On July 21, 2022, the United States Securities and Exchange Commission (the “SEC”) alleged that nine digital assets constituted securities in its first insider trading claim involving cryptocurrencies, SEC v. Ishan Wahi, Nikhil Wahi, and Sameer Ramani (the “Complaint”). In the Complaint, the SEC charges a former Coinbase manager and two others with perpetrating a scheme to trade at least 25 digital assets ahead of Coinbase announcing that those assets would be listed on its trading platform. Each of Coinbase’s announcements prompted a spike in the digital assets’ value, resulting in profits totaling more than $1.1 million for the defendants. The SEC established its jurisdiction by declaring that nine of the involved digital assets are securities: AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM (the “Nine Complaint Tokens” or “Complaint Tokens”). This is the first time the SEC characterized digital assets as securities in a legal action that did not include the issuers of those digital assets as parties to the legal action.
