Trading certain crypto assets on secondary markets are securities transactions, US court rules

• March 4, 2024, 2:42 am EST

Published 1 minute before in

A United States court ruled that trading in certain crypto assets on secondary markets, such as cryptocurrency exchanges, are securities transactions, a position opposite to that taken by Coinbase and the cryptocurrency industry in general.

The failure comes in a insider trading case against former Coinbase product manager Ishan Wahibrother Nikhil Wahi and friend Sameer Ramani.

“Each issuer continued to make that representation regarding the profitability of its tokens even when the tokens were traded on secondary markets,” the ruling says. indicating: "Therefore, under Howey, all crypto assets that Ramani purchased and traded were investment contracts."

The court declaration is a default judgment, which is issued when a defendant fails to appear in court or respond to a subpoena. The document notes that "Ramani appears to have fled the country to avoid criminal prosecution for the actions alleged in this case."

Ramani has been prohibited from committing future violations and must pay a civil penalty of twice the amount of his estimated profits. The SEC also attempted to impose prejudgment interest, but the court denied this request.

The U.S. Securities and Exchange Commission reached a settlement with both Wahis last May. The particular agency referred to the case as the “first cryptocurrency insider trading tipping scheme.”

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© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

About the Author

Adam is the editor-in-chief for Europe, the Middle East and Africa. He is based in Central Europe and was managing editor and podcast host at the former research arm of cryptocurrency exchange OKX, OKX Insights. Prior to that, he co-founded, which he elevated to one of the leading crypto media brands in its heyday as editor-in-chief. Previously, he served as editor-in-chief of Before joining the blockchain and crypto industry, he worked for,, and He tweets via @XBT002 and can be emailed at [email protected].
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