The first case of prosecuted insider trading in crypto took an interesting twist this week as the former Coinbase (Nasdaq:COIN) manager accused of abusing his position at the company to trade in advance of news has pleaded guilty to the charges of insider trading.
According to a report by Reuters, Isha Wahi, told US District Judge Loretta Preska that insider trading applies to securities and commodities, and crypto does not qualify. His brother, Nikhil Wahi, also entered the same not guilty plea.
The Wahi’s, along with acquaintance Sameer Ramani (who has yet to be apprehended), are facing both a civil action by the Securities and Exchange Commission (SEC) as well as criminal charges from the US Department of Justice. The enforcement action commenced by the SEC claims that some of the cryptocurrencies are securities, an assertion Coinbase disputes, while the criminal charges does not use the term securities.
Because of this detail, lawyer David Miller has asked the charges be dismissed. Additionally, Coinbase was in the habit of announcing newly listed digital assets prior to them appearing on the marketplace, and thus, the information was not really confidential.
This case, once again, highlights the need for clear-cut rules as to how to regulate digital assets that are not securities (or claim not to be.) Reuters shared that the next hearing date is scheduled for March.