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Insider Trading at Coinbase

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Re: Insider Trading at Coinbase

#241

Post by Sohcahtoa82 »

onlyrealcuzzo wrote: post #218
crystaln wrote: post #207

Earlier quoted context omitted.

You’re conflating everyone in a massive group. Americans want abortion rights then they pass laws against abortion. Can’t make this up! Developers want open source then they make closed source products. Can’t make this up!

> Americans want abortion rights then they pass laws against abortion. Can’t make this up! Literally only 32% of Americans are completely pro-choice: https://news.gallup.com/poll/1576/abortion.aspx And, actually, most Americans support limitations on abortion. I'm not sure how you came to the idea that the vast majority of Americans are pro-choice.

Eh, I think half the problem is that I've met a lot of people who spout the "Pro-life is not anti-choice!" line. They're in favor of legal abortions, yet call themselves pro-life.

It gets muddy when you start to talk about wanting it "legal only under certain circumstances". How the people in that group identify is essentially a coin flip.

> And, actually, most Americans support limitations on abortion.

Yes. Like, I think it should only be legal during the first trimester. I still call myself pro-choice.

Re: Insider Trading at Coinbase

#242

Post by vmception »

flarex wrote: post #118

I think that the best way for Coinbase to combat this is to make as much information public as possible in as close to real time. For example they have a listings website - make every application public in real time. If there are meetings about which asset to add then make the meeting public or the minutes immediately after the meeting. The only way this can be exploited is because there was some lag time between ass…

it doesn't work that way. Coinbase's Asset Listing team contacts an inbox I'm on all the time just because an asset was indexed by their price tracker or Coinmarketcap once.

There is no reason for that to be made public, and no reason for an insider to find a liquidity pool on Uniswap to start buying that token.

Re: Insider Trading at Coinbase

#243

Post by bdcravens »

matheusmoreira wrote: post #238
parkingrift wrote: post #107

Crypto fans want deregulated finance. Crypto fans get mad when deregulated finance is comically unfair. You really can’t make this up. Embrace this. It’s exactly what crypto is all about.

"Crypto fans" never wanted centralized exchanges dominating the entire space. Cryptocurrency was invented to put an end to banks, not to create new unregulated pseudo-banks that are even worse than the previous system. You think we're not aware of the fact that exchanges have access to vast amounts of market information? They can literally bet against their own users on futures if they want. We want deregulation when…

Exchanges create the use case for virtually every transaction. Strict P2P is closer to the original vision, but the world of using crypto as a fiat proxy, the potential for profit, and the entire industry of mining equipment, etc, is made possible by the fiat-crypto bridge enabled by exchanges.

Re: Insider Trading at Coinbase

#244

Post by bdcravens »

berberous wrote: post #189
parkingrift wrote: post #107

Crypto fans want deregulated finance. Crypto fans get mad when deregulated finance is comically unfair. You really can’t make this up. Embrace this. It’s exactly what crypto is all about.

This is a strawman. It also paints “crypto fans”, as some monolithic group that all think the same way. I am a crypto fan and do not “want deregulated finance”. It is not “exactly what crypto is all about”. I think most in the space would actually like to see more sensible regulation.

Very true. The assignment of values to the "group" has been a problem since the beginning (for instance, anonymity wasn't even in the white-paper, but is a common perceived value of crypto)

Re: Insider Trading at Coinbase

#245

Post by renewiltord »

cuteboy19 wrote: post #234
renewiltord wrote: post #221

Earlier quoted context omitted.

I’d prefer Coinbase insider trading over Nancy Pelosi insider trading. So this isn’t the end of the world. There’s no universe where there’s no insider trading and you’re asking me to switch the Coinbase situation for the Pelosi situation. And I prefer the Coinbase situation. So I can accept the lesser of two evils and kick up a fuss when I don’t like it. After all, if switching to regulated finance is what you recom…

Coinbase would be frontrunning every trade you make. This would be a direct tangible loss to you. Think of it like a GME level fiasco but carried out every few weeks or so. Compared to that any insider trading Nancy does would be diffuse and unlikely to affect you personally.

This is a fair point. I don't trade on Coinbase, but this is what happens at other exchanges too. It is rational to prefer the Nancy-style situation over the Coinbase situation.

Re: Insider Trading at Coinbase

#246

Post by skybrian »

datadata wrote: post #224
skybrian wrote: post #165

Earlier quoted context omitted.

