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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

#381

Post by dcolkitt »

lottin wrote: post #243
ETH_start wrote: post #190

Earlier quoted context omitted.

The top decentralized exchange, Uniswap, has overtaken the top centralized exhanges in liquidity depth for several major trading pairs: https://uniswap.org/blog/uniswap-v3-dominance So there is a world where centralized exchanges have far less relevance than they do today.

Is it me or "decentralised" almost always means "crippled"? The critical function that exchanges have is to allow people to buy and sell tokens. Decentralised exchanges can't do that. They only allow trading a token for another token.

But we have stablecoins, like USDC, to act as on-chain dollars. The point is in a world of very robust decentralized exchanges, it's easy to buy tokens with dollars (or vice versa), by sending dollars from your bank account to Circle, who will send USDC to your wallet, which will then buy the token of your choice from a decentralized exchange.

In this context Circle is still a centralized party that's necessary to interact with the off-chain banking world. But Circle has much less room for chicanery than a traditional centralized exchange. There's no opportunity to front-run, insider trade, liquidate your customers or anything else that OP brought up in the context of centralized exchanges, because all Circle is doing is filling the very simple task of converting 1.00 USD to 1.00 USDC and nothing else.

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

#382

Post by ETH_start »

SilasX wrote: post #380
ETH_start wrote: post #365

Earlier quoted context omitted.

>>Sure, but that role could be truncated to "convert between financial system currencies and stablecoins" Coinbase has already started doing that, by abolishing the distinction between the stablecoin, USDC, and its bank deposit USD. It's entirely plausible that other financial institutions, beyond commpanies like Coinbase which are heavily involvd in the cryptocurrency market, begin doing that as stablecoins gain wid…

Huh? I was talking about a world where they only concert between those assets. If coinbase is additionally doing that, then that’s not what I’m describing. And it’s it’s not even the service I was referring to (which requires that the asset classes be kept distinct). I swear, something about that comment just set people off, when it should be uncontroversial with the caveats I gave.

I was agreeing with you. I was citing an example of a financial institution providing that particular utility, to support the idea you presented, that it's plausible that one day financial institutions could be relegated to only providing that utility.

Your point was well supported, so I don't see the reason why it got downvoted.

>>which requires that the asset classes be kept distinct

Yes it's not exactly what you described, but functionally speaking, it is quite similar as it enables on-chain and off-chain fiat to be converted one for one.

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

#383

Post by askmike »

tmp_anon_22 wrote: post #36
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…

I wonder if the Tweet Account was fed info from someone in the accused's circle who didn't get their cut.

Coinbase shady stuff around listings has been an open secret in crypto, everyone knows about it. Dates all the way back to LTC listing and probably earlier.

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

#384

Post by dcolkitt »

nullc wrote: post #270
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.

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.

Misappropriating fiduciary information is literally the legal basis for insider trading. There's a common fallacy that insider trading is illegal because the government wants to enforce a "level playing field". Nothing could be further from the truth. Insider trading is illegal because as an employee of the company, you're profiting off your job in a way that doesn't share any of the profits with your employer. In other words the "victim" of insider trading is actually the company itself, not the poor schmuck who you dumped a losing trade on.

Many things that are colloquially thought of as insider trading, are not against the law. For example it's perfectly legal for a hedge fund to hire a helicopter to circle an oil refinery day and night with an infrared camera, so they can get a precise estimate of how much revenue an energy company will announce in its quarterly earnings. This is perfectly legal because at no point was any of this information "misappropriated" in violation of a fiduciary duty. Very clearly the little guy in this case has no chance of competing, and this isn't a level playing field in any sense. But the law simply does not care.

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

#385

Post by xeromal »

smsm42 wrote: post #283
acchow wrote: post #271

Earlier quoted context omitted.

So you should really drive to central america, I guess?

They probably have computers on the outgoing checkpoint too. Maybe walk across Rio Grande or something. Or just go to Florida and swim for a really long time.

I've driven through the Tijuana border into mexico about 10x and haven't been stopped once. Easy to do. Hard part is getting back in to the US.

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

#386

Post by oarabbus_ »

ta988 wrote: post #373
scottiebarnes wrote: post #363

Earlier quoted context omitted.

Question is how hard the Indian government would be willing to work to arrest and extradite him.

Depends what the US offers in exchange?

What would they offer to make it worthwhile? It's not like the US is holding Indian nationals in detainment whom the Indian Government would be willing to scour the country to find someone to exchange for release.

Perhaps they would for a violent criminal or terrorist, but it certainly seems unlikely for a relatively small-time white collar criminal. The fraud totaled $1.5M, this guy isn't exactly Bernie Madoff. Surely the US would not expect the Indian Government to spend multiple millions in operational and resource costs to locate, capture, and extradite a nonviolent criminal who made $1.5M illegally.

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

#387

Post by stingraycharles »

Spooky23 wrote: post #188
stingraycharles wrote: post #47

Earlier quoted context omitted.

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…

The problem is that separation of powers make most frauds a state matter. If you were ripped off in NY, a local county district attorney would prosecute you. The problem with that is state laws and capabilities are inconsistent. Even in New York, where there is a well established body of law for things like financial frauds, the local prosecutors make lack capability or venue. If you live in Lake Placid, NY and are s…

Oh, this makes sense: since mail and phone spans the whole nation instead of states, it becomes a federal matter?

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

#388

Post by sebmellen »

paulpauper wrote: post #371
subsaharancoder wrote: post #353

Earlier quoted context omitted.

India has an extradition treaty with the U.S. https://www.state.gov/wp-content/uploads/2019/02/12873-India... sooner or later he'd be back in an orange jump suit

india is a huge country. very easy to get lost, blend in

I’m not so sure that’s the case now under the new Aadhaar system.

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

#389

Post by thomasjudge »

1jbdg wrote: post #379
3np wrote: post #356

Earlier quoted context omitted.

According to SEC: https://www.investor.gov/introduction-investing/investing-ba... FBI: https://www.fbi.gov/news/stories/insider-trading Only talk about securities. It seems to me as if it would depend a lot on if the digital asset(s) in question count as securities or not.

Nope, insider trading is a type of fraud, they’ll be charged with wire fraud and the question on securities will never arise

The already have been as the DOJ press release states. Also the SEC is filing a civil case, as they do

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

#390

Post by thomasjudge »

maerF0x0 wrote: post #355

> (including interstate wire communications sent from ISHAN WAHI to a fellow Coinbase employee located in Manhattan, New York) This is an interesting side effect of our remote workplace culture. It used to be that if you committed a crime physically in the workplace, I presume it would not be an interstate crime. However, now you likely are required to work with people all over the place so the laws are all escalated…

I don't think interstate really matters to wire fraud charges
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