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News Report

SEC Reviewing Whether Crypto Exchanges Have Adequate Measures to Prevent Insider Trading

2 mins
Updated by Geraint Price

In Brief

  • The SEC is worried that crypto exchanges could enable insider trading the way it is currently designed.
  • The SEC wants crypto exchanges to have checks in place to prevent insider trading.
  • Other U.S. regulatory bodies are also examining the market.
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The U.S. Securities and Exchange Commission (SEC) has launched an inquiry into whether crypto exchanges have adequate measures to protect against insider trading. One exchange has reportedly already been contacted.

The SEC has launched an investigation into a potential lack of insider trading safeguards at crypto exchanges. The investigation is not targeted at any one crypto exchange, but all such entities.

Media outlets are reporting that one major crypto exchange has been contacted by the SEC, asking executives how the platform protects users from any insider trading that could take place. The inquiry was reportedly launched after the Terra UST stablecoin crash, which sent shockwaves through the financial world and drew the attention of many regulators.

SEC concerned over lack of checks

The SEC has been particularly worried about a lack of checks to guarantee investor protection. This has been repeated time and again, both by its chair, Gary Gensler, and in SEC official statements.

Other regulatory activities and general developments that the SEC is now involved in including an investigation into Terraform Labs, reviewing whether Binance broke securities laws with its ICO, and a public education campaign.

The regulatory body has ramped up its efforts in the crypto space in recent years, bring order to the market. However, there will still be challenges, given that the market is decentralized by nature.

Authorities monitoring the market closely

This investigation is just one of many that U.S. regulators are carrying out in the crypto market. The Commodity Futures Trading Commission (CFTC), the U.S. Treasury, and other bodies are also conducting their own reviews of the market.

These attempts at regulation come at a time when the market is drawing attention for its large crash. Bitcoin currently sits just above $20,000, and investors are gearing up for what could be an extended crypto winter.

The SEC and others will take this time to impose their authority over the market, which may hurt even more in the short term, but is likely much better for the long-term prospects of the market.

Ardent bitcoin and crypto enthusiasts do not see this as a problem, but there is no doubt that traders hoping to make short-term profits will have to operate with caution.


In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.