I'm surprised they were table to track the laundering, given it sounds like they used a lot of different wallets.
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
#22Earlier quoted context omitted.
Sure, but $7.5m is more money, and seems achievable. Dogecoin spiked 6% after its Coinbase listing announcement and Binance offers 50x leverage. And Coinbase listed 83 different things in 2021.
The bigger the amount the more likely someone will notice.
I doubt these guys were that afraid of law enforcement because nobody thought insider trading laws applied to crypto markets at the time. I guess they could be afraid that their source would get fired, but if you've already made 20x his salary then getting fired doesn't seem like a huge problem.
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#23One 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
As it turns out, a distributed immutable ledger is quite useful for investigators.
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#24Didn’t a handful of Coinbase employees make out like bandits before Ethereum was listed? What’s changed since then?
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#25Hmm. 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…
Your Warren Buffet example would absolutely be illegal.
Trading on the basis of material non-public price-sensitive information or tipping someone off so they trade is market abuse (ie illegal) in Europe. In the US, the rules are a little more complex but basically yes it is illegal (if that's what he did).
You absolutely don't have to have fiduciary responsibility, and you don't have to be an official insider, you simply have to trade on the basis of material non-public price-sensitive information in a product that's covered by the regulations or give that price-sensitive information to someone else in the form of a tip (with some expectation in the US of benefitting iirc).
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#26Didn’t a handful of Coinbase employees make out like bandits before Ethereum was listed? What’s changed since then?
Please explain!
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#27That is barely scratching the surface. I remember reports on reddit of people buying newly listed crypto assets in advance. That was in ~2016 and they didn't even try to hide.
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#28OMG gimme a break, isn't crypto itself a huge insider-trading sort of market?
Why is this such a big deal for Coinbase unless there are other intentions behind this arrest?
Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#29Re: Former Coinbase PM charged in cryptocurrency insider trading tipping scheme
#30I'm surprised they were table to track the laundering, given it sounds like they used a lot of different wallets.
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.