That's what I meant by "other appropriate agency." Bitcoin must fall under the purview of a regulatory agency. I meant actual laws -- not a stated position which can be reversed.
But if that 'other agency' does not have laws on the books that pertain to front-running, etc etc, then it is not illegal. And only FSA would have those laws. Does that make sense?
In the U.S., Bitcoin is regulated under FINCEN (MSB). They have no avenue to regulate front-running or insider trading. Insider trading in Bitcoin is 100% legal. If it were regulated by the SEC it would be illegal.
I'm not an attorney; this is not legal advice.
Remember that Pirate40 was charged by the SEC for violating securities law. Securities laws do apply to bitcoin businesses. Clearly there is a difference between a BTC-denominated security and BTC -- but I am very much unconvinced that securities regulation do not apply to pertinent businesses.
In my view, this would very much violate the spirit of securities regulation.
The fact that BTC is not backed by any asset does not explicitly allow businesses to engage in fraud. Sure, if there are no laws that can be applied, there are no laws that can be applied. You haven't actually done the legal research to determine whether or not there are applicable laws.