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Cryptocurrency Trade Association Urges Rejection of SEC Insider Trading Case

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It is reported that an American trade association representing cryptocurrency companies called for the rejection of the insider trading case filed by the Unite…

Cryptocurrency Trade Association Urges Rejection of SEC Insider Trading Case

It is reported that an American trade association representing cryptocurrency companies called for the rejection of the insider trading case filed by the United States Securities and Exchange Commission (SEC) on the grounds that the regulator unfairly marked cryptocurrency assets as securities. This case involves a former product manager of Coinbase, a cryptocurrency exchange, and two employees accused of insider trading.  

The Cryptocurrency Trade Organization called for the rejection of the insider trading case filed by the US SEC

Interpretation of the news:


The American trade association representing cryptocurrency companies has called on the United States Securities and Exchange Commission (SEC) to reject an insider trading case filed against three individuals. The case involves a former product manager of Coinbase, a cryptocurrency exchange, and two employees accused of insider trading. The trade association argues that the regulator unfairly marked cryptocurrency assets as securities, leading to an unfair targeting of those working in the industry.

Insider trading is the act of buying or selling securities based on non-public information that is likely to affect the price of the security. In this case, the former product manager of Coinbase is accused of tipping off two employees about the exchange’s plans to add support for Bitcoin Cash, a cryptocurrency that was previously not available on the platform. The two employees then allegedly used this information to trade in Bitcoin Cash ahead of its public release, resulting in significant profits.

However, the trade association representing cryptocurrency companies has questioned the SEC’s classification of cryptocurrencies as securities. According to the association, cryptocurrencies do not meet the traditional definition of securities, which are financial instruments that represent ownership in a company or a promise of repayment with interest. Instead, cryptocurrencies are digital assets that can be used as mediums of exchange, similar to traditional currency.

The trade association’s argument is supported by a recent statement from SEC chairman Jay Clayton, in which he stated that not all cryptocurrencies are securities. Clayton has also outlined a set of criteria that can help determine whether a particular cryptocurrency is a security or not. This includes whether the purchasers of the asset have a reasonable expectation of profits from the efforts of others, or whether the asset is being sold as part of a common enterprise.

If the SEC were to accept the trade association’s argument, it could have significant implications for the regulation of cryptocurrencies. Currently, many cryptocurrency companies are operating under the assumption that their assets are considered securities and are subject to SEC oversight. A change in this classification could affect the way in which cryptocurrencies are traded and valued, and could also impact the ability of regulators to pursue cases of insider trading or other types of securities fraud.

In conclusion, the trade association representing cryptocurrency companies has called on the SEC to reject an insider trading case involving a former Coinbase product manager and two employees. The association argues that the SEC unfairly classified cryptocurrencies as securities, and that this has led to an unfair targeting of those working in the industry. Whether the SEC will accept this argument and what the implications of such a decision would be remains to be seen.

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