Crypto Market Sell-Off Far From Over As SEC Probes Exchanges For Insider Trading

The crypto markets are getting clobbered and the Securities and Exchange Commission is rushing to investigate whether crypto exchanges put in place measures to curb insider trading.

SEC Examines Lack Of Insider Trading Safeguards On Exchanges

Fox Business journalist Eleanor Terrett revealed in a June 14 tweet that the SEC has sent letters to a number of crypto exchanges, requesting details regarding the absence of insider trading protections. Terrett said the information was disclosed to her by industry sources familiar with the matter. 

The regulator claims its focus is on protecting investors by enforcing more laws following the eruption of insider trading cases within the cryptocurrency industry. Not too long ago, the SEC urged crypto platforms to register with the agency and report all relevant financial information.

SEC Chairman Gary Gensler has also previously leveled sharp criticism at crypto exchanges for supposedly betting against their own customers.

Moreover, the watchdog is investigating major crypto firms, including Binance and Terraform Labs for possible breaches of securities laws. The SEC has also looked into whether Binance.US, the U.S. affiliate of the global exchange, was completely independent and if its employees were involved in an insider trading scheme.

Buckle Up: Crypto Market Sell-Off Far From Over

It’s getting ugly on the crypto streets.

Bitcoin’s month-long sideways price action ended on June 13 after a sharp market correction pressed the bellwether cryptocurrency under the $23,000 level. The move came amid rising global inflation rates and rate hikes by central banks.

In another sign of the fast-approaching crypto winter, the global market cap of all cryptocurrencies slipped below $1 trillion. The violent wipeout notably affected both long and short traders as liquidations surpassed $1.2 billion in less than 24 hours. 

As the latest crypto market carnage takes the price of bitcoin to levels not seen since 2020, prominent bag holders are also enduring massive losses. Michael Saylor’s MicroStrategy, for instance, is down more than $1 billion on its bitcoin bet.

Sentiment among pundits and industry watchers remains extremely bearish, with some warning of a dire drop to $8,000 in the near term. Therefore, investors should move forward with caution.