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Blockfi agrees to pay $100M in penalties and pursue registration

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Re: Blockfi agrees to pay $100M in penalties and pursue registration

#231

Post by chollida1 »

abritrum wrote: post #219
chollida1 wrote: post #71

Earlier quoted context omitted.

I"ll bite on this. I work in the financial markets and have alot of experience in market structure. What evidence do you have of wash trading? How would you tell if something is a wash trade? How would you determine if someone is naked shorting? What evidence would you provide for something like this?

You have every reason to be skeptical of my claims. I will not share the ticker since that would mean I am trying to get publicity. Another poster said that you don't know for sure whether it is naked shorting or wash trading. He is correct and I don't have mathematical proof. But there are enough signs: 1) Company had debenture that was paid off early to toxic lender 2) Toxic lender has been caught and fined by the…

Well that's disappointing, I held out hope that you would have some actual evidence. It doesn't seem like you have anything other than what happens to ever single penny stock.

1 and 2 have nothing to do with any of your claims

3 is the only way to sell stock in a thinly traded market.

4 i'e been in the industry for more than 10 years and have never come across anyone who has actually performed these fabled short ladder attacks.

This isn't something that happens, its a creation of the hive mind of /r/superstonk.

If they want to say its a real thing then the onus is on them to put forward some evidence that it happens. I so far havent' seen anything that looks compelling.

Point 5 makes no sense at all, why would people cover all at the same time?

6. this is what happens with shitty stocks that has someone trying to offload their long position, it by definition, has to close down as the selling pressure overwhelms the buying pressure.

7. again no sequitor and has nothing to do with shorting or wash trading.

Do you have any actual data to back up the wash trade or short claims?

And as a side note, shorting to zero isn't something that happens as you need to close out your position by buying to make any money. And as stock prices drop they run the risk of being delisted before the shorter can buy back their position. Which is a terrible position to be in.

A typical shorter will short at $100 and buy back at $50 or $25 and doesn't mess with anything under a $1.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#232

Post by [deleted] »

chollida1 wrote: post #231
abritrum wrote: post #219

Earlier quoted context omitted.

You have every reason to be skeptical of my claims. I will not share the ticker since that would mean I am trying to get publicity. Another poster said that you don't know for sure whether it is naked shorting or wash trading. He is correct and I don't have mathematical proof. But there are enough signs: 1) Company had debenture that was paid off early to toxic lender 2) Toxic lender has been caught and fined by the…

Well that's disappointing, I held out hope that you would have some actual evidence. It doesn't seem like you have anything other than what happens to ever single penny stock. 1 and 2 have nothing to do with any of your claims 3 is the only way to sell stock in a thinly traded market. 4 i'e been in the industry for more than 10 years and have never come across anyone who has actually performed these fabled short ladd…

[deleted]

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#233

Post by ProjectArcturis »

abritrum wrote: post #229
ProjectArcturis wrote: post #226

Earlier quoted context omitted.

I work in finance and trade stocks every day. Honestly, this seems like extremely weak evidence for any kind of market manipulation. The price movements you've seen are quite consistent with a sucky company that's going down because it's overvalued. It's generally pretty hard to short OTC stocks, so the idea that someone is out there short 10s of millions of shares is pretty far-fetched. And to what end? If the stock…

Thank you for the advice. This is a little special because the owners of the loan company have been fined by the SEC for precisely the naked short selling I am accusing them of (without revealing them, an unrelated case is https://www.thestreet.com/investing/stocks/sec-charges-filed... ). Naked shorting a stock to 0 and claiming tax benefits is what some of these toxic lenders do. I am invested only in the amount I c…

Does the stock you like have a death-spiral PIPE deal like the one in the article? If so, sell. You're correct that someone is pounding the stock down, but what you're missing is that management is helping them do that by printing new shares and selling to the PIPE lender at a discount. It's just a way for management to pay their own salaries by diluting the existing shareholders.

There will be no reckoning. What they're doing is scummy but legal. The selling will only stop when no outsiders will buy any shares at any price.

