[HN Gopher] Insider Trading at Coinbase
___________________________________________________________________
Insider Trading at Coinbase
Author : Shadonototra
Score : 439 points
Date : 2022-04-13 08:48 UTC (14 hours ago)
(HTM) web link (twitter.com)
(TXT) w3m dump (twitter.com)
| pearjuice wrote:
| 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 and the repercussions are
| basically non-existent.
| logicchains wrote:
| 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 without any insider trading laws.
| notacoward wrote:
| > brings information onto the market sooner
|
| Nope. "Non-public information" is part of the _definition_ of
| insider trading FFS. Only the secondary information
| represented by the transaction itself becomes public. The
| counterparty gets what they think is a good price but turns
| out to be a bad one because of the hidden information. That
| 's a tangible loss to them, and any further trades they make
| while their putative and actual situations diverge will
| create more misleading market signals. This is such basic
| knowledge that it should be required for anyone trading
| anything riskier than an index fund or seeking a job in
| finance.
| lexapro wrote:
| Anyone that loses money they wouldn't have lost otherwise is
| hurt by insider trading. And if you make it legal, people
| will try anything to gain insider information.
| lvl102 wrote:
| None of this is true. Don't compare some shitcoin with
| nonexistent liquidity to real-world commodities.
| cuteboy19 wrote:
| There is no economic utility in this system to begin with.
| So even if this were true, they would be optimising a
| quantity that would eventually be multiplied by 0 anyways.
| tsimionescu wrote:
| > 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.
|
| No, economically speaking insider trading just hurts the
| market, as all free market models work only in so far as all
| actors have equal access to information. Unequal information
| makes the market less efficient. Hidden information that is
| not used in trades doesn't affect market efficiency, as all
| actors get a chance to decide a new price once the
| information becomes public.
|
| > 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.
|
| No, the people most hurt by insider trading are the cpunter-
| parties to those trades, who are acting on inferior
| information. It is a type of fraud - I'm acting as if the
| publicly known information is up to date, but in fact I know
| something the rest of the market doesn't about the value of
| the good I'm trading. It's like selling beans that have been
| publicly shown to be magical, while I happen to know the
| public show was staged and they are in fact normal beans.
| nybble41 wrote:
| > all free market models work only in so far as all actors
| have equal access to information.
|
| You need to investigate some better models. The useful ones
| don't assume equal access to information. Uniform access to
| information doesn't exist, and moreover distribution of
| information is one of the functions of the market.
| Information itself is a good which can only be acquired at
| a cost. Perfect information (not perfectly _equal_
| information) would indeed improve efficiency, but that
| doesn 't happen on its own. Unequal information is better
| for market efficiency than _less_ information; in a trade
| between A and B, both A and B knowing a relevant fact is
| ideal but only A or B knowing leads to better trades than
| _neither_ knowing, provided neither party is actively
| deceiving the other about the nature of the goods being
| exchanged.
|
| > It is a type of fraud - I'm acting as if the publicly
| known information is up to date, but in fact I know
| something the rest of the market doesn't about the value of
| the good I'm trading.
|
| "Acting as if" is not the same as making an actionable
| claim. You are under no obligation to advise anyone on
| future market conditions. It's only fraud if you make the
| trade under false pretenses which, unless you actually
| claimed to be making the trade based on only public
| information, is not happening here. The product being sold
| is exactly as described; whatever might happen in the
| future to affect its market value is out of scope.
|
| > It's like selling beans that have been publicly shown to
| be magical, while I happen to know the public show was
| staged and they are in fact normal beans.
|
| There's nothing wrong that so long as you're not
| misrepresenting your product as having some sort of magic
| properties (which would include being involved in that
| staged demonstration). There is no fraud here as long as
| _you_ do not claim that they are magical. What anyone else
| might claim about them and the motivations for buying them
| are not your concern. Your role is simply to provide the
| advertised product.
| RandomLensman wrote:
| > No, economically speaking insider trading just hurts the
| market
|
| I think that at least needs a qualification around what is
| meant by "hurt". If you were to look at the speed with
| which information might enter the market, insider trading
| restrictions might slow things down, for example. Not
| arguing for insider trading here, but the academic
| discussion - as I recall it - was/is a bit more nuanced.
| RhysU wrote:
| > 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.
| Drakim wrote:
| 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 to regulate, companies
| will self-regulate to stay profitable and relevant.
|
| Reputation and trust is probably the most important thing
| Coinbase can hoard, it's the one way a legitimate company that
| acts like an exchange and/or bank for cryptocurrency can use to
| rise above all the scams and dubious services that's going on
| in the cryptocurrency world. And yet here they are pissing it
| down the drain for easy short-term profits. Surprise surprise.
|
| The truth is, trust, reputation and even human lives are just
| input values in the big equation of profits. The free market
| will always optimize for the best option, even if that option
| is an overall net loss for humanity.
| beaconstudios wrote:
| 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 predicted to, and has been
| shown to, play out.
| logicchains wrote:
| >The experiment wasn't even necessary - the Gilded Age was
| a libertarian'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.
|
| The rate of economic growth and improvement in people's
| living standards was much higher back then than it is now.
|
| Similarly the average adult back then was much healthier
| than the average adult nowadays, who is likely overweight
| or obese with some chronic illness. In spite of the vast
| amount of pills modern people take. So healthcare hasn't
| necessarily improved much either.
| soco wrote:
| I don't know what the Gilded Age was (and too lazy to
| search) but, I quote "Over the past 160 years, life
| expectancy (from birth) in the United States has risen
| from 39.4 years in 1860, to 78.9 years in 2020"[1] so
| please do show some support for the affirmation "the
| average adult back then was much healthier". Unless you
| mean they all died healthy around 40 years of age - as
| in, they were totally healthy until 40 then the first
| illness killed them clean.
|
| [1]https://www.statista.com/statistics/1040079/life-
| expectancy-...
| tsimionescu wrote:
| While your point is absolutely true, note that life
| expectancy shouldn't be taken as the literal age most
| people die. It is the expected value of your age at
| death. Just like the expected value of a coin flip being
| heads is 0.5, but no coin is ever 0.5 heads.
|
| Life expectancy at birth in the times before modern
| medicine has always been dragged down significantly by
| the huge rate of infant mortality. It was more common for
| a family to have 1-2 dead small children in their past
| than not. People who lived past 5 or 10 or so would often
| live to see 70 or so, and 80 or 90 year olds were not
| unheard of.
| soco wrote:
| That's the nice thing about statistics, we will always
| have outliers to cherry pick. One can play with the graph
| at will, but also US men life expectancy at 5yo increased
| from 55 to 80 in the last 150 years: https://mappinghisto
| ry.uoregon.edu/english/US/US39-01.html. That's without
| infant mortality.
| [deleted]
| beaconstudios wrote:
| > The rate of economic growth and improvement in people's
| living standards was much higher back then than it is
| now.
|
| During the industrial revolution? I would expect so. At
| this point we're on the tail end of those improvements.
|
| > Similarly the average adult back then was much
| healthier than the average adult nowadays, who is likely
| overweight or obese with some chronic illness.
|
| Life expectancy has been going up for a long time, but on
| the obesity front the advent of highly sugary foods
| thanks to food giants is a result of profiteering, not
| regulation, and people driving everywhere instead of
| getting exercise is not because of regulation (though it
| is due to city planning).
|
| > So healthcare hasn't necessarily improved much either.
|
| Are you sincerely arguing that modern medicine isn't much
| of an improvement over snake oil medicine? The discovery
| of penicillin alone has saved literally billions* of
| lives, to say nothing of painkillers, modern surgical
| hygiene, pharmaceuticals, vaccines, just so so many
| improvements in healthcare. I can't take this argument
| seriously I'm afraid, I can only assume it's a post hoc
| rationalisation.
|
| * hundreds of millions, I misremembered the number.
| smackeyacky wrote:
| So we can ignore that cancer used to be a guaranteed
| death sentence, polio was a thing, children got rickets,
| a septic wound could kill you, an ulcer wasn't a course
| of pills to get rid of, tuberculosis was rife.
|
| The gilded age was no paradise and rose tinted views of
| the era just don't hold up to scrutiny.
