The Securities and Exchange Commission (SEC) announced on Tuesday that ex-Coinbase manager Ishan Wahi and his brother, Nikhil Wahi, agreed to settle charges for insider trading using knowledge from the exchange

The former has been forced to forfeit 10.97 ETH ($20,848.92) and 9,440 USDT, while the latter was made to forfeit $$892,500.

The End of Crypto’s First Insider Trading Case

According to the SEC’s press release, the brothers’ fines represent penalties for disgorgement of ill-gotten gains from their trading scheme, plus prejudgment interest.

The brothers – in addition to one of their friends, Sameer Ramani – were charged by the Department of Justice in July 2021 in the first-ever insider trading case involving cryptocurrencies. Specifically, Ishan Wahi was accused of tipping his brother and friend with information about coins that would soon be listed at Coinbase, who would buy them in advance of public listing announcements

“Coinbase treated such information as confidential and warned its employees not to trade on the basis of, or tip others with, that information,” explained the SEC.

Analysis has shown that public listings at popular exchanges have a largely appreciative impact on a coin’s price. Indeed, the co-conspirators were alleged by prosecutors to have profited $1.5 million across 55 different token trades between June 2021 and April 2022

Though Ishan Wahi initially fought allegations against him, he ultimately pled guilty to two counts of conspiracy to commit wire fraud in February. His brother already did the same in September, lamenting that his crime was “something that I will have to live with forever.”

Punishment From the SEC

Both brothers agreed not to deny the SEC’s allegations as part of the settlement deal.

Though Nikhil paid the larger fine, he will only spend 10 months behind bars, as opposed to his brother’s 2-year prison sentence

The SEC said that at least nine of the assets purchased by the group “were securities,” defying claims by Coinbase that the exchange doesn’t list any securities. Ishan Wahi’s lawyers challenged these claims in February, and Coinbase continues to spat with the agency regarding legal classifications for crypto as a whole

“The federal securities laws do not exempt crypto asset securities from the prohibition against insider trading, nor does the SEC,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, in the agency’s statement. “I am grateful to the SEC staff for successfully working to resolve this matter.”