April 1, 2023

Coinbase slams SEC stance on former ex-manager's insider trading case

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2 minutes.

Coinbase slams SEC stance on former ex-manager's insider trading case

The Coinbase administration submitted to the court a private opinion on the case of the ex-exchange manager, denying the existence of a crime and demanding a review of the decision.

Petition to dismiss the criminal casefiled with the Seattle District Court. Coinbase asks to stop the investigation of Nikhil Wahi and Ishan Wahi, accused by the US Securities and Exchange Commission (SEC) of insider trading in securities.

Coinbase management denied that any of the assets that former Coinbase manager Ishan Wahi had access to were securities. The crypto exchange, in principle, does not quote securities.

Marketplace General Counsel Paul Grewell(Paul Grewal) reminded the court that the company repeatedly tried to register with the SEC in order to be able to offer securities denominated in digital assets to customers. However, all efforts were in vain.

Returning to the materials of the judicial investigationvs. the Wahey brothers, Paul Gruell argued that the SEC would have had the legal right to seek criminal prosecution of exchange employees if it had been able to present comprehensive rules and recommendations to Coinbase beforehand. Moreover, the SEC was not even able to defend its position in court.

"The Department of Justice acknowledged this whenaccused our former employee and his associates of wire fraud, but not securities fraud, as the assets involved are not such,” wrote
Gruel on Twitter.

In a court filing, Coinbase said the SECdeliberately deviates from his primary role in favor of initiating unsubstantiated lawsuits. And also that forms of enforcement by the Commission pose a threat to the US digital market and investors.

The other day, the CEO of Grayscale Investments explained
the refusal of the SEC to approve the launch of an ETF on bitcoin due to the inability of the regulator to control the cryptocurrency market.