| rabuse wrote:
| Most of this was eradicated by simple increases in
| hygienic ability, not some overpriced medical miracle.
| beaconstudios wrote:
| Polio was solved by vaccines, and sepsis was partly
| solved by hygiene and partly by antibiotics. Modern
| medicine has helped with many conditions.
| throwaway0a5e wrote:
| >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.
| beaconstudios wrote:
| Okay to clarify, I meant the excesses of the age. It was
| also a time of expansion driven by the inventions and
| discoveries of the industrial revolution and the
| discovery of oil. But when people make the argument that
| libertarian policy would lead to the market moderating
| companies' and entrepreneurs' worst instincts, I think
| the Gilded Age shows otherwise.
| danaos wrote:
| This is not new at all. I recall reading a post on reddit
| describing insider trading at coinbase years ago. That was back
| in 2016 when they added ETH. Apparently someone knew they would
| list ETH, days before it happened.I couldn't find the post, but
| this came to my attention:
| https://www.bbc.com/news/technology-42425857
| parkingrift wrote:
| 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.
| [deleted]
| agumonkey wrote:
| Trading (around crypto) made me realize that systems will
| always get twisted in all possible ways as long as some group
| can find a way to benefit. The finance world is filled with
| subsystems with different information sources and interest.
| This led to recurrent patterns and more subtle ideas. You
| cannot know this unless you are in these groups, or pay to be
| taught a few or wait years to discover it. It's always a blend
| of opposing forces of various nature. It's probably a very
| general principle (society works like that too)
| fourstar wrote:
| Coinbase is an SEC "compliant" company. What specifically about
| this company is "deregulated"?
| [deleted]
| FabHK wrote:
| There are SEC rules against insider trading, yet here appear
| to be instances of insider trading at Coinbase. So, either
| they don't apply to these transactions at Coinbase, and
| insofar this company is deregulated; or the company flouts
| the rules.
| cuteboy19 wrote:
| There are very few compliance rules to begin with for this
| space. I'd imagine that the compliance department at Coinbase
| is just a dead goldfish
| helloworld11 wrote:
| This is the kind of snarky, evasive answer that flippantly
| dismisses any counter argument and is so typical on this
| particular site when it comes to anything involving crypto.
| Never mind that the comment it replies to asked a perfeclty
| valid, serious question and mentioned exactly the heap of
| SEC regulations Coinbase is governed by. Absurd.
| berberous wrote:
| 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.
| FabHK wrote:
| I don't understand. If you have regulation, you need people
| that interpret and enforce that regulation. In other words,
| you need trust. If your system is predicated on trust, you
| can dispense with the blockchain that does a lot of
| unnecessary busy work, and replace it by a few guys with an
| Excel spreadsheet or two, and regulate them. The environment
| will thank you.
| berberous wrote:
| This is such a nonsensical argument. Crypto is a huge space
| with myriad benefits, which are not negated by having some
| elements regulated.
|
| For example, perhaps you are in favor of crypto because it
| is (i) harder for a state to seize or (ii) impossible for a
| single state to inflate. Those are in part possible because
| of the distributed decentralized nature of cryptocurrency.
| Being in favor of those two things does not mean you cannot
| also be in favor of regulating people that manipulate
| crypto market by wash trading, in favor of arresting
| thieves and hackers, in favor of banning insider trading,
| etc. You can have a system with trustless elements and that
| still relies on the laws and regulations to enforce certain
| aspects.
| FabHK wrote:
| So, you're saying, the government can arrest thieves and
| hackers, ban wash trading, ban insider trading (and,
| presumably, enforce that), but cannot ban or seize crypto
| itself?
| phatfish wrote:
| I think this is the "have cake and eat it" scenario.
| Crypto fans want a fresh supply of dumb money into the
| system to keep their line going up. But also want the
| more complex scams that might catch them out regulated
| away.
| bdcravens wrote:
| 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)
| esperent wrote:
| > It also paints "crypto fans", as some monolithic group that
| all think the same way.
|
| This is unfortunate. However, in my experience of crypto fans
| it seems like a large - probably very large - majority of
| them are fans of deregulation and consider this one of the
| main positive points of crypto. Would you say that's
| incorrect?
| vmception wrote:
| I would say what you think that means is incorrect.
|
| Even Cobie's tweet is absent any specific stance, and
| features a funny gif of Nancy Pelosi who is also a
| beneficiary of some really awesome trades.
|
| Many people are fine just watching addresses and filings
| and copying their trades. Now we know one address that
| loads up before Coinbase announces.
| izzydata wrote:
| I think "crypto people" are tired of things being a constant
| state of flux and just want governing bodies to make some
| kind of decisions. People really want to know what the rules
| are so they can make more informed decisions.
| nybble41 wrote:
| This is quite true. Many of the calls for regulation by
| "crypto people" which I've seen are really just a reaction
| against an uncertain regulatory environment. In short, they
| just want the regulators to make up their minds already.
| The biggest wildcard and source of volatility in the crypto
| space, IMHO, lies in the inconsistent and unpredictable
| responses we've seen from politicians and bureaucrats, not
| the tech, the state of the market, or the possibility of
| falling for some kind of scam.
|
| However, one should keep in mind that certainty is not
| necessarily _better_ --it depends on what the rules are.
| Operating in a grey area is better than being banned
| outright, and overly strict regulation can nullify all the
| advantages of a new system by forcing it into the mold of
| the old system it's meant to replace. The ideal outcome is
| that they explicitly adopt a hands-off approach so that the
| _threat_ of adverse regulation is removed without being
| replaced by _known_ adverse regulation in the present.
| bogota wrote:
| What does this even mean? I'm a crypto fan but I dont want to
| deregulate finance completely. So maybe i'm not a crypto fan.
| Or maybe the crypto fan online isn't really representative of
| reality like most online communities that are largely based off
| what reddit is spouting.
|
| Im not close to being alone on this. I don't know anyone in my
| life who is a "crypto fan" and doesn't think rules should exist
| around exchanges.
|
| It's easy to fight the boogeyman and the HN boogeyman is one of
| the silliest ones I have seen.
| Sohcahtoa82 wrote:
| Just like any other group of people, crypto fans are not a
| monolith.
|
| There certainly are some extreme libertarians that think
| nothing in the financial world should be illegal and that the
| Free Market(tm) will sort everything out on its own. To them,
| insider trading isn't unethical, quite the opposite. People
| should be using every advantage at their disposal. To them,
| getting a job at Coinbase to get the inside scoop on upcoming
| coin listings would be a genius move.
| nybble41 wrote:
| > To them, insider trading isn't unethical, quite the
| opposite.
|
| This does not follow. Even under the most "extreme
| libertarian" position insider trading, narrowly construed,
| would still be an unethical violation of the
| agent/principal relationship which exists between the
| employee and the company's owners (the shareholders).
| Abusing confidential information you have access to as a
| result of your position for personal gain at the expense of
| the shareholders would be violation of trust--and most
| likely a direct breach of your employment contract.
| loceng wrote:
| Indeed, it's just shifting a regulatory/systems capture
| situation to the wild west.
| celticninja wrote:
| Do they though? Are you certain these are the same people or
| are you just lumping them all together as crypto fans because
| it allows you to shit on then? Crypto fans aren't all the same,
| it's a bit like saying all HN users hate crypto. They dont,
| it's a crass generalisation used to score some useless internet
| points.
| ckastner wrote:
| 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.
| TruthIsHeresy wrote:
| >The vast majority of regulation is there to protect market
| participants.
|
| Anyone involved with GME knows this isn't true.
| im3w1l wrote:
| 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.
| reedjosh wrote:
| If a short squeeze happens that by definition means the
| shorts were over zealous.
|
| If a market allows shorts it should allow a squeeze as a
| mechanism of balance.
| jcranberry wrote:
| The market allows short squeezes. SEC too. What the SEC
| doesn't allow is the deliberate triggering of short
| squeezes.
| formerkrogemp wrote:
| I'll believe their not allowing it when their soft gums
| and limp regulations have teeth again. Fines are a cost
| of doing business in many cases, unfortunately.
| ckastner wrote:
| > _Anyone involved with GME knows this isn't true._
|
| People involved with GME used to refer themselves as the
| "Apes", and reading their main forum on /r/wallstreetbets
| back then, that would be a pretty accurate characterization
| of what they "know".
