Ask HN: Is insider trading law enforcable at all in 2021?

#1

Post by mnming » Fri, Jul 23, 2021, 12:40 PM UTC

Recently I keep wondering, with proper encrypted communication and cryptocurrency. Is insider trading law enforcement even possible?

If the law enforcement could not prove: - There was communication happened. - There was big money transfer happened.

What can they do?

Re: Ask HN: Is insider trading law enforcable at all in 2021?

#2

Post by optimizethis » Fri, Jul 23, 2021, 12:47 PM UTC

Heard a stat yesterday that of every 1,000 insider trading events reported to the SEC they have time to investigate 1 or 2. Not exactly comforting to "retail investors".

Re: Ask HN: Is insider trading law enforcable at all in 2021?

#3

Post by PaulHoule » Fri, Jul 23, 2021, 1:24 PM UTC

They will never catch all of them, but they will catch some of them and nail them to the wall really good. (e.g. Martha Stewart)

If anything the privacy of Bitcoin is worse than conventional finance. In the case of Bitcoin the transaction log is in the record so anybody (the mafia, North Korea, ...) can find somebody connected with a transaction, put the squeeze on them till they talk, ...

In the case of conventional finance the feds can do that but they have to fill out a lot of paperwork, spend a lot of money, etc.

Re: Ask HN: Is insider trading law enforcable at all in 2021?

#4

Post by cosmodisk » Fri, Jul 23, 2021, 6:32 PM UTC

People rarely get caught for insider trading because someone overhears them or reads an email. I suspect it's usually the schmucks who can't come with anything but the most basic stuff and then suddenly some decision maker's sister,who works in nail salon, suddenly buys a whole heap of stocks of this niche pharmaceutical firm...

Re: Ask HN: Is insider trading law enforcable at all in 2021?

#5

Post by high_byte » Fri, Jul 23, 2021, 6:59 PM UTC

Two different things. Cryptocurrency is lacking regulation. Insider trading is a broad and ambiguous term up to the SEC to decide and as I would imagine is a difficult task to prove.

Re: Ask HN: Is insider trading law enforcable at all in 2021?

#6

Post by bjourne » Fri, Jul 23, 2021, 7:33 PM UTC

As long as cheating remains profitable people will cheat. Athletes will take doping, sport bettors will bet on fixed games, and company executives will insider trade.

Re: Ask HN: Is insider trading law enforcable at all in 2021?

#7

Post by quickthrower2 » Fri, Jul 23, 2021, 11:52 PM UTC

They have lots of tools at their disposal like undercover, snitches, subpoenas, etc.

Cryptos transactions can be traced if exchanges are cooperating. Monero might be a different story.