Insider trading refers to buying or selling a company's stock or securities based on confidential, nonpublic information. While some forms of insider trading are legal, many countries deem certain practices illegal, viewing them as unfair advantages. In the U.S., the SEC regulates these laws, allowing insiders to trade shares if registered appropriately. Illegal insider trading can occur when anyone, including relatives or bystanders, uses insider information to profit. Recent examples of this illicit trading have surfaced in the crypto space, prompting scrutiny. Insider trading penalties in the U.S. can be severe, including up to 20 years in prison, substantial fines, and disbarment from public company roles. High-profile cases include the Coinbase insider trading scandal and others involving companies like Long Blockchain. Despite increased regulations and detection efforts, challenges remain, particularly in the rapidly evolving landscape of cryptocurrency markets. As the SEC becomes more vigilant about insider trading, individuals privy to nonpublic information must be cautious. Authorities are working to enhance safeguards across all trading platforms.

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