Reddit Moderators Removed on Suspicions of Insider Trading During Community Points Shutdown
Litigation and digital assets attorney Andrew Balthazor was cited in a CryptoSlate article covering the recent dismissal of the moderators of Reddit's largest crypto forum over concerns about insider trading. The article explains that the moderators allegedly sold off MOON tokens just before Reddit announced the shutdown of its Community Points program. Users raised concerns about the platform's governance and potential securities fraud charges. Mr. Balthazor commented that the U.S. Department of Justice (DOJ) treats such actions as criminal wire fraud, regardless of whether digital assets are considered securities.
“The DOJ prosecutes these actions as criminal wire fraud, which does not require proving the underlying digital assets are securities. There are several recent examples of this. The DOJ has also brought wire fraud charges in other crypto contexts, like rug pulls or ICO frauds,” he said.