Key Takeaways:
- The SEC has sent letters to major crypto exchanges requesting information about their protection policies.
- The regulator may be looking for violations of serious regulations by the exchanges.
The recent happenings in the crypto market have alerted the authorities. The Securities and Exchange Commission has been monitoring the exchanges since the downfall of Luna and has launched an investigation to ensure that the exchanges have enough protection against insider trading. The controversy related to Do Kwon being involved in money laundering might be the cause of the preventive measures taken by the SEC.
According to Fox Business, a person who has direct knowledge of the inquiry has informed that the SEC has issued a letter to be sent to a major crypto exchange requesting information about the platform’s policies to protect its users from the consequences of insider trading.
Though it is unclear, the source believes based on a conversation with industry insiders that other letters may have been issued by the regulator. Major crypto exchanges including Binance, and Coinbase have declined to comment on the issue. Even press officials from FTX, Crypto.com, and SEC have refused to share any insight.
Therefore, it is still hard to anticipate if the investigation is conducted by the enforcement division or the Office of Compliance of the authority which usually holds the initial examinations into areas of regulatory interest. If the news gets confirmed, it would suggest that the SEC is trying to find out “potentially serious regulatory violations.”
