Judge Tana Lin partially satisfied the United States Securities and Exchange Commission request for a default judgment against Sameer Ramani, one of the defendants in the case of former Coinbase product manager Ishan Wahi and co-defendants. At the same time, Lin found that secondary sales of some cryptocurrencies were securities.
The SEC requested a default judgment against Ramani, who appeared to have fled the United States and has not responded to court summonses. Ishan Wahi and his brother Nikhil were charged in July 2022 with insider trading and wire fraud. The trades in question were with tokens that were slated for listing on Coinbase made after Ishan Wahi informed his associates of the cryptocurrency exchange’s plans.
Lin, a judge in the U. S. District Court of Western Washington at Seattle, agreed to the SEC’s demands for a permanent injunction against Ramani, as well as civil penalties and disgorgement, but did not agree that the defendant should pay prejudgment interest on the disgorged funds. Nikhil Wahi and Ramani allegedly made $1.5 million on their illegal trades.
The SEC claimed that at least nine of the 25 tokens Nikhil Wahi and Ramani invested in on the advice of Ishan Wahi were securities. The nine tokens were Powerledger (POWR), Kromatika (KROM), DFX Finance (DFX), Amp (AMP), Rally (RLY), Rari Governance Token (RGT), DerivaDAO (DDX), LCX and XYO. Lin wrote in her order:
FAC may refer to “First Amended Complaint,” but it wasn’t specified in the order. Nevertheless, Lin accepted the SEC’s argument whole and repeated its outlines in her order without challenging them. Patrick Daugherty, head of the Foley & Lardner digital assets practice, told Cointelegraph:
Coinbase chief legal officer Paul Grewal agreed with that conclusion, saying on X that “the SEC was pushing against a completely open door” in the case. Grewal wrote:
Ishan Wahi initially pleaded not guilty to insider trading charges, but changed his plea to guilty in a deal with the SEC in February 2023. He was sentenced to two years in prison. His brother Nikhil was sentenced to 10 months.
Ramani’s defense counsel named in the order, David Kornblau at Denton’s, did not respond to a Cointelegraph enquiry by publication time. The email address listed in the same document for Ramani was not accepting mail when Cointelegraph tried to connect with Ramani.