Former Coinbase PM charged in cryptocurrency insider trading tipping scheme • Hacker News Board

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

#91

Post by rmbyrro » Thu, Jul 21, 2022, 4:41 PM UTC

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.

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

#92

Post by zerkten » Thu, Jul 21, 2022, 4:41 PM UTC

nus07 wrote: post #48

Curious about what would have happened had the protagonist managed to board the flight to India and get there ? Would the SEC and Coinbase been able to extradite or do anything then ?

The US and India have an extradition treaty (https://www.state.gov/wp-content/uploads/2019/02/12873-India...).

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

#93

Post by noughtme » Thu, Jul 21, 2022, 4:42 PM UTC

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…

US authorities often don't have enough evidence to prosecute for the underlying crime, or it may have low penalties, but they often have the evidence to prosecute for mail fraud or wire fraud(basically any means of electronic communication). Mail/wire fraud are federal offences, so this also involves federal prosecutors and agencies with more resources, surveillance abilities, and higher penalties.

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

#94

Post by projektfu » Thu, Jul 21, 2022, 4:42 PM UTC

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…

Fraud can be a state or federal crime, "wire fraud" usually means it is at the federal level because of its use of interstate electronic communications.

Mail fraud is similar. If you send someone a letter, you're using the US Mail system and thus are involving the federal level making it a federal crime. If you exclusively use a private interstate letter carrier (FedEx, for example), you are still committing mail fraud because the law was amended to cover that.

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

#95

Post by anewpersonality » Thu, Jul 21, 2022, 4:42 PM UTC

Ave wrote: post #85

biggc wrote: post #24

Didn’t a handful of Coinbase employees make out like bandits before Ethereum was listed? What’s changed since then?

You might be thinking of Charlie Lee? Charlie Lee joined Coinbase, wash traded Litecoin [1] to give the appearance of wider interest and volume in order to get Litecoin listed on Coinbase, and promptly dumped all his bags at the peak. [1] https://i.redd.it/u9vhbxvr63t71.jpg

Let's admit the true problem of crypto is allowing sociopathic nerds to act as if they will not face consequences.

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

#96

Post by rmbyrro » Thu, Jul 21, 2022, 4:42 PM UTC

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…

In layman's terms, wire fraud is committed when one uses a financial transfer in connection with or to defraud others.

Nowadays, it's very hard to commit financial fraud without also committing wire fraude.

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

#97

Post by nathanvanfleet » Thu, Jul 21, 2022, 4:43 PM UTC

bpodgursky wrote: post #7

Hmm. 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…

Love to see crypto people discover laws the hard way.

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

#98

Post by NineStarPoint » Thu, Jul 21, 2022, 4:43 PM UTC

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…

“Doesn’t really help me further, other than it just being ‘fraud’.” Shows a correct understanding of what wire fraud is. It’s an incredibly broad category, meaning basically any fraud that happens at distance that doesn’t involve a physics means of communication like mail.

In this case, because the trades were made via digital communications, it’s wire fraud. The reason you hear “wire fraud” so much is, as you might be able to guess, the vast majority of fraud these days takes place over the web.

In this case the indictment is “wire fraud in connection with a scheme to commit insider trading”. So it is both wire fraud and securities fraud. Generally speaking, the relevant information will be whatever specific fraud they are accused of committing over the wire, and not that it is the incredibly generic term wire fraud.

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

#99

Post by nathanaldensr » Thu, Jul 21, 2022, 4:43 PM UTC

lizardactivist wrote: post #19

There's been a lot of shakedowns and refurnishings in the crypto landscape lately. The US seems to catch or point fingers at people left and right. Why is this happening now all of a sudden?

Well, it has to happen at some point, right? Considering the fraud and scams are so blatant and obvious?

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

#100

Post by duxup » Thu, Jul 21, 2022, 4:44 PM UTC

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.

And yet the story is about a fraudster?