Thursday, July 21st, 2022 | Cryptostotle #13 | By: Brad Lathrop
A former Coinbase employee and two other acquaintances were charged with wire fraud earlier this month in relation to illegal insider trading. Both the Department of Justice (DOJ) and the Securities & Exchange Commission (SEC) have brought charges.
According to an article written by international news organization Quartz,:
“The SEC charged former Coinbase manager Ishan Wahi, his brother Nikhil Wahi, and his friend Sameer Ramani with violating the anti-fraud provisions of federal securities laws, while the DOJ brought criminal wire fraud and conspiracy charges against the trio.”
Another interesting piece of this story is that Coinbase’s Chief Legal Officer, Paul Grewal, wrote and published an article on Coinbase’s website that essentially supported the DOJ’s investigation but lambasted the SEC’s investigation. In the article, Grewal stated that he 100% respectfully disagrees with the SEC’s investigation.
Grewal’s reasoning? Coinbase “does not list securities on its platform.”
The Chief Legal Officer wrote:
“We cooperated with the SEC’s investigation into the wrongdoing charged by the DOJ today. But instead of having a dialogue with us about the seven assets on our platform, the SEC jumped directly to litigation. The SEC’s charges put a spotlight on an important problem: the US doesn’t have a clear or workable regulatory framework for digital asset securities. And instead of crafting tailored rules in an inclusive and transparent way, the SEC is relying on these types of one-off enforcement actions to try to bring all digital assets into its jurisdiction, even those assets that are not securities.”
You can read the official Coinbase article here.
This will be a very interesting story to keep an eye on. The U.S. government has made a push this year to regulate crypto more heavily, and whether they deem digital assets as securities or not will certainly affect some aspects of the crypto industry.
