Judge Tana Lin partially granted the United States Securities and Exchange Commission’s (SEC) request for a default judgment against Sameer Ramani, one of the defendants in the case involving former Coinbase product manager Ishan Wahi and others. Additionally, Judge Lin ruled that certain cryptocurrency secondary sales were considered securities.
The SEC had requested a default judgment against Ramani, who appears 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 occurred with tokens that were expected to be listed on Coinbase and were made after Ishan Wahi informed his associates of the exchange’s plans.
Judge Lin, who presides over the U.S. District Court of Western Washington in Seattle, granted the SEC’s request for a permanent injunction against Ramani, as well as civil penalties and disgorgement. However, the judge did not rule in favor of the SEC’s request for prejudgment interest on the disgorged funds. It is alleged that Nikhil Wahi and Ramani made $1.5 million from their illegal trades.
The SEC claimed that at least nine of the 25 tokens that Nikhil Wahi and Ramani invested in, based on Ishan Wahi’s advice, were securities. These tokens include Powerledger (POWR), Kromatika (KROM), DFX Finance (DFX), Amp (AMP), Rally (RLY), Rari Governance Token (RGT), DerivaDAO (DDX), LCX, and XYO. Judge Lin accepted the SEC’s argument without challenge.
Paul Grewal, Coinbase’s chief legal officer, agreed with the court’s conclusion, stating that the SEC faced no resistance in this case. Ishan Wahi initially pleaded not guilty to the insider trading charges but later changed his plea to guilty in a deal with the SEC in February 2023. He was sentenced to two years in prison, while his brother Nikhil received a 10-month sentence.
Ramani’s defense counsel, David Kornblau at Denton’s, did not respond to inquiries from Cointelegraph. Furthermore, the email address provided for Ramani in the court document was not functioning when Cointelegraph attempted to contact him.