Alberts Discusses SEC's Crypto Insider Trading Case

Wahi's more challenging circumstances could give the agency the upper hand — and a way to win favorable precedent, said Pryor Cashman LLP partner Jeffrey Alberts.

"You [could] end up having precedent set in cases where the SEC has a massive advantage, both because they're litigating against a party that has very limited access to information about the tokens ... and you're litigating against a party that the court would be more likely to view as a wrongdoer because they've allegedly engaged in other activity, such as violating corporate policy," he said.

That may not have been the SEC's main motivation, Alberts cautioned. According to Coinbase, the company itself conducted an investigation into potential insider trading and referred the case to the U.S. Department of Justice. The SEC chose to bring civil claims as well.

Those origins suggest that precedent-setting wasn't the SEC's primary goal, but practically speaking, the case could have that effect, Alberts said.

"That doesn't change the fact that the long-term implication in terms of precedent could be much more favorable to the SEC than if the case was between the SEC and the issuer of the tokens," he said.

Jeff also noted that this case was of particular interest across the crypto sector:

In the meantime, platforms and issuers will be closely watching the Wahi case, according to Alberts of Pryor Cashman.

"Platforms on which tokens are traded are going to be very concerned about this, and issuers are going to be very concerned about this," Alberts said. "The sooner we get clarity on this, the better for everyone."