The Securities and exchange Commission (SEC) and the cryptocurrency industry have been getting in bed together much more as of late than ever before. With all of the pending Bitcoin ETF approval possibility, the SEC has become a main headline staple within the bitcoin ecosystem. While we previously reported on the an alleged SEC insider trading scandal unfolding with the most recent “delayed not denied” SEC postponement ruling on the VanEck SolidX Bitcoin ETF, there has been a similar case to report on.
The SEC charged Aaron R. Smith, the son of a California bank board member, with insider trading. The Commission accused smith of using material nonpublic information to trade stocks of a northern California bank in the process of being acquired by another local bank in a nonpublic manner.
Smith received the information from his father, which he then used to trade stock from his own brokerage account that he had open. After the acquisition became public, the purchase stock increased and he earned $41,000 in profits. Although he has not admitted or denied the charges, Smith settled with the SEC. The settlement agreement requires that he cease and desist from future violations of federal antifraud provisions and that he pay a fee of $43,783.35, and an additional penalty of $40,578.28.
Insider trading occurs frequently in the financial industry because many tend to share information. The cryptocurrency industry has been affected as well – especially when it comes to the listing of new coins and speculators receiving the earnings. Further, for those who think that insider trading cannot occur in the crypto industry due to anonymity are wrong. Coins can be purchased using cryptocurrencies and even though the transactions are anonymous, regulators have methods that they can use to discover the identity of the bad actor.
We will be sure to keep you up to date on all the SEC and cryptocurrency news in the future as the crackdown continues to remove all illicit activity in and out of the bitcoin/token industry!