SEC Launches An Investigation Into Crypto Insider Trading
The United States Securities and Exchange Commission (SEC) is reportedly launching an investigation exploring how cryptocurrency exchanges prevent insider trading.
SEC investigates insider trading on crypto exchanges
According to Fox Business, the SEC has sent a letter asking certain major cryptocurrency exchanges to respond about measures to protect users from insider trading. This request was sent after the collapse of the Terra ecosystem.
It remains unclear which exchange received the request, but the news outlet reports that Coinbase, Binance, FTX, and Crypto.com have all declined to comment. The agency also declined to confirm the investigation. In April, the CEO of Coinbase spoke out about the accusations of employees of insider trading on the exchange.
The nature of the current investigation is also unclear. The SEC may be looking for clues to litigate an exchange for potential regulatory violations, or it could simply be a routine compliance audit.
Regarding insider trading allegations, it is impossible not to mention the case involving the former OpenSea Product Manager, which puts him at risk of facing 20 years in prison for each count. As mentioned in an article by Coincu News, US prosecutors unexpectedly charged Nathaniel Chastain with finding that he used OpenSea inside information for NFT insider trading. This person was caught taking advantage of inside information to pre-purchase NFTs about to be listed on the largest NFT exchange market in this market and then resell them at sky-high prices for personal gain.
This year’s proposed Digital Commodities Exchange Act, if passed, will officially give the SEC the right to “kill” the SEC, especially the crypto exchanges that have already fallen under the agency’s sights a long time ago.
Current market conditions and recent scandals have been the catalysts for investigations from the agency . Amidst the FUD, BTC crashed sharply close to the $20,000 mark, leading to a large-scale decline of altcoins, “ghosts” covering the market. Total crypto market capitalization has fallen below $1 trillion for the first time since February 2021, and this figure is currently $969 billion, according to CoinGecko.
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