Coinbase app on the Appstore. Photo: Diego M. Radzinschi/ALM Can the SEC Win the First-of-Its-Kind Crypto Insider Trading Case?
The biggest obstacle the Commission faces in proving insider trading is one of its own creation; its failure to provide the market with a clear picture of how the securities laws apply to digital assets will make it harder to prove that the tokens at issue qualify as "securities" under federal law.
September 21, 2022 at 10:45 AM
12 minute read
Two months ago, the SEC brought its first ever alleged insider trading case arising from the purchase and sale of digital assets. The Commission charged Ishan Wahi, a former manager at Coinbase Global, with violations of §10(b) of the Securities Exchange Act of 1934, alleging Wahi violated his duty to Coinbase by disseminating material non-public information (MNPI) to his brother and a friend about the timing of token listings on the Coinbase platform. That same day, the U.S. Attorney for the Southern District of New York unsealed an indictment related to the same conduct. As many observers have noted, the Commission is attempting to break new ground in the Wahi case. But the SEC's path to proving this case will be anything but smooth.
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