Well, legal as long as they don't short ahead of time. But either way, it's a terrible investment for you.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#234

Post by abritrum »

chollida1 wrote: post #231
abritrum wrote: post #219

Earlier quoted context omitted.

You have every reason to be skeptical of my claims. I will not share the ticker since that would mean I am trying to get publicity. Another poster said that you don't know for sure whether it is naked shorting or wash trading. He is correct and I don't have mathematical proof. But there are enough signs: 1) Company had debenture that was paid off early to toxic lender 2) Toxic lender has been caught and fined by the…

Well that's disappointing, I held out hope that you would have some actual evidence. It doesn't seem like you have anything other than what happens to ever single penny stock. 1 and 2 have nothing to do with any of your claims 3 is the only way to sell stock in a thinly traded market. 4 i'e been in the industry for more than 10 years and have never come across anyone who has actually performed these fabled short ladd…

So I wrote a post in haste and deleted it, here is a more reasoned response.

If you want definitive proof, you need to see sell tickets. That is what our whistleblower reports to the SEC have been requesting. I do not have sell tickets.

I wrote this as a response before: my biggest proof was that over the past year, if I tally up the number of uncovered short sales it is more than 2M. How do I know that these sales are uncovered? If there is any day with more than 50% shorting, I know that the short cannot have covered. If I tally up the differences, I get at least 2M uncovered over the past year. This model assumes that the short covers the same day (which we can see from tape they do not). Even if they did cover the same day, they are still short 2M shares uncovered.

I was mistaken with "short ladder attack" - I should have said short attack. The price action is strange. A bunch of selling say happens at one price point, and then the seller reduces the price by 10c and offers a huge lot. When we try to take the wall, the offer is withdrawn. We have definitive proof of spoofs that were withdrawn like this.

1 and 2 are very relevant to the current discussion. Since the toxic lender has done exactly this to other companies. As soon as a loan is given, they short the company to shit. Except here the company returned the loan. They have been fined by the SEC for similar behavior before and this playbook is seemingly related. The closest is (Badian and Sedona, https://www.sec.gov/news/press/2003-26.htm). So it is not inconceivable that this is happening here.

I have screenshots that I have submitted to the SEC. I can share them with you.

Like I said, I understand the OTC is ridden with fraud. And this may well be the case here and I fully admit I may be wrong.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#235

Post by abritrum »

ProjectArcturis wrote: post #233
abritrum wrote: post #229

Earlier quoted context omitted.

Thank you for the advice. This is a little special because the owners of the loan company have been fined by the SEC for precisely the naked short selling I am accusing them of (without revealing them, an unrelated case is https://www.thestreet.com/investing/stocks/sec-charges-filed... ). Naked shorting a stock to 0 and claiming tax benefits is what some of these toxic lenders do. I am invested only in the amount I c…

Does the stock you like have a death-spiral PIPE deal like the one in the article? If so, sell. You're correct that someone is pounding the stock down, but what you're missing is that management is helping them do that by printing new shares and selling to the PIPE lender at a discount. It's just a way for management to pay their own salaries by diluting the existing shareholders. There will be no reckoning. What the…

They had a death spiral PIPE deal, but they paid off the loan. The company was (edited: almost) shorted to death in the months during they had the loan.

Appreciate the advice.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#236

Post by ValentineC »

capableweb wrote: post #17
coconut08 wrote: post #7

Is there something about Gemini's version of the interest bearing account that makes it less problematic than Blockfi's offering? Why is it that Blockfi has taken so much heat and Gemini has seemed to fly completely under the radar? Does this suggest that the issue was the marketing and the implementation that was the issue rather than the product itself?

I guess it could have something to do with that Gemini is a registered exchange and regulated by the NYDFS, while BlockFi goes the more traditional cryptocurrency exchange route of "Let's see what turns out to be illegal when we get there".

Note that Gemini Earn is run by Genesis Global Capital, not Gemini themselves:

https://www.gemini.com/legal/gemini-earn-program-terms-and-a...

