Insider Trading
Trading a financial instrument on the basis of material, non-public information - or unlawfully disclosing such information to a third party.
Also known asInsider dealing
Definition
Insider trading (or insider dealing in EU terminology) is the use of inside information - precise, non-public information which, if made public, would have a significant effect on the price of the instrument - to acquire or dispose of that instrument, or to cancel or amend an order.
What counts as inside information
- Pending corporate actions - M&A, earnings, restructuring.
- Regulatory decisions before publication.
- Pending listing decisions by an exchange or token-listing venue.
- Order-flow data accessible to brokers before client execution.
Regulatory anchor
EU MAR Articles 7–10 and 14; MiCA Article 89 extends the regime to crypto-assets, with specific implications for exchange employees holding pre-listing knowledge. The classic US framework rests on Rule 10b-5 and SEC v Texas Gulf Sulphur.
Crypto-specific patterns
Wallets acquiring large positions in tokens hours before a major exchange listing have been the headline insider-trading case-study of the last three years. On-chain pre-listing accumulation followed by post-announcement disposal is now a standard surveillance template.