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 News, which cited a source with direct knowledge of the inquiry.
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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.
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The letter was sent after the collapse last month of Terra’s UST stablecoin and the associated LUNA token, according to the report.
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The SEC did not immediately respond to a request for comment on the Fox News report.
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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.
Read more: SEC Chair Gensler Suggests Lummis-Gillibrand Bill May ‘Undermine’ Market Protections
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