The United States Securities and Exchange Commission (SEC) has decidedly launched an investigation in order to discover how most of the crypto exchanges have been functioning to prevent any form of insider trading. It was reported by Fox Business on Wednesday that a person with any form of direct knowledge of the activities of the body had mentioned that the SEC had issued a letter to a large crypto exchange where they requested information about how the platform protected its users from insider trading. The same source also believes that the same letter had been sent to quite a few exchanges.
SEC Has Launched A Probe Into The Crypto Industry
Interestingly, it hasn’t been made clear as to which exchange received the request from the government body, but the news outlets mentioned that Binance, Coinbase, Crypto.com, and FTX had all declined to comment on this development. The authority had also declined to confirm that they started this probe. The nature of this inquiry also seems to be quite unclear.
The authority could definitely be seeking out multiple leads that would lead to the litigation against an exchange’s potential legal violations through the office of the enforcement division, or this could simply be a routine compliance check that would take place through the Office of Compliance Inspection and Examinations.
There have been multiple reports and allegations of insider trading at the largest NFT marketplace, OpenSea, which did catch the attention of the SEC in the last few weeks. Cointelegraph went on to report on the 3rd of June that the commission could be looking towards ultimately labeling the NFTs as securities after charges of insider trading were levied against Nathanial Chastain.
The current conditions in the crypto market along with the ongoing scandals have catalyzed the decision of the SEC to start this inquiry. Just the previous month, the Terra ecosystem went on to collapse after the stablecoin de-pegged itself.