SEC launched investigation into measures to counter insider trading on crypto exchanges

The regulator intends to find out what actions the platforms are taking to protect their customers

15.06.2022 - 10:00

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2 min

What’s new? The US Securities and Exchange Commission (SEC) has launched a large-scale investigation to find out whether cryptocurrency exchanges have proper security measures in place to prevent insider trading on their platforms. The regulator has sent a letter to a major exchange requesting information on how it counters insider trading. There is a possibility that other platforms have also received such a request, FOX Business reports, citing sources.

FOX Business

What else do the sources say? It is not known whether the enforcement division or the Office of Compliance Inspection and Examinations, is leading the investigation. If the request came from the enforcement division, it could indicate the SEC’s concern about potentially serious violations of regulatory requirements. The Office of Compliance Inspection and Examinations, on the other hand, usually conducts preliminary examinations.

The news agency reports that the exchanges Coinbase, Binance, FTX, and Crypto.com declined to comment. The SEC also declined to confirm the investigation.

The WSJ journalists previously reported cases of insider trading on Binance, FTX, and Coinbase. Some wallets actively bought a number of assets worth hundreds of thousands of dollars days before the official announcements of their listing on the exchanges.

On June 9, the SEC launched an investigation into the collapse of the TerraUSD (UST) stablecoin. The regulator would check whether the marketing strategy of the stablecoin violated federal investor protection laws. The Commission also launched an investigation into Binance and its native token BNB to find out whether the coin qualified as a security in its 2017 initial public offering (ICO).

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