- SEC is focusing on making the NFT world safer by ordering the companies to have NFT Insider Trading Policies.
- Even though NFTs are not considered or recognized as security by the SEC, the liability of improper trading can be accused onto a person trading NFTs illegally.
- Many companies and corporations are appreciating this step taken by the SEC as it will help the NFT culture to be established properly in this world.
SEC’s Battle With NFT Players In The Market
The Securities and Exchange Commission, or the SEC, believes that like any other corporate, the NFT marketplace needs to have insider trading policies too. So, are you trading in the NFT marketplace? Read this very carefully.
Although, since the beginning, this issue of having insider trading policies in the world of NFTs was important, it got amplified after an NFT celebrity, which happens to be a high-profile executive was alleged to have made various deals in the NFT industry capitalizing on the information which was categorized non-public.
There was a whole different lawsuit filed due to these acts allegedly committed by the executive.
The surprising fact is that insider trading of securities was not the charge which was indicted upon him, instead, it was the money laundering, of which he was accused of.
This is ironic due to the fact that NFTs are not considered or recognized as security through the SEC. Regardless, the liability of improper trading can be accused onto a person trading NFTs illegally.
What Do You Need To Know About The Policies
The policies whose frameworks are being designed by the SECs will cover a lot of areas where the illegality of NFT trade is possible. One such act is called ‘Wash trades’.
These Wash trades refer to the trades or transactions which do not have any intrinsic commercial value and the transactions cancel each other out.
A lot of companies and corporations are appreciating this step taken by the SEC as it will help the NFT culture to be established properly in this world. The SEC is hoping for more companies to feel this way.
It is always advisable for the players in the NFT marketplace to have a legal assistant to brief them with details so that they won’t get into this kind of legal technicalities.
Source: https://www.thecoinrepublic.com/2022/06/17/sec-to-regulate-nfts-insider-trading-policies-beware/