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Insider Trading at Coinbase

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Re: Insider Trading at Coinbase

#41

Post by tsimionescu »

logicchains wrote: post #16
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.

That's absurd. Insider trading makes markets more efficient as the information enters the market earlier, allowing them to reach the correct price sooner. There's no insider trading laws in commodities or real estate, have those markets collapsed?

> Insider trading makes markets more efficient as the information enters the market earlier, allowing them to reach the correct price sooner.

How exactly do you think this happens? If I know that a stock is about to rise significantly, I can just buy it at the current price all the way up to the day the information becomes public, and I will not have changed its price at all, but will profit massively off of my inside information.

The market will not reach the correct price until material information becomes public.

Re: Insider Trading at Coinbase

#42

Post by throwaway0a5e »

beaconstudios wrote: post #12
Drakim wrote: post #5

Earlier quoted context omitted.

In the world of cryptocurrency, even the wrist slap isn't a given. To me, cryptocurrency has been a very cool social experiment in what pure unregulated free market capitalism would work like in practice. Supposedly in place of regulations, companies would live on reputation and trustworthy business practices. If you use poisonous lead in your soup cans, people will stop buying your soup when word gets out, no need t…

The experiment wasn't even necessary - the Gilded Age was a libertarian's paradise with the gold standard and very little government regulation. What do we most associate with this era? Robber barons, utility monopolies screwing people over with ruthless business practices, confidence men and literal snake oil quack medicine. I genuinely can't think of a good (ie moral) reason to support the idea given how it is pred…

>What do we most associate with this era? Robber barons, utility monopolies screwing people over with ruthless business practices, confidence men and literal snake oil quack medicine.

Speak for yourself. Most well read people associate it with urbanization (made possible by industrialization of agriculture) and huge standard of living improvements that came with the long tail of industrialization. Such "luxuries" as off the shelf clothing, meat products, electric lights, etc. etc became readily available to the common man at a price he could afford at that time.

Re: Insider Trading at Coinbase

#43

Post by RhysU »

logicchains wrote: post #14
pearjuice wrote: post #2

Why wouldn't they? The risk of getting caught is virtually zero if you do it right and even if you get caught you get a slap on the wrist and a fine at best. It's just pathetic that for a company which so hard tries to legitimize crypto they have issues like this over and over again. The inherent nature of a "get rich quick" ecosystem where the incentives to pull all kinds of shady and illegal actions are too high an…

Economically speaking insider trading represents a net positive for the market as it brings information onto the market sooner, allows it to reach a better price sooner. The only people hurt by insider trading are those to whom the person doing insider trading has a fiduciary duty, which for a Coinbase employee would be Coinbase itself. Other markets like commodities and real estate have gotten along perfectly fine w…

> Economically speaking insider trading represents a net positive for the market as it brings information onto the market sooner...

However, insider trading erodes confidence in the market and therefore reduces the number of people contributing to and learning from pricing signals.

Trust is a big deal.

Re: Insider Trading at Coinbase

#44

Post by unnouinceput »

pingeroo wrote: post #35

Why is the SEC so slow to regulate cryptoassets? Literally everything that they combatted for stocks and traditional assets is now taking place in the crypto ecosystem.

Because SEC is something specific to US and crypto is international perhaps? I doubt SEC has anything to say in this regard when the trading happens to belong to a citizen of China, for example. And while I do know Coinbase is US firm, so is AMEX. Insider trading at AMEX in regard to foreign citizens isn't something they can do anything about it, can they?

Re: Insider Trading at Coinbase

#45

Post by tsimionescu »

logicchains wrote: post #18
banachtarski wrote: post #7

Earlier quoted context omitted.

This is a hilariously misinformed take, indicative of reading news in a bubble. The cryptosphere benefits when folks like you don your tin foil hats. You do realize the amount of scrutiny is far greater, affects all individuals above a certain pay grade at publicly traded companies, and that regulation continuously evolves? Protections against wash and insider trades are an important consumer protection but crypto ad…

Insider trading laws, to the extent they work, make the market less efficient because they delay the entry of information into the market. The majority of markets outside of equities, like real estate, don't have insider trading laws yet have managed perfectly fine.

The real estate market requires sellers to disclose property risks to potential sellers, which is an alternative to insider trading laws (one that would scale poorly to stock trading). Similarly, commodities are often sold under a warranty, with any hidden flaws being the responsibility of the seller - another solution to the problem of unequal information.

