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ARTICLE · 16 JUNE 2022

SEC Investigating Lack Of Insider Trading Policies For NFT/Crypto Exchanges

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For quite some time, we have been advising that marketplaces and NFT/crypto issuers consider developing an insider trading policy. The SEC is now investigating this issue.

United StatesTechnology
James Gatto
James Gatto
Gabriel Khoury
Gabriel Khoury
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For quite some time, we have been advising that marketplaces and NFT/crypto issuers consider developing an insider trading policy. The SEC is now investigating this issue. If you do not have a policy this is a good time to do so.

The issue of NFT-based insider trading became more well known when a high-profile executive of an NFT marketplace was alleged to have traded NFTs based on non-public information. As we previously addressed, this individual was recently indicted for that activity. Interestingly, he was not charged for insider trading of securities. Rather, he was charged with one count of wire fraud and one count of money laundering. As this indictment shows, liability for improper trading can arise even if the NFT is not a security.

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