> U.S. Attorney Damian Williams said: “Today’s charges are a further reminder that Web3 is not a law-free zone. Just last month, I announced the first ever insider trading case involving NFTs, and today I announce the first ever insider trading case involving cryptocurrency markets. Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them.”
> FBI Assistant Director Michael J. Driscoll said: “Although the allegations in this case relate to transactions made in a crypto exchange - rather than a more traditional financial market – they still constitute insider trading. As alleged, the defendants made illegal trades in at least 25 different crypto assets and realized ill-gotten gains totaling approximately $1.5 million. Today’s action should demonstrate the FBI’s commitment to protecting the integrity of all financial markets – both ‘old’ and ‘new.’”
Why do you say insider trading is legal for non-securities?
> Why do you say insider trading is legal for non-securities?
What, exactly, prohibits you from doing that? Certainly not the Securities Act of 1933 or any SEC rule.
Overall maybe this is a complicated way of officially calling them securities and cleaning this mess on a higher level. At least that's what the FBI implies. However, it is not up to the FBI to decide what is a security, but rather up to the courts of law. This will be interesting.
> Certainly not the Securities Act of 1933 or any SEC rule
U.S. insider trading restrictions are creatures of common law. The ‘33 Act makes no mention of it. The same antifraud/antitheft theories enable prosecution of a Coinbase insider using their position to trade with advantage.
> U.S. Attorney Damian Williams said: “Today’s charges are a further reminder that Web3 is not a law-free zone. Just last month, I announced the first ever insider trading case involving NFTs, and today I announce the first ever insider trading case involving cryptocurrency markets. Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them.”
> FBI Assistant Director Michael J. Driscoll said: “Although the allegations in this case relate to transactions made in a crypto exchange - rather than a more traditional financial market – they still constitute insider trading. As alleged, the defendants made illegal trades in at least 25 different crypto assets and realized ill-gotten gains totaling approximately $1.5 million. Today’s action should demonstrate the FBI’s commitment to protecting the integrity of all financial markets – both ‘old’ and ‘new.’”
Why do you say insider trading is legal for non-securities?