Bitwise executives: Loss-making insider trading may not be illegal under U.S. securities law
ChainCatcher news, Bitwise executive Jeff Park pointed out that under the framework of U.S. securities law, insider trading that results in losses does not constitute a violation on a technical level. This is because insider trading, as a form of securities fraud, must simultaneously meet the three elements of liability, breach, and damages.Jeff Park explained that the U.S. Securities and Exchange Commission (SEC) defines insider trading primarily based on the anti-fraud provisions of the Securities Exchange Act. Since the essence of insider trading is fraudulent behavior in securities transactions, if the trade does not result in a profit, it cannot be proven to have caused actual harm to others. This also explains why the civil penalties in insider trading cases are usually calculated based on multiples of "profits gained" or "losses avoided."Additionally, Jeff Park stated that for crypto assets like meme coins, if they are not classified as securities, then insider trading regulations do not apply, and they should be regulated from the perspective of market manipulation or fraud.