| kevingadd wrote:
| The vast majority of the nasty stuff that happened around
| GME was not the work of regulators trying to hurt ordinary
| investors.
| puppyprogram wrote:
| The vast majority of regulation is there to protect CERTAIN
| market participants.
| [deleted]
| matheusmoreira wrote:
| "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 it comes to our money. We want the
| ability to transact with absolute unconditional freedom and
| privacy. These exchanges? Hell yes, go ahead and regulate the
| crap out of them. They are not our friends. They're banks. The
| biggest failure of crypto is the need for exchanges. We were
| supposed to mine our own coins and use them in everyday
| transactions.
| bdcravens wrote:
| 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.
| thruway516 wrote:
| From my experience in cryptoverse, you and all the idealists
| who still think like this are in the minority, completely
| swamped by all the people who don't care which way it goes so
| long as they get filthy rich
| reedjosh wrote:
| Count me part of the minority then
| jl2718 wrote:
| I don't think it's a minority position, but we haven't
| figured out how to make it work yet.
| jl2718 wrote:
| There is a difference between 'unregulated' and 'poorly-
| regulated'. The more defensible position is that regulation
| never works as intended; it just benefits those that can hire
| the most lawyers, and state power is used against their weaker
| competitors.
| [deleted]
| TruthIsHeresy wrote:
| >Crypto fans get mad when deregulated finance is comically
| unfair.
|
| I'm curious as to where you've seen this sentiment from crypto
| fans? It seems most of the people getting angry about this are
| people who already disliked crypto and are using this event to
| add more fuel to the flames.
| ceejayoz wrote:
| > I'm curious as to where you've seen this sentiment from
| crypto fans?
|
| I mean, Ethereum itself forked over "hey that's no fair" when
| the DAO got compromised.
| TheColorYellow wrote:
| Are you saying the fork was a bad thing? Or are you
| critiquing crypto people for not living up to their values?
|
| For both points, I'd like to mention that there is no
| universal value set or profile.
| ceejayoz wrote:
| Neither; I'm answering the question about "where you've
| seen this sentiment from crypto fans", and this is a
| solid example of it.
| nybble41 wrote:
| That's not a general observation about all, or even most,
| "crypto fans" as the earlier comment implied but rather
| just part of the Ethereum community. And it _was_ still
| decentralized, as a majority of the users of Ethereum had
| to agree to the fork before it could take place. The DAO
| fork was a bad decision and set a poor precedent but it 's
| unlikely to be repeated--a fork in the chain at this point
| would have too much impact on too many other tokens to be a
| viable solution to a single buggy smart contract.
| parkingrift wrote:
| I doubt non crypto fans are doing investigatory research into
| Coinbase insider crypto purchases and complaining about it on
| Twitter, Reddit, and HN. Just a hunch.
| thepasswordis wrote:
| Do you think cobie is mad here? Or implying he wants more
| regulation?
| hanniabu wrote:
| Is that a joke? That group is always looking for things
| they can point to and say "see I told you crypto was bad".
| This is typical of any industry or topic to actively look
| for confirmation bias, it's just human nature.
| renewiltord wrote:
| 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 recommend, the cure is worse than the disease.
| cuteboy19 wrote:
| 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.
| renewiltord wrote:
| 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.
| nybble41 wrote:
| Frontrunning gets you a worse price for your trade, so
| traders would naturally avoid exchanges which practice it
| in favor of others which offer a deal. There is no natural
| monopoly on crypto exchange services, though regulation
| does tend to raise artificial barriers to entry and promote
| centralization.
|
| The "GME level fiasco" was only possible as a one-time
| event. You don't get situations like that on a recurring
| basis because the market adapts.
| cuteboy19 wrote:
| And yet Coinbase is one of the top exchanges in the world
| and routinely goes down for "unplanned maintenance"
| everytime a dip happens. Others are worse!
| datadata wrote:
| I think crypto fans want transparency and an equal playing
| field, and are more afraid of things like regulatory corruption
| and markets that are not open to them. It is not clear that
| "regulated finance" prevents comically unfair outcomes either.
| You still have insider trading that is legally protected,
| discriminatory rules like accredited investor qualifications,
| and abuse of the legal system by the rich to avoid regulations
| with loopholes or lobbying.
| skybrian wrote:
| Um, being an accredited investor gives you exposure to
| investments that aren't transparent. You don't get the same
| access to financial statements as with public companies.
|
| If you want more transparent investments then you should be
| advocating for reforms that will encourage companies to go
| public sooner. This would be reversing the trend in recent
| years where companies stay private longer, which allows them
| to not disclose how they're doing.
| TheColorYellow wrote:
| Equating public financial statements with "transparency" is
| a fallacy. It creates moral hazard and over-emphasizes
| private audit facilities.
|
| Is it objectively better than non-public financial
| statements? Maybe. Is it worth saying this alone should
| draw the line on what is considered a "safe" investment?
| No.
|
| Again, the OP is asking about access, not what you believe
| about "transparent investments"
| datadata wrote:
| Accredited investor rules was an example of not having a
| even playing field. The market is not open to everyone
| which contributes to unfair outcomes. I'd welcome reforms
| to transparency as well there, as lack of transparency also
| contributes to unfair outcomes (the company can exploit
| investors).
| jakelazaroff wrote:
| The accredited investor rules are in place to protect
| people who can't bear the losses from an extremely
| adversarial financial system. I promise you that even if
| you get rid of the rules, people with a few thousand
| dollars to spend still would not have access to the best
| investments.
| datadata wrote:
| I believe that every financial transaction has the
| potential to be adversarial, there are many ways outside
| of investing that the poor are disproportionately
| exploited (lotteries, debt interest). I think the
| libertarian perspective is that we shouldn't have
| protections that prevent people from making personal
| choices that result in harm to themselves, but only from
| harming others. I think that transparency for the
| companies seeking investment, or education of the
| investors themselves are better ways to restrict
| investment. Net worth/Income is not a fair criteria.
| kyleplum wrote:
| > I think the libertarian perspective is that we
| shouldn't have protections that prevent people from
| making personal choices that result in harm to
| themselves, but only from harming others.
|
| There are a few ways that someone bankrupting themselves
| via bad investments does hurt others:
|
| Dependents will be significantly harmed
|
| They are more likely to end up homeless or in jail on the
| dime of society
|
| They are less likely to be a productive member of
| society.
|
| I suppose the libertarian response would be that if
| someone bankrupts themselves, let them die homeless on
| the street - but I don't think you'll get agreement from
| any significant portion of society on that approach and
| even then someone has to pay to clean up their body.
| skybrian wrote:
| 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?
| datadata wrote:
| 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 flaws
| that 'crypto fans' see in traditional systems.
| skybrian wrote:
| 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?
| datadata wrote:
| I think if the investment story of companies was better,
| maybe there would be less demand for crypto in the first
| place? Another big appeal is that in crypto the rules
| (governing the crypto itself) are not changeable by
| humans. This eliminates a large category of manipulation
| by insiders (while opening the door to other problems).
| nybble41 wrote:
| As I see it, insider trading rules are less about
| "information asymmetry" and more about avoiding conflicts
| of interest between the decision-makers in a company and
| the investors they are supposed to be working for. It is
| a given that not everyone will have exactly the same
| information--combining all those separate viewpoints to
| arrive at a single market price is why the market exists.
| However, the insiders have a duty to their employers--the
| shareholders--and insider trading puts the insiders'
| personal profit at odds with the decisions which will
| best benefit the company. They weren't given access to
| that information and a position where they can guide the
| direction of the company for the purpose of enriching
| themselves at their principals' expense.
|
| The difference being: Under this interpretation insider
| trading is purely a dispute between the shareholders and
| their hired employees / agents. No one else has any
| standing.
| FabHK wrote:
| One could argue that companies ought to go public sooner,
| with the concomitant obligations and transparency on one
| hand, and the investment opportunities for unaccredited
| investors on the other. Rules with criteria such as
| revenue, employees, or something could achieve that.
