Report says SEC is Investigating Insider Trading on Crypto ExchangesThe US Securities and Exchange Commission (SEC) is turning its regulatory focus on insider trading on cryptocurrency exchanges. The SEC is the regulatory body tasked with regulating the cryptocurrency sector in the US.

Over the past year, the SEC has shaped the crypto regulatory framework in the US. The current SEC Chair, Gary Gensler, was appointed to the position early last year, and in his tenure, the regulatory noose on crypto has tightened.

SEC probes insider trading on crypto exchanges

A report by Fox Business has said that the SEC has launched an inquiry into whether cryptocurrency exchanges have adopted the necessary safeguards to prevent insider trading.

The report added that a person with close knowledge of the matter had said that SEC had sent a letter to one of the leading exchanges asking for information about how the platform upholds user safety by preventing insider trading. There is no clear indication that the inquiry also focuses on other exchanges.

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

The SEC letter was sent in May, after the collapse of the Terra network. The collapse of UST and LUNA wiped out around $40 billion worth of investor funds from the cryptocurrency market. The report noted that similar letters could have been issued to other exchanges, but the SEC probe seems to be cutting across the entire market.

SEC inquiry comes amid market turmoil

The SEC inquiry comes at a critical time for the cryptocurrency market. The global cryptocurrency market cap has fallen below $900 billion following market-wise selloffs. The increased volatility has heightened investor losses. The crash is also adding pressure on firms operating in the space, as some are now facing liquidity issues.

On Sunday, Celsius Network announced that it would suspend withdrawals from the network because of extreme market conditions. In the latest news, the firm has already hired restructuring lawyers to help it assess the best financing options.

The recent reports across crypto Twitter have also said that Three Arrows Capital, one of the largest funds in the space, is being liquidated by lenders following the market crash. The co-founder of the investment firm, Zhu Su, tweeted that the company was in talks with the relevant parties and was committed to working out the situation.

Two of the largest exchanges, Coinbase and, are also laying off staff because of the current turmoil. However, other exchanges like Binance and Kraken have announced they will expand their workforce despite the crash.

These events are happening at the backdrop of the Terra Luna crash. The crash wiped out more than $40 billion worth of investor money from the market, and while Terraform Labs created a new chain, regulatory scrutiny into the events leading up to the crash has heightened.

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