Could you be clearer about what you mean by transparency? Do you think private companies should make their financial statements public? Do they need to be audited?

I think trading on the basis of private information at the expense of other shareholders without the same information is the problem. I'm less concerned about the specifics of filing requirements, and more concerned about information asymmetry regardless of auditing/reporting obligations. I'm not sure I know enough to recommend a specific policy here, my original comment was just what I believe to be some of the flaw…

Okay, fair enough!

However, reporting requirements and auditing are all about making sure everyone has access to the same, accurate information about a company's financial situation. Insiders will learn about changes in a company's finances before outsiders. If they can disclose this to some investors but not others, or even disclose it to some investors first, then that increases information asymmetry.

But this doesn't seem to be something that crypto fans are interested in, because they're not really investing in companies?

Re: Insider Trading at Coinbase

#247

Post by im3w1l »

TruthIsHeresy wrote: post #124
ckastner wrote: post #120

Earlier quoted context omitted.

This is so on point. To me, and many others active somewhere on the "regulated finance" spectrum, the way crypto kept going on and on how awesome "deregulation" is from a consumer standpoint was tragically ironic. The vast majority of regulation is there to protect market participants.

>The vast majority of regulation is there to protect market participants. Anyone involved with GME knows this isn’t true.

I actually think the opposite. Causing a short squeeze is market manipulation. Regulatory agencies let it happen anyway because it was done by random nobodies.

Re: Insider Trading at Coinbase

#248

Post by matheusmoreira »

chaosbolt wrote: post #75

I think Coinbase does fractional banking, I don't have any proof so not completely sure but you can judge yourself, this happened a few months ago: - nuCypher just randomly started going up on Binance - the price was still low on coinbase - the normal thing to do was to withdraw from coinbase and sell on binance "Oops withdrawal of nucypher is temporarily locked", it stayed locked for 8 hours, all the crypto subs on…

They absolutely do that. Binance itself imposed limits on cryptocurrency withdrawals not too long ago. If people leave their money in the exchange, they'll lend it out to borrowers which means they're generating inflation. They even have savings accounts and everything.

Exchanges are banks. They have the exact same problems, only with less regulation.

Re: Insider Trading at Coinbase

#249

Post by novotionworepr »

cbg0 wrote: post #24
Drakim wrote: post #8

Earlier quoted context omitted.

Modern society would collapse if insider trading was legal. It would about as well as making bribery legal.

> It would about as well as making bribery legal. You mean like how lobbying is legal in the US?

Lobbying in the US is not the same as bribery. It's a system that has become corrupted, but corruption is not the system's main purpose.

Ostensibly, lobbyists exist to inform legislative staff about issues which they have no experience with, like an expert witness. You can't expect all ~550 legislators to have an in-depth understanding of every topic that they vote on.

The problem is that our legislative staffs started letting lobbyists come to them, instead of seeking out reliable impartial groups to work with. So when they need information about an upcoming vote, they end up soliciting advice from the wealthiest groups in those industries which the vote would impact.

It's an insidious form of regulatory capture. It might even be worse than bribery, because ordinary citizens cannot participate.

Re: Insider Trading at Coinbase

#250

Post by throwaway894345 »

nojs wrote: post #147
rchaud wrote: post #128

Earlier quoted context omitted.

A lot of the rah-rah boosterism of "decentralization" is coming from VCs that saw how much money there is to be made by ignoring laws and regulations for long enough. Airbnb and Uber are the most brazen examples of this. What's left unsaid of course is that the only interest deep-pocketed investors have in dismantling elements of the financial system (MC/Visa dominance, KYC/AML checks, suspicious transactions disclos…

I think this is the expected cycle of business long term. 1. Entrepreneur notices an opportunity to avoid overzealous regulations and provide better value to customers 2. Everyone wants a piece of the action, bad actors start to move in and updated regulation is required 3. New regulations get out of hand and start to become extremely costly to comply with (see banks) 4. New entrepreneur comes along with a novel way…

This isn't necessarily a bad thing. It's probably good to stop strangling the economy for a bit once bad actors disappear. Moreover, in many cases the regulators themselves are corrupt (e.g., regulators exempting lenders from regulation leading up to the 2008 housing crash), so the regulation may not be delivering the intended value and taking another swing at it in a decade may not be the worst thing. Further still, in a few cases, the regulation may actually not make sense any more due to some change in the landscape--it might be similarly good to back off the regulation, see what problems arise, and address them accordingly (i.e., control loop).
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