Yesterday a former Coinbase employee and two others were charged in two lawsuits relating to insider trading. The ex-employee, Ishan Wahi, allegedly tipped a relative and friend with advanced knowledge that tokens were to be listed on the cryptocurrency exchange. They made between $1.1 million and $1.5 million on the information. One of the lawsuits is a criminal one, but the other is a civil one brought by the SEC that includes claims that nine tokens involved in the alleged insider trading are securities.
There’s much debate about whether the CFTC or SEC should have jurisdiction over spot cryptocurrency transactions. In a statement, CFTC Commissioner Caroline Pham says the SEC lawsuit is a ‘striking example of regulation by enforcement.’ Fellow Commissioner Kristin Johnson took a more conciliatory approach, saying that regulators and law enforcement stand united and “prepared to enforce against such predatory and abusive behavior.”
However, the newly appointed Commissioner raised concerns that differences between regulators could be exploited. “We must continue to work collaboratively to adopt a whole-of-government approach to prevent bad actors from taking advantage of important policy and regulatory debates,” she said.
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