The Wahi brothers were charged in 2022 after investigators found Ishan Wahi had information about new digital assets that Coinbase was going to launch with his brother and their friend, Sameer Ramani

Securities regulators have settled with an ex-Coinbase manager accused of insider trading.

The Securities and Exchange Commission declared in a Tuesday PR that Ishan Wahi, a one-time product manager at the cryptocurrency firm, and his brother, Nikhil, agreed to settle civil charges in what prosecutors have said is the first case of insider trading involving cryptocurrencies.

While the technologies at issue in this case may be new, the conduct is not, Gurbir Grewal, the Securities and Exchange Commission’s enforcement director, said in the release. We allege that Ishan and Nikhil Wahi, respectively, tipped and traded securities based on material nonpublic information, and that is insider trading, pure and simple. The federal securities laws do not exclude crypto asset securities from the prohibition against insider trading, nor does the Securities and Exchange Commission.

The Wahi brothers were charged in 2022 after investigators found Ishan Wahi had information about new digital assets that Coinbase was going to launch with his brother and their friend, Sameer Ramani.

Both brothers have already pleaded guilty to criminal misdeeds, with Ishan Wahi sentenced to 2 years in prison and Nikhil Wahi sentenced to 10 months. Ramani is supposed to be still at large.

Before Ishan Wahi settled the suit, some crypto sector experts were expecting it could help decide the future of their sector as it concerns regulatory subject.

A motion to dismiss the lawsuit contended the Securities and Exchange Commission had no standing since the assets of Coinbase are not securities. After all, Wahi’s lawyers stated, their client was charged with ploy to commit wire fraud, not securities fraud.

The expectation in the sector was that federal judges who evaluate suits such as these would rule that crypto is different from the stocks and bonds regulated by Wall Street.

The case comes in busy times for crypto enforcement at the Securities and Exchange Commission. The agency brought a total of 30 cryptocurrency-related enforcement actions in 2022, a 50 per cent rise from 2021.