Two brothers involved in the first crypto insider trading case have agreed to settle civil charges with the U.S. Securities and Exchange Commission, the regulator said on Tuesday. 

The SEC last year hit former Coinbase product manager Ishan Wahi, 32, and his brother Nikhil, 27, with civil charges for crypto asset insider trading action. Today the regulatory agency announced that the brothers had agreed to admit that the assets they sold were securities and to not deny the SEC’s additional allegations.

Ishan Wahi, his brother, and their friend Sameer Ramani made over $1.5 million from investing in new digital assets just before they were listed on Coinbase—America’s biggest crypto exchange.

Prosecutors said that while working at the San Francisco-based exchange, Wahi was able to use his knowledge to buy upcoming assets before they were listed and then quickly sell them, making huge profits for himself and his associates. 

Gurbir S. Grewal, SEC Director of the Division of Enforcement, added: “We allege that Ishan and Nikhil Wahi, respectively, tipped and traded securities based on material nonpublic information, and that’s insider trading, pure and simple.”

Wahi was sentenced earlier this month to two years in prison for insider trading in a separate criminal investigation; his brother received a 10-month sentence. The two were also ordered to hand over 10.97 Ethereum (worth $20,926 today), $9,440 in the stablecoin Tether, and $892,500 in cash. 

Sameer Ramani is still at large. 

“As is often the case when a criminal court has already ordered defendants to forfeit their ill-gotten gains,” the SEC said, Wahi would not be hit with more civil penalties on top of what he’d already paid. 

"The SEC determined not to seek civil penalties in light of the Wahi brothers’ prison sentences,” the regulator added. 

When Coinbase lists new coins and tokens, they quickly shoot up in value due to high demand—a phenomenon now known as “the Coinbase effect.” 

Federal prosecutors have described the matter as the first insider trading case involving cryptocurrencies.

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