Glossary / Regulation & tax
Insider information
Also known as Inside information.
- What is Insider information?
- Insider information is precise, non-public information about a crypto-asset or its issuer that a reasonable holder would likely use when deciding to buy or sell.
Regulation (EU) 2023/1114 (MiCA) writes the concept as inside information and defines it in Article 87, with the market abuse title applying across the EU from 30 December 2024. Two limbs count: unpublished facts about an issuer or asset, and client order flow held by whoever executes orders. Acting on either is prohibited whether or not the trade happens on a platform.
How it works
Insider information under MiCA has two statutory limbs, both set out in Article 87(1). The first covers precise information that has not been made public, relating directly or indirectly to issuers, offerors, persons seeking admission to trading, or the crypto-assets themselves, where publication would likely move the price of those assets or of a related one. The second applies to anyone executing orders for clients, and captures what a client tells them about pending orders. That limb protects a client's resting order the same way as an unannounced corporate event.
Two terms inside that definition are themselves defined. Article 87(2) calls information precise if it points to circumstances that exist or may reasonably be expected to arise, specifically enough to support a conclusion about the price effect, and it extends to the intermediate steps of a drawn out process. Article 87(4) sets no percentage move as the threshold for a significant price effect: the test is whether a reasonable holder would likely use the information as part of the basis of an investment decision.
Article 89(5) lists who is caught. Board members, holders of capital in the issuer, offeror or person seeking admission to trading, and anyone involved in criminal activities all qualify. So does anyone with access through the exercise of an employment, profession or duties, or in relation to a role in the distributed ledger technology or similar technology. Anyone else who knows, or ought to know, that what they hold is inside information is caught as well.
Penalties sit in Article 111. For infringements of Articles 89 to 92, Member States must provide for maximum administrative fines of at least EUR 5 000 000 for a natural person, and EUR 15 000 000 or 15% of total annual turnover for a legal person.
Where you see it
Insider information reaches an ordinary buyer through the trading venue rather than through a company boardroom. Article 92 obliges any person professionally arranging or executing crypto-asset transactions to run systems that prevent and detect market abuse, and to report any reasonable suspicion to its national authority without delay, including suspicion arising from the consensus mechanism itself. That is the surveillance running behind the order book on an authorised EU venue.
Issuers meet the same concept from the other side under Article 88, which requires prompt public disclosure, forbids bundling that disclosure with the marketing of their activities, and makes them keep the disclosed information on their website for at least five years. Delay is allowed only where immediate release would prejudice legitimate interests, the delay would not mislead the public, and confidentiality can be maintained.
Scope is wider than the venue: Article 86 applies the market abuse title to anyone dealing in crypto-assets admitted to trading, whether or not the transaction happens on a platform, and to acts in third countries as well as in the Union.
Insider information vs Market manipulation
Market manipulation and insider information are separate prohibitions sitting in different MiCA articles. Insider information turns on an information gap: Articles 89 and 90 prohibit trading on what you know and passing it to someone else. Market manipulation, in Article 91, turns on conduct rather than knowledge, covering false or misleading signals about supply, demand or price and behaviour that pins a price at an artificial level, even where nobody involved holds a secret. Article 91(3) counts as manipulation voicing an opinion on a crypto-asset in the media after taking a position in it and profiting from the price impact, without disclosing that conflict of interest. Both prohibitions fall inside the same penalty band under Article 111.