Brother of Former Coinbase Employee Ordered to Pay Restitution in Landmark Crypto Insider Trading Case

The prosecutors accused Ishan, a former Coinbase employee, of informing his brother Nikhil and their associate Sameer Ramani about the upcoming listing of new cryptocurrencies before they were publicly announced.

As a result, Nikhil made a profit of $892,500 when the cryptocurrency prices rose after the listing.

As part of his punishment, Nikhil was ordered to give up the profits to the U.S. government. However, Coinbase defended the brothers and Ramani in a separate lawsuit filed by the Securities and Exchange Commission, which claimed that they violated U.S. securities laws by committing fraud.

In a March 13 amicus brief, Coinbase denounced their actions but argued that the SEC did not have the jurisdiction to sue them, as the tokens in question were not considered securities under the Howey test, a legal test used in the U.S. to determine if an asset is a security.