Insider trading doesn't apply to most "traditional" assets either. Everyone's free to trade in FX and commodities for example.

Devils advocate:

The SECs core job is to protect investors and assure orderly markets. But it is not clear that buying a crypto asset IS an investment and one job of markets is to take money away from people who make dumb decisions (like buying a crypto "asset" only because Coinbase listed it). So stopping this doesn't actually fit their mandate any more than stopping people betting on sports or buying lottery tickets does.

And that's without getting into the other points people have listed:

* the SEC is toothless * FX isn't a regulated market, you absolutely CAN use "insider" info to trade Euros, USD etc. * its technically AND legally hard to prove insider trading in Crypto (and elsewhere) * if they did, and Coinbase etc moved their operations to unregulated destinations would that actually make anyone safer?

Because SEC is something specific to US and crypto is international perhaps? I doubt SEC has anything to say in this regard when the trading happens to belong to a citizen of China, for example. And while I do know Coinbase is US firm, so is AMEX. Insider trading at AMEX in regard to foreign citizens isn't something they can do anything about it, can they?

Going to play the "my uncle works at Nintendo" card here. My friend works for the SEC and has been in regular contact with me for crypto technical details. Securities is definitely working on rules, but it takes time for the rule makers to learn the technology and understand how to best regulate it.

Because they are a gutted, disempowered US-regulator. Wrecked by 4 years of Trump and countless other presidents before them.

Possibly there is also not the political will to ramp up the regulatory speed and power although I still have hope that Biden will be able to change that at least a bit.