- Former Coinbase product manager Ishan Wahi has moved to dismiss the SEC’s insider trading charges.
- His lawyers have argued that the tokens allegedly traded by him and his accomplices are not securities.
Ishan Wahi, the former Product Manager at Coinbase, accused of insider trading in July 2022, has moved to drop the charges filed against him by the Securities and Exchange Commission. Brother and alleged accomplice Nikhil Wahi joined him.
Motion to dismiss filed by the Wahi brothers
According to a motion filed in the U.S District Court for the Western District of Washington, lawyers representing the Wahi brothers want the SEC’s charges dismissed on the grounds that the tokens that the due allegedly traded were not securities.
10 attorneys from five different law firms signed the 80-page motion. It stated that the charges brought by the securities watchdog were “wrong.” Allegedly, the definition of an “investment contract” did not fit the tokens traded by the Wahi brothers.
Lawyers for the former Coinbase employee argued that the tokens were equivalent to buying a baseball card. To that end, they argued that the brothers had no obligations to buyers in the secondary market.
While highlighting that the utility of the tokens in question, their lawyers argued:
“None of the tokens were like stock. The very object of each token was to facilitate activity on the underlying platforms and, in so doing, enable each network to develop and grow.”
Nikhil Wahi serving a 10-month prison sentence
As per the SEC’s press release from July 2022, Ishan Wahi was directly involved in the public listing announcement process for crypto tokens that would be made available for trading on Coinbase. Between June 2021 and May 2022, Wahi disclosed confidential information to his brother and one Sameer Ramani regarding the timeline of at least 14 different token listings.
Wahi and Ramani used anonymous exchange accounts and Ethereum [ETH] wallets to buy said tokens shortly before their listing, resulting in total gains of approximately $1.5 million. Nikhil Wahi pleaded guilty to the SEC’s charges and was sentenced to 10 months in prison in January 2023. His brother pleaded not guilty in August 2022.