| thwayunion wrote:
| _> Accredited investor rules was an example of not having
| a even playing field._
|
| 1. Having an income that qualifies you as an accredited
| investor doesn't mean that you will have access to higher
| quality investments.
|
| 2. Even if you don't qualify as an accredited investor,
| you probably still have access to the same set of
| investments that a capital-poor accredited investor has
| access to. As an accredited investor, I've never had
| access to an investment opportunity which I couldn't have
| also accessed without being an accredited investor. No
| one checks, and the "opportunities" are mostly not great
| anyways unless you have a lot of capital and connections.
|
| The operative things that unlock unfair investment
| opportunities are 1. one's professional network (or
| family), and 2. access to large amounts of capital.
|
| You can counter this assertion by providing a list of
| investments which are open to all accredited investors,
| do not require significant amounts of capital, and which
| have higher expected return with lower risk than
| investments that are available to non-accredited
| investors.
|
| The common misconception that becoming an accredited
| investor suddenly gives you access to high quality
| investments with super high returns for low risk is one
| of the best justifications I've ever seen for keeping the
| rule in place... which is particularly funny because I'm
| not even an avid fan of the accredited investor rule.
| datadata wrote:
| You are basically saying that accredited investor rules
| are not successful in excluding people from making
| certain types of more desirable investments, because
| there are other barriers that are in place anyway. I
| think this is true, but beside the point. If you want to
| have an even playing field for investing, every barrier
| is an obstacle.
| thwayunion wrote:
| _> I think this is true, but beside the point._
|
| I think you missed my point. To reiterate: the fact that
| people believe that it's not true is, ironically, a
| convincing justification for the accredited investor
| rule.
|
| I'm pointing out the irony, not defending the rule _per
| se_.
|
| _> If you want to have an even playing field for
| investing, every barrier is an obstacle._
|
| This clearly isn't true.
|
| First, it's sort of prime facie false. Investments
| usually happen in markets. Markets are human inventions
| comprised of collections of barriers on behavior and
| enforcement mechanisms for those barriers. (Investments
| that happen outside of markets do exist, but they usually
| involve violence and/or coercion under threat of
| violence, so probably not what you mean when you say
| investment.)
|
| Second, there are many ready examples. E.g., SEC filings
| and public exchanges are clear barriers to entry in fund
| raising, but also clearly level the playing field. The
| alternative is that the only way to know about a
| company's finances is to know the right people.
| datadata wrote:
| I agree that markets are not natural and don't happen
| magically without human oversight and rules. But
| generally we want those systems to increase participation
| in the market. The criteria of net worth as a obstacle to
| market participation seems pretty indefensible here. It
| is hard for someone to commit to changing their net worth
| in the same way that a company can decide to become
| public, or that a wealthy person can sign a contract
| saying they are aware of investment risk. I would support
| some rule like "you must have either this net worth or
| prove that you are knowledgeable about investment in some
| way". The criteria has to be something that people are
| able to overcome.
| thwayunion wrote:
| At the risk of sounding like an incredibly broken record:
|
| _> > I think you missed my point. To reiterate: the fact
| that people believe that it's not true is, ironically, a
| convincing justification for the accredited investor
| rule. I'm pointing out the irony, not defending the rule
| per se._
|
| and
|
| _> >> I'm not even an avid fan of the accredited
| investor rule. _
|
| So, as I've stated in every single post in this thread,
| I'm not defending the accredited investor rule. Cool?
|
| The justification for the accredited investor rule is
| "people are idiots". Again, not even that rich = less of
| an idiot. The premise of the rule is that rich people can
| afford to be bamboozled by scams and shitty
| investments... er, I mean, take on "higher risk
| investment opportunities".
|
| I find that justification uncompelling on face.
|
| But then people come along and complain "I can't use
| prosper.com to make unsecured personal loans to randos
| for an expected return of 5.7% per annum on loans with
| 15%-20% APY during a time when every other asset class
| out-performed and with the front end of that window
| overlapping with a time when unfathomably higher quality
| debt products were offering similar returns on 3 year
| timeframes". And just listening to them makes me second-
| guess myself.
|
| My point? It is ironic and humorous that the most
| compelling justification for the accredited investor rule
| is listening to people talk about how they would invest
| if the accredited investor rule didn't exist.
|
| For the record, since people keep completely losing the
| plot: I think something like an educational requirement
| makes a lot more sense.
| abduhl wrote:
| >> I would support some rule like "you must have either
| this net worth or prove that you are knowledgeable about
| investment in some way"
|
| This is the accredited investor rule. You qualify as an
| accredited investor through income, net worth, or having
| a current Series 7/65/82 license.
| mistrial9 wrote:
| neither you nor parent post are absolutely right, of
| course. In the USA in the 2000 era, a lot of people with
| the ability to place large betting stakes on the table,
| using access to market-makers and leveraged buys of all
| kinds, were able to push around a LOT of money, mostly
| profitable, for quite a while. The party ended, except it
| didn't. The same over-leveraged tactics by players with
| access, except this time against one of the most
| protected asset classes, homes, almost collapsed the
| entire system with their excess. There are tomes written
| about this now, fifteen years later. Its not clean, fair
| or balanced.
| tastyfreeze wrote:
| Prosper.com and similar lending platforms do not require
| a lot of capital but users are required to be accredited
| investors.
| thwayunion wrote:
| On the customer side, this website offers high APY
| personal loans (my credit card is literally a better
| deal). On the investor side, the _advertised_ rate of
| return is 5.7% between 2019 and 2022.
|
| 1. An effective return of 5.7% on unsecured loans with
| 15%-20% APY is... not a good deal. This signals either
| exceptionally high origination fees or extraordinary
| risk. Except it looks like you are investing in
| individual loans? So you don't even get this amortized
| 5.7%, but actually something that looks closer to "either
| 15% return or you lose your principal".
|
| 2. The rate of return is lower than every other broad
| asset class over that time period except for investment
| grade bonds, which weren't that far behind in 2019 and
| were probably a better deal given the enormous difference
| in risk profiles. Certainly high yield corporate debt was
| a way better deal on a risk-adjusted basis than given
| randos high-yield unsecured personal loans.
|
| 3. Most importantly, to my original point, you can get
| much higher quality exposure to high yield consumer debt
| via any brokerage account.
|
| This is sort of exactly what I mean. Most of the
| "opportunities" widely available to accredited investors
| are really shit deals.
| TacticalCoder wrote:
| > Prosper.com and similar lending platforms do not
| require a lot of capital but users are required to be
| accredited investors.
|
| Last I checked to be an accredited investor, in the EU at
| least, you had to have 1 million EUR available for
| investments. So an organism (like a bank), where you have
| that amount, will certify that you have it and then you
| can get labelled "accredited investor".
|
| As a sidenote I don't see it as proving you're savvy or
| anything: it's more like a club where they don't want
| "plebs" to pollute their members.
|
| The whole concept stinks.
| thwayunion wrote:
| In the US $200K income suffices.
|
| Also, if prosper.com is the "club", then it's a pretty
| shit club. VISA provides exposure to the high yield
| consumer credit market and had returns that were modestly
| higher than prosper over the same time frame. By which I
| mean ~100% appreciation over 3 years vs. 5.7% per annum.
| And the risk profile of the equity play might even be
| lower; we don't know, since the distribution of defaults
| is not published by prosper.
| fragmede wrote:
| These days there are a number of platforms like
| Globevestor that show the kind of deals available to
| accredited investors. They don't get you access to the
| same deals that you get by working Sequoia, but that's
| still better than what non-accredited investors get
| access to.
|
| (WeFunder, specifically, tries to skirt the accredited
| investor regulation and offers tiny (they advertise "as
| little as $100") investments to non-accredited investors.
| It's not clear to me how they're doing that legally other
| than handwaving "crowdfunding platform" around.)
|
| Accredited investor status _itself_ doesn 't give you
| access to higher quality investments, but it keeps the
| poors out from being able to angel invest in their
| professional network. If I'm not an accredited investor
| and I have $10k that I've saved up and want to plow into
| my kid's friend's uncle's big thing that they're working
| on? It might turn out that the uncle's a total scam
| artist or the next Elon Musk, but it's my $10k. I'm
| allowed to go to vegas and put it all on black if I
| wanted to, so why aren't I allowed to invest same as an
| accredited investor?
