February 6, 2023

The agency has sent a letter to at least one major crypto exchange asking about its safeguards, according to Fox Business.

Source: coindesk.com
Source: coindesk.com

The U.S. Securities and Exchange Commission (SEC) has begun an investigation into whether crypto exchanges have sufficient protections against insider trading, according to Fox Business, which cited a source with direct knowledge of the inquiry.

The source said the SEC had sent a letter to a major crypto exchange asking about the kinds of protections it has in place against insider trading. The inquiry is meant to cover additional exchanges as well, according to the source.

The letter was sent after the collapse last month of Terra’s UST stablecoin and the associated LUNA token, according to the report.

The SEC did not immediately respond to a request for comment on the Fox News report.

The SEC is also reportedly looking into whether Terraform Labs, the company behind UST and LUNA, violated U.S. laws in its marketing of the cryptocurrencies.