Opinion: Insider Trading of Losses Does Not Violate U.S. Securities Laws

BlockBeats News, February 18, Bitwise Alpha's Head of Strategy Jeff Park shared in a post that insider trading is a legal concept in the securities field, primarily defined by the U.S. SEC through case law, based on the anti-fraud provisions of the Securities Exchange Act. It does not apply to commodities or non-securities assets.

To prove insider trading, the three elements of "duty," "breach," and "damages" must be met. If you traded on illegal information but ultimately lost money, the fact is that you did not "damage" anyone. This is also why the U.S. Commodity Futures Trading Commission (CFTC) rarely brings "insider trading" lawsuits.

Therefore, the enforcement direction taken by the CFTC is mainly "market manipulation" or "fraud," which are different concepts in law. Returning to crypto assets. If it is believed that crypto assets like memecoin are not securities, then the term "insider trading" is legally inaccurate. A more accurate legal framework is market manipulation or fraud charges.

The memecoin market is full of unethical behavior, but whether these behaviors are legal depends on the specific circumstances and legal provisions. "Illegal behavior is not necessarily unethical, and unethical behavior is not necessarily illegal. And stupidity is legal, as the results of stupidity are usually not illegal."