| jcranberry wrote:
| Accredited investing requirements are to keep non-experts
| or people without money to lose from being swindled by
| companies which aren't required to be transparent with
| their financials.
| TheColorYellow wrote:
| Public companies swindle quite often, and usually with
| more catastrophic results.
|
| When are we going to admit that the current rules are no
| longer working?
| FabHK wrote:
| So, given that companies swindle with catastrophic
| results, you're suggesting to have fewer rules and
| regulations? Less enforcement and oversight?
| Goronmon wrote:
| So then you agree that accredited investing requirements
| aren't the problem?
| rchaud wrote:
| 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 disclosure rules), is so they can replace it with
| a system that they personally have an equity stake in.
| nojs wrote:
| 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 of avoiding
| said regulations, providing better value to customers again.
| Repeat.
|
| At any given point in time the industry is either in cowboy
| crypto mode, or crusty overregulated bank mode. Both have
| drawbacks, and it's just a pendulum that swings back and
| forth.
| throwaway894345 wrote:
| 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).
| toomuchtodo wrote:
| "Overzealous regulation" = regulation they prevents me as
| an "entrepreneur" from profiting off of unsophisticated
| people, in this example.
| qeternity wrote:
| Who determines what qualifies as "unsophisticated". This
| is where the overzealousness creeps in. Regulators always
| push for more regulations.
| toomuchtodo wrote:
| Regulators discover and patch regulatory gaps. One might
| say that's doing their job, versus overzealousness.
| Jorge1o1 wrote:
| So a "poor" but highly knowledgeable financial planner
| making "only" $180k a year can't invest in their friend's
| startup because the regulators deem it too risky. But
| some random dentist can?
|
| https://www.bloomberg.com/opinion/articles/2018-09-24/ear
| nin...
| FabHK wrote:
| There are financial criteria, or professional criteria to
| reach accredited investor status. In particular, any
| investment professional that has passed the Series 7 exam
| (or a few others) is an accredited investor.
|
| That regulation seems sensible to me, and not
| overzealous.
|
| https://www.sec.gov/education/capitalraising/building-
| blocks...
| toomuchtodo wrote:
| The dentist can weather the poor investment. Knowledge
| does not make you financially solvent. It just improves
| your gambling odds as it relates to equity investment.
| BitwiseFool wrote:
| From my perspective, only letting people who are well off
| enough to 'weather the loss' seems like something that
| only exacerbates the wealth gap.
| notahacker wrote:
| The wealth gap isn't going to _shrink_ by making it easy
| for startups (or "startups") that can't convince rich
| strangers (or friends and family, or crowdfunding
| platforms) they're worth investing in to convince larger
| numbers of less rich strangers to do it instead.
|
| Most companies funded by professionals go bust and the
| risk adjusted returns to VC as an asset class aren't that
| great: the funds that have spectacular returns being
| balanced out by those that lose their LPs money. And few
| unicorns are going to be spending their effort pitching
| average earners for $2k cheques. Why would we expect the
| average joe to invest better than the pros with less
| capital to diversify, no board seats and substantially
| worse dealflow?
| formerkrogemp wrote:
| You're not going to find a welcoming crowd here
| criticizing startups on Y-Combinator news, a site written
| by Paul Graham and a site catering to a startup
| accelator's usual audience.
| toomuchtodo wrote:
| Super off topic, but the wealth gap is exacerbated by not
| taxing the wealthiest at a high enough rate, not
| regulations against capital market participation in
| highly speculative ventures. To argue that accredited
| investor regulations are the problem is no different than
| arguing for lottery tickets or penny stocks as an
| investment strategy for low income citizens.
| mschuster91 wrote:
| Lotteries are super regulated though, it's (no matter the
| country) an utter nightmare, even stuff like a school's
| trinket raffle. The reason is a _shitload_ of people
| making "easy profits" by frauding people.
| [deleted]
| drekk wrote:
| I work in fintech. I'm not sure what bank regulations you
| think are overzealous. To give an example, banks can
| legally keep you from accessing your data. Whether by
| blocking your screen scraping or providing an API with
| poor coverage.
|
| You understand I imagine that the regulations don't use
| the word "unsophisticated" and as such it's a red
| herring. We have these (few) regulations because banks
| and their consumers are not entering into a business
| arrangement on similar footing. I'm not "too big to
| fail". I don't get a bailout.
|
| Banks love to collude with one another or engage in
| predatory behavior, and when we repealed the Glass-
| Steagall act in 1999 it took less than a decade for the
| subprime mortgage crisis to rear its ugly head. Allowing
| banks to also act as securities firms will continue to
| show us these "once in a lifetime" economic recessions
| every decade or so. And would you look at that? It's been
| over a decade since the subprime mortgage crisis, yet
| here we are back in the same glut.
|
| Crypto doesn't solve any of that. It solved double
| spending. Most of the "exchanges" that people are using
| are mixing banking and securities, and when crypto blows
| out there is nothing left to catch most of the retail
| investors that shoulder that cost. There already are so
| many examples that listing them is prohibitive, but I'll
| remind everyone that Mt Gox handled 70% of all Bitcoin
| transactions at the time and lost 6% of the entire
| Bitcoin circulation at the time to hacks. No FDIC
| insurance, do not pass go, do not collect $200. Laissez
| faire becomes laissez tomber.
|
| I wish people were honest about why they like crypto --
| it's a speculative asset in a time when most people can't
| afford appreciating assets, and it doesn't require an ID
| if you avoid exchanges so you can buy contraband. The
| drawbacks are someone can code a button that is difficult
| to inspect and if you press it your entire wallet is
| drained with no recourse. Haven't even touched on the
| energy or silicon expenditures for a system with
| laughably tiny adoption
| datadata wrote:
| Could you share a citation for your claim of "laughably
| tiny adoption"? What data are you looking at to reach
| this perspective?
| qeternity wrote:
| You're missing the point entirely. It's not as if the
| regulatory landscape is only decided by regulators. The
| fact that we have balance in regulations is because other
| people push back on regulators (legislators, lobbyists,
| etc). This is a good balancing act, that should result in
| reasonably optimal regulations.
|
| But it doesn't mean the moral hazard doesn't exist.
| thwayunion wrote:
| I cannot think of a single previous business cycle that was
| driven by this dynamic. Can you give some historical
| examples? This strategy seems unique to the most recent
| generation of capitalists (sharing economy, crypto stuff,
| etc).
| VHRanger wrote:
| The 2008 bubble was largely driven by the deregulation of
| financial instruments (and non-regulation of new
| instruments) in the late 1990 and early 2000.
| reedjosh wrote:
| It was also driven by easy fed dollars and banks that
| knew they'd be bailed out.
| VHRanger wrote:
| Banks didn't expect to be bailed out. That question has
| been studied
|
| Bank upper management just didn't care that they'd be
| bailed out or not because their incentives were on fairly
| short term horizons.
| rchaud wrote:
| Lehman Brothers didn't know, Barclay's acquired them for
| pennies. Same with Bear Sterns (JP Morgan acquired) and
| Merrill Lynch (BofA acquired).
|
| Also quantitative easing began as a result of the massive
| loss of trust between banks as a result of the crisis.
| Every central bank in countries with big financial
| centers had to follow a similar playbook.
| yrral wrote:
| The concept of visa/mastercard was also largely unregulated
| at the time they launched. Take a look at the history of visa
| article on wikipeida
| https://en.wikipedia.org/wiki/Visa_Inc.#History
|
| Visa was not the first, and other tries to do a credit/charge
| before them were much worse or limited in scope. This is
| similar today to what is happening in web3/crypto. If you
| don't think the ingenuity of humans will get us somewhere
| productive with these technologies, then I don't know what to
| say to you.
