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Insider Trading at Coinbase

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Re: Insider Trading at Coinbase

#251

Post by matheusmoreira »

lxgr wrote: post #175
reedjosh wrote: post #169

Earlier quoted context omitted.

I think it could slow adoption, but I've been primarily buying offline. Soon I'll have a lightning node too--improving my BTC privacy. Defi exchanges are the next major advancement to government resistance as well. This space would rapidly mature under government regulating away self custody.

If all of that ends up working out, and considering no other restrictions are put in place: How are people going to pay their taxes? Being the exclusive currency accepted for tax payment is an important part of what makes fiat currencies money.

> How are people going to pay their taxes

The government is going to have to suck it up and accept taxes in cryptocurrency. In my country such laws have already been proposed.

Re: Insider Trading at Coinbase

#252

Post by Goronmon »

TheColorYellow wrote: post #198
jcranberry wrote: post #167

Earlier quoted context omitted.

Accredited investing requirements are to keep non-experts or people without money to lose from being swindled by companies which aren't required to be transparent with their financials.

Public companies swindle quite often, and usually with more catastrophic results. When are we going to admit that the current rules are no longer working?

So then you agree that accredited investing requirements aren't the problem?

Re: Insider Trading at Coinbase

#253

Post by matheusmoreira »

snarf21 wrote: post #168
sauwan wrote: post #78

Earlier quoted context omitted.

Couldn't this just be that they keep some amount in cold storage that's not super easily accessible?

They're an exchange. Cold Storage is not their job. It isn't much of an exchange if I have to wait 8 hours to put in a sell order.

They don't need hot wallets for exchange trading. That's just normal accounting, numbers in a centralized database. They could have zero reserves and it'd still work. Only when you withdraw cryptocurrency from the exchange and into your own wallet do they need to produce actual coins for the transaction.

Re: Insider Trading at Coinbase

#254

Post by notahacker »

BitwiseFool wrote: post #212
toomuchtodo wrote: post #199

Earlier quoted context omitted.

The dentist can weather the poor investment. Knowledge does not make you financially solvent. It just improves your gambling odds as it relates to equity investment.

From my perspective, only letting people who are well off enough to 'weather the loss' seems like something that only exacerbates the wealth gap.

The wealth gap isn't going to shrink by making it easy for startups (or "startups") that can't convince rich strangers (or friends and family, or crowdfunding platforms) they're worth investing in to convince larger numbers of less rich strangers to do it instead.

Most companies funded by professionals go bust and the risk adjusted returns to VC as an asset class aren't that great: the funds that have spectacular returns being balanced out by those that lose their LPs money. And few unicorns are going to be spending their effort pitching average earners for $2k cheques. Why would we expect the average joe to invest better than the pros with less capital to diversify, no board seats and substantially worse dealflow?

Re: Insider Trading at Coinbase

#255

Post by SkipperCat »

TheColorYellow wrote: post #209
SkipperCat wrote: post #83

I just consider Coinbase and it ilk as "safe" places for cryptocurrency. I don't think of them as ethical in the same way I'd think of an account at TDAmeritrade, Schwab, etc. Traditional brokerage houses have regulations forcing them to play fair, and reporting structures to enforce it. Crypto exchanges are trying to convince the world they are a more secure place for your coins. Better IT security and highly funded…

I appreciate your sentiment, but I want to point out that your belief that "Traditional brokerage houses have regulations forcing them to play fair" and believing that there are adequate "reporting structures to enforce it" is a great example of the moral hazard that exists in the market today. I agree that law and regulation plays an important role in the market, but as the market has advanced and become increasingl…

Everything is relative. You cite GME, fair point. I'll cite Quadriga CX, where the founder died in India and took the passwords to the grave with him. Pretty much everyone had their coins frozen forever. That would never happen to people's stock portfolio's at a major brokerage firm.

The SEC is far from perfect, but what they do adds value to the individual investor in general.

Re: Insider Trading at Coinbase

#256

Post by matheusmoreira »

vosper wrote: post #6

The big-brain move would be to identify the wallets that must be trading on “insider” info, and copy their trades?

Yeah. Bitcoin for example has rich lists: we know the addresses of whales and can track their movements via the blockchain. Some rich person suddenly moving hundreds of thousands in bitcoin to an exchange can be a potent sell signal.

Re: Insider Trading at Coinbase

#257

Post by reedjosh »

matheusmoreira wrote: post #251
lxgr wrote: post #175

Earlier quoted context omitted.

If all of that ends up working out, and considering no other restrictions are put in place: How are people going to pay their taxes? Being the exclusive currency accepted for tax payment is an important part of what makes fiat currencies money.

> How are people going to pay their taxes The government is going to have to suck it up and accept taxes in cryptocurrency. In my country such laws have already been proposed.

I love this. Yeah, they'll have to allow for off ramps or accept crypto for tax payments.

I say have to as otherwise a rich private currency economy will grow unmolested by tax collectors.

Re: Insider Trading at Coinbase

#258

Post by axg11 »

giarc wrote: post #183
axg11 wrote: post #91

Why is everyone discounting the possibility that this is a Coinbase controlled account? They would surely need to purchase the tokens before they list them.

$26-80k in coins doesn't seem like much?

Could be sufficient for (limited) market making. There are dozens of explanations for why Coinbase would want to hold these coins. They're not just an exchange anymore, they offer many other services.

Re: Insider Trading at Coinbase

#259

Post by FabHK »

Jorge1o1 wrote: post #191
toomuchtodo wrote: post #174

Earlier quoted context omitted.

Regulators discover and patch regulatory gaps. One might say that’s doing their job, versus overzealousness.

So a “poor” but highly knowledgeable financial planner making “only” $180k a year can’t invest in their friend’s startup because the regulators deem it too risky. But some random dentist can? https://www.bloomberg.com/opinion/articles/2018-09-24/earnin...

There are financial criteria, or professional criteria to reach accredited investor status. In particular, any investment professional that has passed the Series 7 exam (or a few others) is an accredited investor.

That regulation seems sensible to me, and not overzealous.

https://www.sec.gov/education/capitalraising/building-blocks...

Re: Insider Trading at Coinbase

#260

Post by reedjosh »

VHRanger wrote: post #203
thwayunion wrote: post #173

Earlier quoted context omitted.

I cannot think of a single previous business cycle that was driven by this dynamic. Can you give some historical examples? This strategy seems unique to the most recent generation of capitalists (sharing economy, crypto stuff, etc).

The 2008 bubble was largely driven by the deregulation of financial instruments (and non-regulation of new instruments) in the late 1990 and early 2000.

It was also driven by easy fed dollars and banks that knew they'd be bailed out.
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