also list some or all of the tokens, implying that the Wahi case decision could be used in enforcement actions against them. It is unclear, however, whether a settlement would accomplish this.
The potential settlement also comes amid an ongoing investigation into Coinbase by the SEC, which recently sent the company a Wells notice, notifying it of an investigation into its Earn and Wallet products and overall exchange activity.
The civil charges were put on hold until Wahi could be sentenced in the criminal case. Still, Monday’s filing showed that the SEC and the Wahis filed to settle the charges, citing the brothers’ cooperation with the regulator, but need more time for settlement approval.
The letter requests that the judge presiding over the case move the original April 6 deadline to June 15, with a reply deadline of July 15.