|
| Quotes from the article about the launch of visa:
|
| > In the weeks leading up to the launch of BankAmericard,
| BofA had saturated Fresno mailboxes with an initial mass
| mailing (or "drop", as they came to be called) of 65,000
| unsolicited credit cards
|
| > By March 1959, drops began in San Francisco and Sacramento;
| by June, BofA was dropping cards in Los Angeles; by October,
| the entire state of California had been saturated with over 2
| million credit cards and BankAmericard was being accepted by
| 20,000 merchants.[18] However, the program was riddled with
| problems, as Williams (who had never worked in a bank's loan
| department) had been too earnest and trusting in his belief
| in the basic goodness of the bank's customers, and he
| resigned in December 1959. Twenty-two percent of accounts
| were delinquent, not the 4% expected, and police departments
| around the state were confronted by numerous incidents of the
| brand new crime of credit card fraud.[19] Both politicians
| and journalists joined the general uproar against Bank of
| America and its newfangled credit card, especially when it
| was pointed out that the cardholder agreement held customers
| liable for all charges, even those resulting from fraud.
| thinkmassive wrote:
| The Cold Start Problem, by Andrew Chen, devotes a chapter
| to this as a case study. I don't recall it covering these
| negative aspects, which are obviously important to
| consider. Still a great book for startup growth ideas
| though.
| objclxt wrote:
| > This is similar today to what is happening in
| web3/crypto. If you don't think the ingenuity of humans
| will get us somewhere productive with these technologies,
| then I don't know what to say to you.
|
| They won't, because they achieve nothing that can't already
| be accomplished with proven technologies. Axie Infinity
| could easily be built using regular plain old databases,
| but they built in on the blockchain using a terrible bridge
| architecture and as a result had $600 million stole. Such
| innovation.
| reedjosh wrote:
| What can't be achieved otherwise is digitally
| transferrable value without government intervention.
| earthboundkid wrote:
| "As all tech industry observers are aware, the twin pillars
| of a successful startup are cost shifting (i.e. user
| generated labor) and regulatory arbitrage (i.e. tax
| avoidance)."
| datadata wrote:
| > they can replace it with a system that they personally have
| an equity stake in.
|
| Isn't this a fact about capitalism and not at all specific to
| the financial sector?
| tootie wrote:
| It's true. AirBnB and Uber/Lyft exist almost entirely as
| tools to weaponize regulatory loopholes. True of a lot of
| analytics tools as well.
| crystaln wrote:
| 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!
| onlyrealcuzzo wrote:
| > 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.
| thwayunion wrote:
| I think the post you're responding to is correct according
| to the survey you shared.
|
| First, a quick note. The gallup poll posted by
| onlyrealcuzzo seems ripe for "lying with statistics" on
| either side of the issue. For example, we could say "only
| 32% of people are totally pro-choice" but could also say
| "open 19% of people are totally pro-life". We could say
| "60% of people support Roe vs Wade" or we could say "most
| Americans do not support third trimester abortions without
| special reason".
|
| Interpreting the poll with respect to a specific claim
| therefore requires care.
|
| As a reminder, GP stated:
|
| >> Americans want abortion rights then they pass laws
| against abortion.
|
| First, do Americans want abortion rights?
|
| The only question on the poll that directly asks about
| "rights" is the question about Roe v Wade, and nearly 60%
| of respondents do not want Roe-Wade overturned.
|
| Second, do Americans oppose laws being passed against
| abortion?
|
| Only 22% of respondents are dissatisfied with current laws
| and also want stricter abortion laws. More importantly,
| GP's characterization is STARKLY true if we look at how
| laws have changed recently. E.g., the new Oklahoma and
| Idaho laws ban abortion in cases of rape/incest. The gallup
| poll indicates that a whopping 83% of Americans support
| support first trimester abortions in cases of rape/incest,
| and that number is still over 50% in the third trimester.
| This is a clear and unambiguous case of GP being correct
| according to onlyrealcuzzo's source.
|
| I think it takes a lot of mental gymnastics to interpret
| the gallup poll as stating that Americans don't oppose the
| types of abortion laws being passed now, sometimes in
| strikingly huge majorities.
| gcthomas wrote:
| Your link shows 81% in favour of abortion, with or without
| some restrictions, with 19% against abortion. Wanting
| abortion rights is not synonymous with being pro-choice,
| which carries implications of no restrictions at all.
| dlp211 wrote:
| I hope I didn't misunderstand what you wrote, but where
| did you get the idea that being pro-choice means the
| ability to get an abortion from 0 months to 9 months
| pregnant?
|
| There is obviously a spectrum to being pro-choice, but if
| I had to bet I'd put the majority of pro-choice folks
| follow: that woman has the right to choose to have an
| abortion while the fetus is generally considered pre-
| viability by the medical profession and under extreme
| circumstances where the life of the mother is at risk
| and/or the baby is now non-viable or will suffer a short
| and traumatic life.
| gcthomas wrote:
| Thanks, it seems that I have been interpreting the term
| pro-choice incorrectly.
| Sohcahtoa82 wrote:
| 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.
| asdffdsa wrote:
| The whole point of crypto is that it was a form of currency
| that's unregulated, so a more accurate comparison would be
| "open source advocates complain when other people use their
| code without their knowledge. Can't make this up!"
| bobsomers wrote:
| > Crypto fans want deregulated finance. Crypto fans get mad
| when deregulated finance is comically unfair.
|
| I don't think this is a fair characterization. Most crypto fans
| I know want regulations, they just want them clearly defined
| and enforced with software and distributed consensus rather
| than through corrupt and ineffective organizations like the
| SEC.
| nipponese wrote:
| I think us zealots have been clear on this from the start:
| centralized, custodial exchanges are not crypto. Please come
| down on them HARD.
| [deleted]
| joshsyn wrote:
| Umm, I am a crypto fan and I still don't want regulation. You
| have to be an idiot to buy something on listing. Embrace this.
| Tenoke wrote:
| 'At Coinbase' isn't in the tweet and it implies this was done by
| Coinbase emoloyees while it's possible that e.g. someone involved
| with the project itself did it.
| axg11 wrote:
| Why is everyone discounting the possibility that this is a
| Coinbase controlled account? They would surely need to purchase
| the tokens before they list them.
| hmate9 wrote:
| No they don't. You trade with other users not coinbase directly
| dahfizz wrote:
| Do you have evidence that Coinbase doesn't provide liquidity
| for it's tokens? It's a pretty safe assumption.
| ricardolopes wrote:
| That's not how coinbase operates. You have a "Buy <Coin>"
| button, and you expect to get that coin without fail, every
| time. If a new token launches, you should be able to buy it
| without waiting for users to deposit and sell. Maybe you're
| confusing with coinbase pro, which uses the more traditional
| order book model, or with other exchanges?
| wc- wrote:
| Coinbase adds new assets to the pro option first,
| establishes a market, and then adds to the retail Coinbase
| "buy button" app. When a user hits the retail Buy Coin
| button, the internal market maker fills the order against
| the coinbase pro's order books.
| vmception wrote:
| crypto exchanges are all over the place regarding this
|
| its not pretty
| aqme28 wrote:
| Coinbase almost definitely acts as a market maker as well. I
| would be very surprised if they didn't at least seed the
| order book a little before listing new pairs.
| Tenoke wrote:
| Further, Coinbase often lists some new assets on Coinbase
| earn where it gives them for free to users.
| scld wrote:
| The definitely do act as a market maker. This is probably
| just them getting some liquidity before listing. With Mina
| they literally announced such a thing. https://twitter.com/
| CoinbaseAssets/status/150671712249959629...
| msoad wrote:
| It's more like someone _inside_ Coinbase owning this wallet.
| giarc wrote:
| $26-80k in coins doesn't seem like much?
| axg11 wrote:
| Could be sufficient for (limited) market making. There are
| dozens of explanations for why Coinbase would want to hold
| these coins. They're not just an exchange anymore, they offer
| many other services.
| [deleted]
| Steele69 wrote:
| jiveturkey wrote:
| I would attribute this to either a hacker, or malicious insider,
| with access to the announcements before they go public. Not
| official coinbase behavior. It's way way too obvious for coinbase
| to be doing this, and if they were why would it be in such small
| amounts. Twitter is great for getting the pitchforks out.
|
| Remember when the news wire was pwned? Someone was selling that
| news to various investment banks, who would trade on it. I smell
| a similar thing here.
|
| If coinbase were doing this themselves, would it be illegal? I'm
| not an expert but I don't think so. Still, it's a _very_ bad look
| and it strains credulity.
|
| It could also be dumb luck. The same way people look at
| successful startups and think that is normal. I'd want to see a
| deeper analysis before judging.
