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Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

justice.gov

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Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#161

Post by noobermin »

pcthrowaway wrote: post #116
ChainOfFools wrote: post #107

Earlier quoted context omitted.

Crypto people love to talk about incentives when referring to things like crypto adoption by the market, or corrupt actions on the part of incumbent powers like bankers or politicians. They are much less enthusiastic about discussing incentives when it comes to things like exchange operatiors front running their clients, centralizing forces in crypto generally, etc.

I work for a company that provides financial services to/on centralized exchanges, but none of us really like the centralization there; even if it's our bread and butter (for now) I think most "crypto people" are more excited about decentralized exchanges.

This sounds a lot like a no-true scotsman...

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#162

Post by sudosysgen »

incone123 wrote: post #145
etothepii wrote: post #123

Earlier quoted context omitted.

I worked for an investment bank for many years. We had to sign a declaration that we would not make trades of any kind without permission from compliance (the withholding of this permission in 2012 is why I am not a BitCoin millionaire). However, there was no requirement to hand over login details to brokerage accounts etc. I would be surprised if there was elsewhere.

The person you replied to said 'statements' not 'login details'. Are you treating these things as synonymous? I suppose if I was only required to hand over statements I could edit them.

Not login details, addresses are read only. And editing statements is fraud.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#163

Post by mandeepj »

zionic wrote: post #76
romellem wrote: post #16

Wow, the indictment references [this tweet][1] that caused Coinbase to investigate the matter and ultimately led the defendant in being caught at the airport before trying to leave the country. > On May 11, 2022, Coinbase’s director of security operations emailed ISHAN WAHI to inform him that he should appear for an in-person meeting relating to Coinbase’s asset listing process at Coinbase’s Seattle, Washington offic…

Wow, not that I would ever do anything like this… but if I was accused of such a thing the last thing I would do is book a flight for tomorrow .

> the last thing I would do is book a flight for tomorrow.

Maybe, that was his 'last thing'

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#164

Post by [deleted] »

noobermin wrote: post #161
pcthrowaway wrote: post #116

Earlier quoted context omitted.

I work for a company that provides financial services to/on centralized exchanges, but none of us really like the centralization there; even if it's our bread and butter (for now) I think most "crypto people" are more excited about decentralized exchanges.

This sounds a lot like a no-true scotsman...

[deleted]

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#166

Post by capableweb »

tempsy wrote: post #141
mikeyouse wrote: post #11

One perk of a public blockchain is that crimes like these are more transparent! A Twitter user 'discovered' the fraud a few months ago: https://twitter.com/cobie/status/1513874972552355846

just because it's available doesn't mean it's trivial to figure out. it does actually take effort to find something like this.

That specific thing is kind of trivial to check though. Download the full chain, check which addresses has exactly the same list of tokens as the list was published by Coinbase, check which ones received the tokens shortly before it was announced.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#167

Post by WJW »

aaaaaaaaaaab wrote: post #130
WJW wrote: post #30

Earlier quoted context omitted.

I wonder how many wallets you would need before it becomes a problem to track. I would guess in the millions or more since graph algorithms are pretty efficient these days.

How long of a linked list do you need to be unable to reach its tail?

I was thinking more along the lines of a directed graph where each of the wallets pass the funding received to multiple other wallets before the money finally converges to a destination wallet, it doesn't have to be a straight linked-list style line of wallets.

In any case, the transaction costs alone probably makes this prohibitive for more than a few dozen wallets.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#168

Post by georgeecollins »

incone123 wrote: post #138
duxup wrote: post #125

Earlier quoted context omitted.

>is what sets apart the blockchain and traditional financial networks, when it comes to fraud Are you telling me that fraudsters get caught on the blockchain more than other places?

This might be the same problem as libre open source software: Anyone can search for evidence of fraud (or software bugs) but not many are doing so.

This! It's so obvious from the buy / sell ratios of coinbase that they are fueled by millions (or 100ks) of small investors investing $10k or less. Joe consumer isn't going to sue over a bad investment. I am guessing that polygon, gamestop is similar. Also the counter parties aren't major US companies, they are often small to mid cap LLCs. So when the thing they push collapses they sort of fade away.

If this were a major US company ripping off say a US bank, there would be investigation. But a small start up (I'm thinking of the issuers, not coinbase) ripping off people all over the world for $100- $20k with false promises-- it's practically a victimless crime. Coinbase and the exchanges aren't necessarily guilty of this but they are complicit.

Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

#169

Post by H8crilA »

wmf wrote: post #150
H8crilA wrote: post #133

Why are they being prosecuted? Those are not securities, or are they? "Wire fraud" implies that they defrauded someone by lying to their own advantage over a digital channel. Insider trading is generally legal for non-securities. EDIT: I am not implying that they shouldn't, on a moral level. They should! I am asking about legal technicalities, and about the state of law around those issues.

"Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were securities, and then typically sold them shortly after the announcements for a profit." https://www.sec.gov/news/press-release/2022-127

Yeah, it may be a way to officially call at least some of them securities:

> "We are not concerned with labels, but rather the economic realities of an offering," said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. "In this case, those realities affirm that a number of the crypto assets at issue were securities, and, as alleged, the defendants engaged in typical insider trading ahead of their listing on Coinbase. Rest assured, we’ll continue to ensure a level playing field for investors, regardless of the label placed on the securities involved."

Should this go to the courts which end up deciding that they are in fact securities - that will be a nice precedent.

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