SEC Endorses Ethereum After Settlement.

On May 30, the United States Securities and Exchange Commission (SEC) announced that Ishan Wahi, the former blockchain product manager, and his brother, Nikhil Wahi, had agreed to settle charges brought forth by the regulator accusing them of engaging in an insider trading scheme.

SEC Settlement With Former blockchain Product Manager

The two defendants admitted that their actions violated Section 10(b) of the Securities Exchange Act.

As a consequence, Ishan was sentenced to two years in prison, while Nikhil will serve ten months behind bars.

The SEC also said that Ishan forfeited 10.97 ETH and 9,440 USDT, while Nikhil submitted to the state 892,500 USDT.

This is part of the settlement and forfeiture of securities the SEC said were ill-gotten.

The SEC filed the suit at the District Court for the Western District of Washington, alleging that the former blockchain product manager used confidential information to benefit from trading crypto assets, most of which were securities.

The Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, said that their actions amounted to insider trading.

While the technologies at issue, in this case, may be new, the conduct is not. We allege that Ishan and Nikhil Wahi, respectively, tipped and traded securities based on material nonpublic information, and that’s insider trading, pure and simple.

How Will The SEC Handle Ethereum?

Questions are being asked about how the regulator will allow the forfeiture of those digital assets, including Ethereum, in a way that the regulator considers legal and lawful.

Though there is an argument that all assets received from the two brothers will be forfeited to the Department of Justice (DoJ), some maintain that the SEC must first confirm receipt.

Recently, Gary Gensler, the chairman of the SEC, failed to clarify whether Ethereum, like Bitcoin, is a commodity that should be treated as a property and its capital gains tax.

Gensler repeatedly said the agency was learning more about Ethereum while in front of the House Financial Services Committee.

However, a clear endorsement from the SEC, the principal regulator, could lead to regulatory clarity for Ethereum, possibly driving prices and on-chain activity.

The SEC classifies Bitcoin, Ethereum, and Litecoin as commodities, not securities, but a statement from the SEC declaring ETH a commodity is much awaited by the community and could help prices. In late 2020, the SEC sued payment company Ripple and its executives, claiming XRP is an unregistered security. A ruling on this case is expected in the coming few months.

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more