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Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

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

#191

Post by skc »

modeless wrote: post #13
bpodgursky wrote: post #7

Hmm. Is this actually "insider" knowledge? I personally question the validity of this charge. This employee had knowledge of what COINBASE was going to do with the currency (ie, list it). He had no fiduciary responsibility as pertaining to the coin itself. This is like knowing that Warren Buffer is going to say good thing about Microsoft tomorrow, and buying it today as a result (expecting it to rise). Is that actual…

It's not confirmed to be illegal until they get a conviction. So we will find out! It will be an interesting case. I'd wager they do get convicted but we'll see.

Does the fact that he tried to flee have any bearing on this or can it plausibly be argued away is irrelevant?

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

#192

Post by [deleted] »

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.

[deleted]

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

#193

Post by treis »

stingraycharles wrote: post #47
est31 wrote: post #38

Note that they were charged for wire fraud and wire fraud conspiracy. So not for actual Section 10(b) violations, aka insider trading.

This may sound like a dumb question, but as a foreigner, I have no idea what wire fraud actually means, but I hear it pretty often. The explanation I found “Mail fraud and wire fraud are terms used to describe the use of a physical or electronic mail system to defraud another” doesn’t really help me further, other than it just being “fraud”. What would be the difference between insider trading and fraud, in this spec…

Note that the fraud here is against Coinbase. Namely, that the defendant who worked there fraudulently agreed to abide by non-disclosure and trading policies. The others are wrapped up in conspiracy charges.

I think this is a pretty novel charge and IMHO isn't going to stick. They're going to have to prove an intent to deceive and deceive specifically to "insider trade". Agreeing not to disclose and then disclosing isn't in itself fraud. You have to plan to disclose prior to that agreement to make it fraud.

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

#194

Post by Dracophoenix »

pavlov wrote: post #73
skidd0 wrote: post #58

Earlier quoted context omitted.

Knowing privileged info and acting on it as an individual is not he same as intentionally misleading another person.

In a market that promises information symmetry, there’s no difference between the two.

That's incorrect. Due diligence is expected of any person who enters a contract. This forum was recently poopooing Musk for violating his purchase contract even though he may have had legitimate concerns of Twitter keeping secret its number of bot accounts. If you want to make the case that the ignorance of one party is sufficient to accuse the other of fraud, the burden of proof is on you.

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

#195

Post by modeless »

skc wrote: post #191
modeless wrote: post #13

Earlier quoted context omitted.

It's not confirmed to be illegal until they get a conviction. So we will find out! It will be an interesting case. I'd wager they do get convicted but we'll see.

Does the fact that he tried to flee have any bearing on this or can it plausibly be argued away is irrelevant?

Beats me, I'm no lawyer. But it seems plausible to me that his intention was to avoid or at least delay getting fired rather than intentionally fleeing law enforcement specifically.

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

#197

Post by perihelions »

est31 wrote: post #38

Note that they were charged for wire fraud and wire fraud conspiracy. So not for actual Section 10(b) violations, aka insider trading.

10b-5 is an SEC regulation, not a criminal statute. Administrative agencies don't have the power to define or prosecute crimes.

It's fair to characterize these criminal charges as "insider trading" (I assume; the DoJ press release describes them using that phrase).

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

#198

Post by duxup »

rmbyrro wrote: post #156
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?

> Are you telling me that fraudsters get caught on the blockchain more than other places? I'm sorry, but I did not say "more" and "other places" in my comment. What I said is what I wrote. My point is: blockchain is not anonymous. The hate bandwagon that says fraudsters have a safe heaven for doing whatever they want without a slight chance of being caught is just fantasy land...

> doing whatever they want without a slight chance of being caught

I’ve never heard it stated that way.

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

#199

Post by quadcore »

vishnugupta wrote: post #56

It talks volumes about the internal controls at CB that it took a tweet to expose this. Given the speed with which they grew last two years I expect their financial and security processes to be next to nothing. This is just tip of an iceberg. Insiders would have made tens of millions over last two years of bull run, if not more. This dude just got greedy and unlucky to get caught just as the crypto bubble began burst…

Given the speed with which they grew last two years I expect their financial and security processes to be next to nothing.

This is just tip of an iceberg.

Sounds like wild accusations to me. Id like to think the company executives have high integrity and maybe they caught others we havent heard of.

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

#200

Post by perihelions »

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…

There was an HN thread about that tweet, at the time that it was tweeted:

https://news.ycombinator.com/item?id=31012462 ("Insider Trading at Coinbase (twitter.com/cobie)") (3 months ago, 333 comments)

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