| OnuRC wrote:
| related https://news.ycombinator.com/item?id=30797879
| TheColorYellow wrote:
| Most people on HN here don't have a clue of what they are talking
| about, whether it is financial market regulation or
| cryptocurrency or blockchain technology.
|
| What makes this topic difficult to approach is the degree of
| complex issues which surrounds it. We are looking at the
| intersection of technology innovation, the long-standing failure
| of institutional and market mechanisms, and combined with a bleak
| macroeconomic context.
|
| Most people here should take a good reminder that they actually
| aren't experts in everything.
| thomassmith65 wrote:
| This community has been discussing crypto since 2009 (four
| months after 'Satoshi' mined the genesis block)
| https://news.ycombinator.com/item?id=599852
|
| It may still be true that "most people" here don't have a clue
| about it, but it's a hollow criticism since _far more_ have a
| clue here than elsewhere.
| dropnerd wrote:
| you can be epicly early and epicly wrong. in that very
| thread:
|
| > Well this is an exceptionally cute idea, but there is
| absolutely no way that anyone is going to have any faith in
| this currency.
| thomassmith65 wrote:
| I checked the history of the user who left that comment; it
| shows recent posts about crypto, too. That's thirteen years
| of following the subject.
|
| The claim in the parent post, roughly, is that the HN
| community is clueless about crypto and economics. In
| reality, HN had a large hand in popularizing crypto, and
| criticism here often is based on experience rather than
| ignorance.
| flarex wrote:
| 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 assets that were considered to be
| listed and the actual announcement.
|
| It doesn't help that they have employed some highly unethical
| actors in the past and completely failed to do their due
| diligence. For example when they employed people that were
| involved in selling hacking tools to nation states that were used
| in human rights abuses.
| vmception wrote:
| 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.
| chaosbolt wrote:
| 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 reddit were screaming
| about it etc... a normal shitshow.
|
| No explanation whatsoever was given, the only one that makes
| sense to me is that they do fractional reserve like everyone
| else, since there is no way everyone is going to withdraw at the
| same time right? in the 2021 bullrun coinbase received a lot of
| non technical people who are ok with keeping their funds on their
| website, so I guess they figured out they could just imitate the
| banks and start lending the funds people keep there and have you
| trade imaginary tokens you can't withdraw if you see a better
| opportunity.
| loceng wrote:
| Coinbase regularly "goes down" or at least large amounts of
| users unable to login whenever there seems to be a "bank run" -
| which conveniently will help reduce the downward pressure on
| the price plummeting, so whatever billion dollar buffers or
| reserves waiting to buy during large selloffs they have - to
| also counter a total crash - would have pressure reduced on
| them as well; it might be a very short period of time that a
| user might need to be blocked out from selling in order to stop
| "hysteria" or panic selling.
| datadata wrote:
| Interestingly, trading for regular stocks on US exchanges is
| halted for many reasons including when the price moves too
| fast, a 10% move in 5 minutes automatically gives a 5 minute
| halt.
| https://www.nasdaqtrader.com/Trader.aspx?id=tradehaltcodes
| throw10920 wrote:
| Yeah, the conventional financial markets are rigged,
| despite (or because?) of layers of regulation and
| "oversight" - the Robinhood-GME incident and
| banks/individuals that contributed to the 2008 crash
| getting off scott-free should have been enough to convince
| most individuals of this.
| seabird wrote:
| 2008 crash is a decent example of finance being rigged.
| Robinhood's handling of GameStop is not. They may be a
| pretty shit brokerage, but DTCC collateral requirements
| hit _everybody_ , and they just didn't have enough money
| lying around to deal with that in the way a lot of
| customers would have wanted.
| [deleted]
| MegaButts wrote:
| So you agree the DTCC doesn't know how to manage their
| collateral requirements? It's one of their primary
| reasons for existing. It seems like something they
| should've been able to foresee or handle, rather than
| force brokerages into PCO when they already lost control
| of the situation.
|
| It's really akin to the LME trade halt fiasco, which then
| became even worse when they retroactively reversed
| trades. The point is, when they're about to lose money
| they'll change the rules of the game. If you don't
| recognize that then you're the sucker at the table.
| once_inc wrote:
| Jan 3rd is Proof-of-Reserves day, and all of the larger actors
| have ignored it for far too long. I believe Kraken has
| committed to it now, which is great.
|
| Also: obligatory "not your keys, not your coins" and "don't
| keep your coins on an exchange".
| kranke155 wrote:
| Kraken is the least shitty of the actors in the space.
| i67vw3 wrote:
| True, probably due to the founder being one of the OG
| crytpocurrency individual.
| vimy wrote:
| > Also: obligatory "not your keys, not your coins" and "don't
| keep your coins on an exchange".
|
| Unless lobbying can still stop it the EU parlement will
| outlaw self hosted wallets. Only coins on exchanges will be
| allowed.
| lxgr wrote:
| > EU parlement will outlaw self hosted wallets
|
| Isn't it self-hosted _anonymous_ wallets?
| vimy wrote:
| Yes but it's gonna unworkable in practice to verify your
| own wallets. It's a de facto ban.
| nybble41 wrote:
| It's hardly "unworkable". There are already systems in
| place for verifying your own wallets; you just need to
| sign a message using your key to verify that the wallet
| is actually yours.
|
| So far I haven't seen any proposed rules about what you
| can do with the crypto once it's in your wallet, so all
| this means is that you need to withdraw to your own
| wallet _first_ before sending the funds anywhere you
| want.
| vimy wrote:
| So how does it work? Where do I link my national ID to my
| wallet and how do I tell the government about it?
| nybble41 wrote:
| The national ID link happens at the exchange, via the
| normal KYC process. You prove your identity to the
| exchange, and you prove that you have the private key for
| the wallet by signing a challenge message. That's it. The
| relevant proposed regulations can be found here[0]
| (linked from [1]):
|
| _> (29) This Regulation applies not only to transfers of
| crypto-assets where both the crypto-asset service
| provider of the originator and beneficiary are involved
| but also to transfers of crypto-assets to or from a
| distributed ledger address not linked to a crypto-asset
| service provider, so called "unhosted wallets", as long
| as there is at least one crypto-asset service provider
| involved in the transfer of crypto-assets._
|
| _> (29a) In cases of a transfer of crypto-assets made
| from or to a distributed ledger address not linked to a
| crypto-asset service provider, the crypto-asset service
| provider will have to obtain information both on the
| originator and the beneficiary, usually from their
| customer. However, the crypto-asset service provider will
| have to verify the accuracy of only the information on
| their customer and not on the originator or beneficiary
| with the distributed ledger address not linked to a
| crypto-asset service provider._
|
| So when a transfer is made to or from an external, non-
| hosted wallet the _exchange_ is responsible for
| identifying the wallet 's owner.
|
| Also note this clause in the proposed text of the
| regulation (under Article 2 paragraph 4):
|
| _> This Regulation shall not apply to person-to-person
| transfer of crypto-assets as defined in Article 3(14) of
| this Regulation._
|
| So transfers between two unhosted wallets are unaffected.
|
| This regulation has been widely misreported, so don't
| believe everything you read, especially if it doesn't
| cite the actual text of the regulation.
|
| [0] https://data.consilium.europa.eu/doc/document/ST-1425
| 9-2021-...
|
| [1] https://www.consilium.europa.eu/en/press/press-
| releases/2021...
| nybble41 wrote:
| > Isn't it self-hosted anonymous wallets?
|
| Yes, and the proposed restrictions only apply to
| transactions which directly involve an exchange. You can
| still have an anonymous self-hosted wallet, you just
| can't withdraw to it directly; you have to move the funds
| to a verified wallet address first.
| [deleted]
| rsync wrote:
| "Unless lobbying can still stop it the EU parlement will
| outlaw self hosted wallets."
|
| Absurd and laughable.
|
| I can't wait to start printing and handing out long random
| numbers.
|
| Now what ?
| reedjosh wrote:
| That's just evil, but also, likely not terribly
| enforceable.
|
| It would just bring crypto back to its roots as a
| government resistant alt currency. Being uncontrollable was
| the whole point. Particularly regarding Bitcoin and Monero.
