U.S. regulators are complicit as militant lawmakers allegedly broke laws meant to prevent insider trading and conflicts of interest. About 74 members of Congress could be acquitted after trading millions of dollars in unreported stock.
The U.S. Securities and Exchange Commission (SEC), which oversees matters of market manipulation, tightened About similar violations in cryptography. The sector has always maintained an ironic detachment from any form of central control.
Crypto insider trading issues purulent For a while. However, observers say the company’s characteristic distrust of centralized oversight may be justified following the application of this apparently selective law by securities regulators.
“Without regulation, various questionable market manipulation practices, such as pump-and-dump schemes, are gaining momentum,” Soham Panchamiya, associate at crypto-focused law firm Reed Smith, told BeInCrypto. .
“Ultimately, this kind of effort has always existed historically.
74 lawmakers did not report financial transactions
Thursday, Business Insider It was published It lists 74 members of Congress who claimed they had failed to “properly report their financial transactions.” I am asking you to make a transaction.
The US Congress, also known as the STOCK Act, has passed legislation to prevent the issue of “insider trading and conflicts of interest” among members of Congress. It also wanted to “force lawmakers to be more transparent about their personal financial dealings.”
Legislators must expedite public disclosure of “stock transactions made by themselves, their spouses, or dependent children.”
“However, many members of Congress are not fully compliant with the law,” the report said. “They use ignorance of the law, clerical errors, accountant errors, etc. as excuses.”
Among the identified lawmakers is Texas Republican Pat Fallon. Fallon failed to disclose his more than 93 stock deals worth $17.53 million on time. He was delayed by up to four months. The deal is set for him in the first half of 2021.
Bitcoin Proposer Sen. Cynthia Lumis was a few days late in reporting its $100,000 purchase of cryptocurrency in August. A Wyoming Republican said the delay of more than 45 days was due to a “filing error.”
Nevada Democrat Rep. Susie Lee reportedly failed to properly disclose more than 200 stock deals from early 2020 to mid-2021. The deal is worth up to $3.3 million. Lee and her husband weren’t reported until August 13, 2022. In 2021, she traded eight shares as well.
Why MPs Shouldn’t Trade Stocks
US lawmakers continue to buy and sell individual stocks with few restrictions. That is despite the influence they wield as makers of the laws that govern corporate activity. It also allows unfettered access to information that may not be publicly available.
Between 2019 and 2021, approximately 183 incumbent senators or representatives reported trading stocks or other financial assets. either by yourself or a close relative, according to In an investigation by the New York Times.
However, 97 of them said,sat down A congressional committee could give insight into the companies that reported stock trading.” For example, Senator Tommy Tuberville is a Republican from Alabama.
He is also a member of the Agriculture Committee. Since last year, Tuberville has frequently reported deals in “contracts related to cattle prices.” As the senator himself admitted, that was when the committee was “talking about livestock markets.”
Rep. Bob Gibbs, an Ohio Republican on the House Oversight Committee, reported that he bought shares in pharmaceutical company AbbVie in 2020 and 2021.
These examples illustrate the risks of ethical failure, conflicts of interest, and insider trading by incumbents. Insider trading is illegal. This practice gives an advantage in stock market trading due to privileged access to sensitive information.
Double Standards: The Crypto Regulatory Dilemma
So what about lawmakers who flout insider trading laws?
Not so much. In the example of the 74 members of Congress who failed to report a transaction on time in violation of the STOCK Act, they would likely face fines. Business Insider reports.
It may simply be “waived by the House or Senate Ethics Officer.” Lawmakers downplay the crime of insider trading, but crypto investors cannot say the same. The SEC is cracking down on the industry with behavior that comes across as a moral double standard.
In July, the SEC and the US Department of Justice (DOJ) filed civil and criminal charges against Ishan Wahi, the former product manager of cryptocurrency exchange Coinbase Global. This was the SEC’s first insider trading accusation involving cryptocurrencies.
Wahhi was indicted along with his brother Nikhil and his associate Samir Ramani. Ishan Wahi allegedly shared “confidential information” with his brother and friends about crypto assets that Coinbase was about to list on the exchange.
Nikhil Wahi and Ramani are said to have made a profit on more than $1.1 million in sales25 ethereumThe base cryptocurrency before Coinbase announced its listing. This has been charged with occurring at least 14 times between June 2021 and April 2022.
Nikhil Wani pleaded guilty to wire fraud conspiracy charges in September. A ruling is expected in December. His brother Ishan has pleaded not guilty and is scheduled to appear in court on March 22, 2023. Ramani is still on the run.
Soham Panchamiya, an associate at Reed Smith Law Firm, told BeInCrypto:
“During various scandals (high seas, Coinbase), the lack of regulation in the industry has allowed some bad actors to smear the entire market and undermine trust. ”
However, this is “easily controllable”. Continuing, Panchamiya said:
“Countries around the world are beginning to seriously introduce and incorporate crypto-specific laws and regulations into their national frameworks to protect consumers and keep bad guys out.”
There is only one other allegation of insider trading involving cryptocurrencies, which is on record. June, DOJ Paid Former OpenSea product manager Nathaniel Chastain was involved in “wire fraud and money laundering” in connection with plans to conduct insider trading on NFTs.
Chastain allegedly traded inside information. irreplaceable Tokens (NFTs) that were to be featured at the largest OpenSea NFT MarketplaceHe did this for “personal financial gain,” said U.S. Attorney Damien Williams.
“NFTs may be new, but this kind of criminal scheme is not,” he said. “[The] This indictment demonstrates the agency’s commitment to rooting out insider trading, whether it occurs in the stock market or on blockchain. ”
According to the DOJ, charges related to wire fraud and money laundering each carry up to 20 years in prison. Interestingly, the maximum possible sentence is stipulated by Congress.
These are the same people who pay $200 fines for violating insider trading laws. Or who will get their Ethics Committee colleagues to drop their penalties? By this standard, US lawmakers have no moral right to project cryptocurrencies as a beacon of justice.
They are too dirty to lead a crusade against insider trading and conflict of interest issues in the cryptocurrency industry. From the evidence, there is a clear selective application of the law. One for lawmakers and one for cryptocurrency participants.
Congressional intervention suggests that cryptocurrencies have failed as a radical alternative to money or as self-regulation. But it does not offer another solution to the problems of financial censorship, state power, and collusion that Bitcoin and its derivatives address.
Blockchain may have flaws as an alternative to the traditional idea of money and property. But its democratic infrastructure is a fair starting point for conscientious progress, especially in the fair application of laws.
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