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SEC writes crypto exchanges over insider trading

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Eleanor Terrett, a Fox business journalist, tweeted that the U.S. Securities and Exchange Commission (SEC) has written to several crypto exchanges about “insider trading protections.”

Authorities Step Up Investigation into Insider Trading in the Crypto Industry

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Terrett’s tweet shows that US authorities are increasingly interested in preventing attackers from using privileged information to their advantage.

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The letter is not surprising, because during Bloomberg interview in May, commission chairman Gary Gensler said that some crypto exchanges provide services that may be contrary to the interests of their clients.

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According to him,

“Crypto has a lot of these problems – platforms are trading ahead of their customers. In fact, they often trade against their clients because they trade against their clients.”

Are Nate Chastain’s allegations the first of many?

Earlier this month, US authorities opened a landmark case against former OpenSea chief Nate Chastain.

The US Department of Justice accused him of using classified insider information for his own enrichment.

If found guilty, Chastain faces up to 20 years in prison.

At the time, the U.S. Attorney in charge of the case, Damian Williams, said the government was committed to the case.

“Eradication of insider trading – whether in the stock market or on the blockchain.”

According to Jeffrey Roberts, a former U.S. attorney, the charges against Chastain could be

“The launch of a major review aimed at using inside information regarding transactions with cryptocurrency tokens and other digital assets.”

Meanwhile, several reports have surfaced against some of the leading cryptocurrency exchanges and politicians over allegations of insider trading, which they vehemently deny.

The SEC letter comes as the crypto industry is trading at a low level last seen in January 2021. The industry has a market capitalization of less than $1 trillion, with flagship digital assets such as Bitcoin and Ethereum trading below $23k and $1,200 each.





Credit : cryptoslate.com

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