SEC Sends Letter to Crypto Exchange, Launching Insider Trading Investigation

Insider trading is a concern for crypto.

Photo credits: Jason Zweig

From a layman’s perspective, Insider Trading is a term for a type of transaction made by investors using some of the confidential information about the asset, for their own benefit. In the cryptocurrency market, there has been a lot of speculation that insider trading is constantly active in crypto exchanges.

In crypto, the volatile nature of the market takes control of the asset and induces investors or company personnel to engage in insider trading to reap maximum profits before prices fall. The US SEC statutory body, which regulates stocks, also deals with crypto.

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The United States Securities and Exchange Commission’s intervention in crypto to ban insider trading.

The US SEC has reportedly begun its investigation into whether cryptocurrency exchanges involve insider trading, whether they have the necessary security measures in place to limit instances of insider trading.

According to one of the sources, the SEC has gone ahead and sent a letter to a major crypto exchange asking them to explain the insider trading laws and regulations and the steps to be taken to limit insider trading. such cases. The survey is supposed to cover additional trade as well.

The crypto crash in May influenced the letter from the SEC.

Ever since the crypto market crashed in May, there has been a lot of speculation about insider trading in many crypto exchanges. To curb such insider trading situations, the SEC then sent a letter to one of the major crypto exchanges. The letter is believed to have been sent following the collapse last month of Terra’s UST and its sister token LUNA.

No official report yet.

Asked about the report by the SEC, the SEC declined to comment. Asked about Binance and Coinbase, which happen to be two of the biggest cryptocurrency exchanges, they also declined to comment. Crypto exchanges such as FTX and Crypto.com did not respond to numerous requests for comment.

The SEC is concerned about serious violations of laws.

It is not clear from the point of view of the investigation. It’s unclear whether the SEC’s enforcement division is leading the investigation or the Office of Compliance Inspections and Reviews, which often conducts preliminary reviews of areas of regulatory concern. But, if it turns out that the SEC probe is leading the investigation, then it would be justified for the SEC to be really concerned about the violation of regulatory rules and regulations.

Writer’s report.

Yes, it is critical to know whether insider trading played a role during the stock market crash or not. The stock market crash saw billions of dollars disappear from the market where investors saw their savings made for education burnt to ashes. If the exchanges knew the market situation and used it to their advantage, the person responsible for such a violation should certainly be penalized.

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SEC Sends Letter to Crypto Exchange, Launching Insider Trading Investigation


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