The Securities and Exchange Commission is seeking to leverage recent court rulings on insider trading to strengthen its case against Coinbase.
In a notice filed Monday with New York District Judge Katherine Polk Failla, the SEC said it wanted to notify the court of the default judgment issued on March 1. court It ruled that trading certain cryptocurrency assets in secondary markets, including cryptocurrency exchanges, are securities.
The case involved Sameer Ramani, who was friends with former Coinbase product manager Ishan Wahi and his brother Nikhil Wahi. Ishan and Nikhil Wahi agreement Last May, he was sued by the SEC for allegedly engaging in insider trading. SEC filed court filings last week “Ramani appears to have fled the country to avoid criminal prosecution for the conduct alleged in this case,” it said, justifying the default judgment in part.
“Plaintiff Securities and Exchange Commission (“SEC”) respectfully informs the court of its recent ruling on the motion for default judgment in SEC v. Wahi, as it relates to the court’s consideration of the defendant’s motion for judgment and the SEC’s judgment on the pleadings. Yes. Opposite…” the SEC said in Monday’s notice.
The SEC accused Ishan Wahi of helping coordinate the exchange’s public listing announcements, including tradable cryptocurrencies, and notifying both his brother and Ramani of the timing of those announcements.
On March 1, U.S. District Judge Tana Lin ruled that Ramani traded using material, non-public information that he knew to be a violation of the duties of Coinbase administrator Ishan Wahi, specifically saying that the actions involved “buying and selling on Coinbase.” “It was done in this regard,” he said. stock.”
The cryptocurrencies involved in the alleged insider trading were securities, Lin said. Because it meets the criteria of the Howey Test. This refers to a test based on a 1946 U.S. Supreme Court case that the SEC often cites when determining whether an asset is a security.
SEC lawsuit against Coinbase
The SEC may seek to leverage Judge Lin’s ruling in its ongoing case filed against Coinbase in June on charges of operating as an unregistered exchange, broker and clearinghouse.
The two parties, Coinbase and the SEC, squared off at oral arguments in January. asked Ask the SEC questions directly about securities, staking and collectibles components.
Coinbase argued that the case should be dismissed, experts said. mixed opinions About whether that can happen or not.
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