US SEC tracks exchanges over possible insider trading activities as markets tumble

• SEC requests crypto transaction details from exchanges.
• Intense sell-offs pile more pressure on the crypto market.

America’s top financial regulator, the SEC, has sent notices to leading crypto exchanges following the recent market crash. The regulator seeks to know the anti-insider trading measures these exchanges are implementing.

The move follows the crypto market crash of Monday, June 13. The crash wiped off over $1B worth of cryptos from the overall crypto market cap. The value of the top two digital assets (BTC and ETH) dipped by over 15 percent and 17 percent, respectively.

The SEC seeks more details from exchanges about insider trading measures

According to Fox Business journalist, Eleanor Terrett, the SEC seeks to know whether crypto exchanges have an anti-insider trading measure. The SEC’s actions might be its response to the several cases of insider trading popping up in the crypto market recently.

Hence, the regulator would want to ensure that US crypto investors are protected from such losses. In times past, the SEC had requested that crypto exchanges register and have an operating license. It also requested that these exchanges detailed financial reports of their activities quarterly.

Current SEC chief, Gary Gensler, had previously accused exchanges of trading against individual traders. For reasons such as insider trading activities, the lawmakers amended the securities exchange act to include the definition of an “exchange.”

Avatrade chief market analyst, Naeem Aslam, claimed that the amended securities act means that lawmakers can instruct exchanges to restrict fiat withdrawals when there is a serious market panic. Aslam believes that such moves would enable crypto traders to trust lawmakers again.

In addition, the top regulator launched a detailed investigation into Terraform Labs’ operations before its crash. The SEC has claimed that the firm was an unregistered entity. The SEC has also launched similar claims against Binance’s BNB ICO. The SEC claims that the crypto exchange’s BNB tokens are unregistered securities.

Also, the outcome of the OpenSea insider trading allegation would determine whether the SEC would classify NFTs as securities. Thus, expanding the SEC’s regulatory authority over that segment of the crypto industry.

Intense selloffs pile more pressure on the crypto market

Yesterday’s market crash caused a nearly $1 trillion decline in the wider crypto market cap. BTC and ETH prices dropped sharply on Tuesday. According to the latest Coinmarketcap data, BTC is down 7.12 percent in the last 24 hours and trades at $22,147.66.

Similarly, ETH is down 2.41 percent over the past 24 hours and trades at $1,180.34. There was $532M worth of BTC liquidations in the last 24 hours. At the same time, there were $317M and $20M worth of ETH and SOL liquidations. This SEC’s move will force crypto exchanges to take more proactive measures against insider trading. Hence, investors would be exposed to less risk.

As it is happening in the crypto market, investors are also liquidating most of their stocks and bonds. These events across financial markets have led many analysts to predict that the world is about to enter a new recession.

Relating: Falling below these prices would trigger a disastrous bleed for Bitcoin and Ethereum: BitMEX CEO