Ishan Wahi, a product manager at the cryptocurrency exchange, and his brother Nikhil Wahi were arrested in Seattle on Thursday. They and a third defendant, their friend Sameer Ramani, who remains at large, also face civil charges from the US financial watchdog, the Securities and Exchange Commission (SEC).
Prosecutors alleged that Ishan Wahi, 32, shared confidential information about forthcoming announcements of new cryptocurrency assets that Coinbase was planning or considering listing on its exchange. His brother and Ramani allegedly traded at least 14 times before such announcements between June 2021 and April 2022, prosecutors said.
Historically, this has enabled crypto assets to swerve regulation by the SEC and the US treasury department, which has both enhanced the appeal of crypto assets while also making them more susceptible to fraud due to a lack of investor protections.
Fischer said the SEC was unlikely to be able to set a precedent on cryptocurrencies and securities with its civil charge.
Andrew St Laurent, a lawyer for Ishan Wahi, declined to comment. A lawyer for Nikhil Wahi did not immediately respond to requests for comment. Reuters could not immediately identify a lawyer for Ramani.
