Bitwise executives: Loss-making insider trading may not be illegal under US securities laws

Odaily News Jeff Park, an executive of Bitwise, pointed out in a post that under the framework of US securities law, insider trading that leads to losses may not technically constitute a violation of the law. This is because insider trading, as a securities fraud, needs to meet the three constituent elements of liability, breach of contract and damages at the same time. Jeff Park explained that the US Securities and Exchange Commission (SEC)'s definition of insider trading is mainly based on the anti-fraud provisions of the Securities Exchange Act.
Since the essence of insider trading is fraud in securities trading, if the transaction fails to make a profit, it is impossible to prove that actual damage has been caused to others. This also explains why the amount of civil penalties in insider trading cases is usually calculated based on multiples of "profits obtained" or "losses avoided". Jeff Park said that for crypto assets such as Meme coins, if they are not identified as securities, insider trading regulations will not apply, but should be regulated from the perspective of market manipulation or fraud.