Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Former Coinbase PM charged in cryptocurrency insider trading tipping scheme

justice.gov

Post reply on HN
Print view View original

261–270 of 446 posts

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

#261

Post by superjan »

rmbyrro wrote: post #91
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…

> Ethereum blockchain wallet “that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published.” It talks volumes that had they done this in a privately held network, it might have been harder to catch them. All the "blockchain is anonymous, hence it's made by and for fraudsters" is a total nonsense.

The fraud is there not because it is anonymous, it’s there because crypto trade is not sufficiently regulated.

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

#262

Post by yieldcrv »

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.

Correct they are charged with Wire Fraud and Conspiracy to commit Wire fraud

They are not charged with securities violations, despite roping in the Securities Exchange Commission, because the government is not confident that it can bring a securities violation. They are not charged with any statute under commodities regulations or consumer product fraud either.

The government is using a new interpretation of wire fraud, because people really don't like that this action occurred and NFT's affected enough people.

So the wire fraud is a stretch but is the most reliable catch-all charge they have, absent any guidance from Congress.

I also think it is overly ambitious. DOJ did this a few months ago as well in another NFT case. In both cases they relied on the existence of a confidentiality agreement with the employer, to trigger the mapping of a financial action to a fraud statute.

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

#264

Post by joyfylbanana »

ChainOfFools wrote: post #107
pjc50 wrote: post #90

Earlier quoted context omitted.

A lot of people suspect there's ""official"" insider trading at the exchanges; there's no reason for the exchange not to front-run orders or fake the order book if they think they can get away with it. Or trade against heavily leveraged positions to liquidate them. Or prop-trade with the customers' money.

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.

Depends on how you use the exchanges. If you just buy and sell BTC and keep your coins off-exchange, there is little reason to care about whatever schemes the exchanges are doing. If you start playing with leverage, you will be putting much more trust at stake, and it is your individual decision to do that. I have been involved with BTC community for many years and most Bitcoiners I know do not trade back and forth, do not buy that much shitcoins and do not store their coins on exchanges, so these schemes do not affect them.

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

#265

Post by kepler1 »

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…

Also conducting fraud, if it ever touches a piece of US mail, opens up the channel to be investigated and prosecuted via the US Postal Inspection service. Which I have heard, they are no joke.

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

#267

Post by umeshunni »

kepler1 wrote: post #259
zionic wrote: post #76

Earlier quoted context omitted.

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 .

Yeah, maybe book a flight for 1 hour from now and hope they don't find out in time...

that wouldn't have given him time to pack 3 suitcases.

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

#268

Post by paulpauper »

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 .

There was no way they were going to let him leave the country, no matter when he booked the flight. booking the flight made it easier to arrest him. the meeting was set-up by the feds to arrest him there instead, but he thought that leaving the country would work, which it obv. didn't.

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

#270

Post by nullc »

pjc50 wrote: post #90
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…

A lot of people suspect there's ""official"" insider trading at the exchanges; there's no reason for the exchange not to front-run orders or fake the order book if they think they can get away with it. Or trade against heavily leveraged positions to liquidate them. Or prop-trade with the customers' money.

If you look at the details in this case it appears that the actual charges are for exploiting confidential company information for his own gain and not insider trading.
Post reply on HN