Insider dealing, also known as insider trading, involves the unfair practice of trading financial instruments, including digital assets, based on confidential, non-public information obtained through a privileged position. This illicit activity gives the perpetrator an unfair advantage over other market participants, distorting market fairness and integrity. It is generally prohibited in regulated markets to ensure equitable access to information and protect investors. Detecting and preventing insider dealing in decentralized markets presents unique challenges.
Context
The discussion surrounding insider dealing in the crypto market often addresses the difficulties in applying traditional securities laws to decentralized and pseudonymous environments. A key debate involves defining what constitutes “insider information” within a transparent but often anonymous blockchain context. Future developments will likely focus on enhanced on-chain analytics and regulatory oversight tools to identify and deter such manipulative practices within digital asset exchanges and protocols.
CASPs must immediately implement robust, consistent surveillance systems to prevent and report insider dealing and market manipulation across all MiCA-regulated activities.
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