Insider trading is considered bad in any type of trading, including crypto trading, because it is an unethical practice that can lead to unfair advantages for certain individuals and damage the integrity of the market.
Insider trading refers to buying or selling securities based on non-public, material information that is not available to the general public. This can include information such as upcoming announcements, earnings reports, or mergers and acquisitions. When individuals trade based on insider information, they have an unfair advantage over other traders who are not privy to the same information. This can result in market manipulation and harm the interests of other market participants.
In the context of crypto trading, insider trading can occur when individuals have access to non-public information about a cryptocurrency or exchange that gives them an advantage over other traders. This can include knowledge of upcoming partnerships, new token listings, or regulatory changes.
Insider trading is illegal and can lead to severe penalties, including fines and imprisonment. It is also detrimental to the overall health and fairness of the market, as it undermines the principle of equal access to information and can erode trust in the market. Therefore, it is important to engage in ethical and legal trading practices and avoid insider trading.