Re: Insider Trading at Coinbase

#46

Post by herendin »

beaconstudios wrote: post #20
elefanten wrote: post #15

Earlier quoted context omitted.

And you think this on what basis? Engagement with the space, or your emotional knee jerk reactions to the occasional headline you read? This comment comes across utterly unserious.

Based on both my observations of the space and interaction with crypto people and the crypto market. I know people who work in crypto too. Your defensive kneejerk reaction doesn't serve as an opposing argument - if you think differently, all you need to do is provide some evidence.

"That which can be asserted without evidence, can be dismissed without evidence." (Christopher Hitchens)

You made the assertion, you claim to have evidence: the onus is on you to provide that evidence, otherwise how can anyone possibly challenge it?

Re: Insider Trading at Coinbase

#47

Post by wdb »

unnouinceput wrote: post #44
pingeroo wrote: post #35

Why is the SEC so slow to regulate cryptoassets? Literally everything that they combatted for stocks and traditional assets is now taking place in the crypto ecosystem.

Because SEC is something specific to US and crypto is international perhaps? I doubt SEC has anything to say in this regard when the trading happens to belong to a citizen of China, for example. And while I do know Coinbase is US firm, so is AMEX. Insider trading at AMEX in regard to foreign citizens isn't something they can do anything about it, can they?

But wouldn't US laws apply when it is an American company or trade in the US?

Re: Insider Trading at Coinbase

#48

Post by beaconstudios »

willmw101 wrote: post #37
beaconstudios wrote: post #20

Earlier quoted context omitted.

Based on both my observations of the space and interaction with crypto people and the crypto market. I know people who work in crypto too. Your defensive kneejerk reaction doesn't serve as an opposing argument - if you think differently, all you need to do is provide some evidence.

I'm not sure either of your comments are productive here. You assert that it would be hard to find any crypto business that isn't 'rooted in some kind of scam'. But where's the evidence that coinbase for e.g is 'rooted in a scam, greater fool scheme or ponzi'? There are scammy activities in so much of crypto, but what is pointing to the most visible, normie-facing, publicly traded and regulated American crypto compan…

I did address this in a sibling comment - the exchanges are primarily used to buy and sell crypto to greater fools, and thus they are rooted in a greater fool scheme. The vast majority of use for crypto is speculation.

Re: Insider Trading at Coinbase

#49

Post by unnouinceput »

wdb wrote: post #47
unnouinceput wrote: post #44

Earlier quoted context omitted.

Because SEC is something specific to US and crypto is international perhaps? I doubt SEC has anything to say in this regard when the trading happens to belong to a citizen of China, for example. And while I do know Coinbase is US firm, so is AMEX. Insider trading at AMEX in regard to foreign citizens isn't something they can do anything about it, can they?

But wouldn't US laws apply when it is an American company or trade in the US?

Yes it does, hence why I gave both of them as examples above. Just take a look at AMEX history in regards to insider trading and foreign citizens, then tell me what SEC did in those cases. Coinbase is just the latest kid in the finance sector, with just a fraction of toys AMEX has palying with for decades already.

Let me put it this way. Coinbase is just a sliver of what money AMEX is trading and is used as dust in eyes to blind people at real insider trading that happens in real money makers, which are AMEX and the rest of well established banks. Good luck SEC doing anything about it.

Re: Insider Trading at Coinbase

#50

Post by beaconstudios »

carmen_sandiego wrote: post #36
beaconstudios wrote: post #33

Earlier quoted context omitted.

I don't think most exchanges are rooted in scams no - I'd say they're rooted in a greater fool scheme, given that the main purpose of buying crypto is to sell it for profit and it isn't really used for exchange outside a few niches like darknet markets.

Then I think you are assuming your premise/begging the question. You constructed the conditions in a way that leaves no room for a valid example. If you think crypto itself is a greater fool scheme then purely definitionally there can be no example of a non-greater-fool-rooted crypto business.

This is what I've observed, it's not a prima facie assumption. I was initially optimistic when bitcoin came about. Most of the industry seems to be based on speculation and selling "x but on the blockchain" solutions to nonexistent problems. I also know people who are trying to use blockchain tech to solve real problems, but they're in the minority.
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