A former employee of cryptocurrency exchange Coinbase (COIN) and two others have been charged with insider trading by the U.S. Securities and Exchange Commission (SEC).
This marks the first time that a cryptocurrency company has been charged with insider trading by the Wall Street regulator.
Ishan Wahi, a former product manager at Coinbase, his brother Nikhil Wahi, and a friend, Sameer Ramani, have been charged with “wire fraud conspiracy” and “wire fraud” in connection with a scheme to commit insider trading in cryptocurrency assets, according to a public statement released by the SEC.
The charges allege that the individuals profited from confidential information about which cryptocurrency assets were scheduled to be listed on Coinbase’s exchange.
In a blog post, Coinbase refuted the SEC charges, saying that cryptocurrencies are not classified as “securities” and, as such, do not fall within the SEC’s jurisdiction.
The charges, however, claim that Ishan Wahi attempted to flee the United States for India ahead of a scheduled interview by Coinbase’s security department, but was prevented by law enforcement from leaving the country.
Ishan Wahi and Nikhil Wahi have been arrested in Seattle, while Sameer Ramani remains at large, said the SEC.
Coinbase’s stock has fallen 71% this year amid a widespread downturn in cryptocurrency prices and currently trades at $73.98 U.S. per share.