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#237

Post by 5350-uiop-1130 »

SilasX wrote: post #224
5350-uiop-1130 wrote: post #84

I've had trouble finding clear jargon-free sources to explain how these lending platforms and various defi lending platforms generate yield. As far as I can tell it mostly works by token inflation. Celsius, Nexo tokens, Compound and Aave tokens for example. But these tokens are given as a reward to yield farmers so there is a huge sell pressure and yet I don't understand who is on the buy side. Why would you buy thes…

I can answer that, since I'm using Compound (and Uniswap). To start with, they lend out at interest, which is paid by users, for the same reason anyone would take a collateral-backed loan, knowing they'll have to pay interest. It could be speculation on sh-tcoins, investment in stocks, whatever. The Compound contract doesn't care because they're more-than-fully backed and have a mechanism for liquidation at a profit…

thanks

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#238

Post by astrange »

smt88 wrote: post #211
astrange wrote: post #208

Earlier quoted context omitted.

> There are no financial regulations that currently harm me, a consumer. All consumer banks have identical products, preventing you from starting things like a tontine/friends cash pool without a business behind it. KYC means you have to send in recordings of your face. Accredited investor rules often mean only rich people can get richer. There's definitely some harmful ones.

> preventing you from starting things like a tontine/friends cash pool without a business behind it This is untrue in the US. Nothing is stopping you from contracting a tontine among friends. You just can't sell it to strangers. > KYC means you have to send in recordings of your face. This is untrue in the US too. Where do you have to do this? > Accredited investor rules often mean only rich people can get richer. I…

> This is untrue in the US. Nothing is stopping you from contracting a tontine among friends. You just can't sell it to strangers.

What I mean is there isn't a feature where you can easily open a separate account and share it with them, or let them deposit to it, that doesn't involve separate money transmitter apps/doing your own accounting/being married to them or knowing their SSN.

Hmm, you could sell something like one under Reg CF as long as it's not an "investment company", I think? I've seen some weirdly structured unaccredited crowdfunds, there was one that sent me $200 of products for $250 equity investment, seemed like a good deal to me.

> This is untrue in the US too. Where do you have to do this?

That's how id.me works. Just using a picture of your passport doesn't provide a liveness check, though other places will just ask you more questions off your credit report instead.

> People of moderate net worth should avoid assets like venture equity like the plague.

Hopefully that lets rich people do it then, since they can easily have negative net worth (via loans against illiquid assets.) But accreditation has more than one way in, and not all of them are about assets - income or a stockbroker license are enough.

The math behind "risk" in MPT/Sharpe ratio based advice like you get from robo advisors is not that good though. It treats it like it's symmetric but downside risk of your early assets isn't that important (your income will replace them), its diversification doesn't help as much as it says (correlations go up in a down market), and once you have moderate savings you should be taking a lot more upside risk than it recommends.

Target date funds are the right answer for retirement funds but not for everything. Even if they were, the more uncorrelated alpha the better even in the MPT model.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#239

Post by endorphine »

SilasX wrote: post #196
endorphine wrote: post #128

Earlier quoted context omitted.

I'm not objecting; this was an honest question.

So is mine. (And you can replace "object" with "find questionable or needing justification".)

I don't believe it "needs justification" and I already explained why I'm wondering: because I can't see how it's related to the rest of the comment.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#240

Post by SilasX »

endorphine wrote: post #239
SilasX wrote: post #196

Earlier quoted context omitted.

So is mine. (And you can replace "object" with "find questionable or needing justification".)

I don't believe it "needs justification" and I already explained why I'm wondering: because I can't see how it's related to the rest of the comment.

It "needs justification" because I erred on the side of greater rather than lesser disclosure when I'm commenting about things I have holdings in, in which case there's always a danger that one will "talk their book" (promote the things that benefit them financially).

True, that dyanmic may not be happening here, but (see previous comment) it is also a courtesy to err on the side of over-disclosing rather than under-disclosing.

Your comments are a slightly-obfuscated version of "wh... why would you erase the chalkboard after your class is over? That spends time that doesn't personally benefit you. Since we have janitors for that, you don't really need to." My immediate reaction would be, "just accept the courtesy, dude".

And here -- just accept the transparency. Don't make me have to justify it.

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