| lxgr wrote:
| At least at this point in time, if you control all of the
| on/off-ramps, you can very effectively make any
| cryptocurrency non-viable as money.
| reedjosh wrote:
| I think it could slow adoption, but I've been primarily
| buying offline. Soon I'll have a lightning node too--
| improving my BTC privacy.
|
| Defi exchanges are the next major advancement to
| government resistance as well. This space would rapidly
| mature under government regulating away self custody.
| lxgr wrote:
| If all of that ends up working out, and considering no
| other restrictions are put in place: How are people going
| to pay their taxes?
|
| Being the exclusive currency accepted for tax payment is
| an important part of what makes fiat currencies money.
| matheusmoreira wrote:
| > How are people going to pay their taxes
|
| The government is going to have to suck it up and accept
| taxes in cryptocurrency. In my country such laws have
| already been proposed.
| reedjosh wrote:
| I love this. Yeah, they'll have to allow for off ramps or
| accept crypto for tax payments.
|
| I say have to as otherwise a rich private currency
| economy will grow unmolested by tax collectors.
| matheusmoreira wrote:
| > rich private currency economy will grow unmolested by
| tax collectors
|
| Honestly I wouldn't mind that either. Governments in
| general are absurdly corrupt and taxes finance that
| corruption the same way drug users finance cartels.
| matheusmoreira wrote:
| 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.
| sauwan wrote:
| Couldn't this just be that they keep some amount in cold
| storage that's not super easily accessible?
| snarf21 wrote:
| They're an exchange. Cold Storage is not their job. It isn't
| much of an exchange if I have to wait 8 hours to put in a
| sell order.
| nybble41 wrote:
| Coinbase definitely doesn't keep all their funds in a hot
| wallet. They keep enough readily accessible to cover the
| projected volume of withdrawals; the rest can be kept
| offline. They even specifically offer a "vault" service for
| managed cold storage.
|
| When you put in a sell order through the normal "retail"
| interface you're trading with Coinbase itself. Those coins
| can _stay_ offline in cold storage, as they 're just moving
| numbers around in their database, off-chain. Only
| withdrawals and periodic internal rebalancing operations
| (making up for an imbalance between buys & sells) strictly
| require online access to the keys, and those only affect a
| small part of the total.
| nanidin wrote:
| I wonder what your statement would be if a hacker
| compromised the hot wallet and drained all of the funds?
| snarf21 wrote:
| I would expect them to have insurance against theft like
| everywhere else I store money.
| nanidin wrote:
| Hmm. I would expect them to have layers of security, with
| one of those layers being funds in a cold wallet with
| serious access control around it. If I were asked to
| insure them, the premiums and coverage would hinge on
| security layers and mitigations in place to prevent loss.
| I don't think it's unreasonable to have funds in a cold
| wallet.
| matheusmoreira wrote:
| They don't need hot wallets for exchange trading. That's
| just normal accounting, numbers in a centralized database.
| They could have zero reserves and it'd still work. Only
| when you withdraw cryptocurrency from the exchange and into
| your own wallet do they need to produce actual coins for
| the transaction.
| KingOfCoders wrote:
| 8h? Iceage storage.
| dannyw wrote:
| It is entirely reasonable to use hardware security modules
| that enforce timelocks for signing.
| vermilingua wrote:
| If it were entirely reasonable they probably would have
| disclosed that as the reason.
| whywhywhywhy wrote:
| Insider trading should just be legal and fine. I mean politicians
| do it every day so I don't see why normal people shouldn't be
| allowed to.
|
| Or make it actually illegal not just "legal if you have enough
| resources"
| LatteLazy wrote:
| If you check actual share prices before and after big news, you
| will see that it already is defacto legal.
| banachtarski wrote:
| 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 advocates would rather you
| believe the current system doesn't offer those affordances than
| admit deficiencies in their blockchain based ecosystems
| logicchains wrote:
| 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.
| tsimionescu wrote:
| 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.
| Drakim wrote:
| Modern society would collapse if insider trading was legal. It
| would about as well as making bribery legal.
| logicchains wrote:
| 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?
| tmsh wrote:
| Insider trading delegitimizes markets. It's illegal for all
| regulated US commodities trading. It's called front-
| running. It in theory would make the market more efficient
| for that one minute interval where a local trader eg makes
| trades ahead of a larger institutional order of an honest
| participant. But by screwing over the honest participant it
| would misrepresent the true price of the asset. It's
| definitely illegal by the CFTC and any exchange that trades
| anything regulated.
|
| That doesn't stop people from trying to get away with it
| under the radar tho (small front-running order ahead of
| large institutional order). The innovation in crypto is
| frontrunning at the transaction time is more difficult
| (trades are encrypted, not made in some open outcry pit).
|
| However this doesn't stop exchanges from screwing over
| customers by creating demand and someone inside trading
| their pre-listed asset.
|
| To prevent that programmatically you'd need a crypto
| protocol for establishing new listings where everyone is
| aware of new listings in advance and agrees via some fair
| consensus.
| lexapro wrote:
| Who would invest in a company if senior management is
| allowed to steal from investors? You might as well legalize
| stealing. Markets need trust.
| cool_dude85 wrote:
| >There's no insider trading laws in commodities or real
| estate, have those markets collapsed?
|
| I didn't check, but is this really true? If a mining
| company executive knows that for whatever reason they will
| see a 10% drop in yield next quarter, but it's not public
| knowledge, they can buy futures, no problem? All the execs
| can get together if there's something going on and invest
| on that info as long as they're investing in the commodity,
| not stock?
| tsimionescu wrote:
| > 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.
| rosndo wrote:
| > and I will not have changed its price at all
|
| Of course you will have, buying affects the price.
| tsimionescu wrote:
| Marginally, but nowhere near to the extent that the price
| will change when the insider infortmation becomes public
| (unless I'm doing something crazy, like buying all
| available stock at any price below what I think the price
| will be).
| rosndo wrote:
| In a world where insider trading is legal, why would you
| stick to small time trades?
| tsimionescu wrote:
| Because you don't want others to notice what you're
| doing, obviously. If the CEO of X is buying massive
| amounts of X stock, people will start assuming they have
| inside information, and the price will go up. If the CEO
| of X bought a few shares at market price every day, that
| will be less likely to alert anyone, and they will be
| able to continue buying at very low prices.
| rosndo wrote:
| So you're arguing that insider trading has no effect at
| all?
| tsimionescu wrote:
| Insider trading makes someone richer at the expense of
| others, it's a form of fraud. I don't think it
| necessarily affects the market significantly otherwise,
| except by introducing more irrationality and lack of
| trust, if not regulated against.
| rosndo wrote:
| How is insider trading a form of fraud? Insider trading
| can certainly be fraud, but you'll have to further
| explain why this would be an inherent property of insider
| trading.
|
| >Insider trading makes someone richer at the expense of
| others
|
| This just shows that your understanding of markets is at
| elementary school level.
|
| How exactly does insider trading cost anybody else money?
| It simply allows for more accurate pricing.
|
| If I own shares of company $x and an insider sells their
| shares of $x causing the stock to plummet, I do not lose
| anything. I still own those stocks, they're just valued
| more accurately.
| lexapro wrote:
| Limited available capital? You can only borrow so much
| money. Also, you can't know for certain how much the
| stock will move after the information becomes public.
| rosndo wrote:
| Surely you would shop around and raise money from big
| funds? If they won't bite, maybe your information just
| isn't that impactful.
| tucnak wrote:
| >The market will not reach the correct price until
| material information becomes public.
|
| Not if the EMH is true.
| notacoward wrote:
| You're misunderstanding EMH. It does not include
| prescience. And BTW, it's generally _not_ considered true
| except in its weakest forms.
| rand49an wrote:
| Insider trading prevents information from being available
| to all parties by definition. That argument essentially
| essentially means that a certain amount of people should be
| allowed be defrauded to find the correct market price.
|
| Real estate is an especially bad example too because when
| selling a house you have to disclose any information about
| the property that may affect it's future value or risk
| legal action - but still real estate fraud continues.
| cbg0 wrote:
| > It would about as well as making bribery legal.
|
| You mean like how lobbying is legal in the US?
| novotionworepr wrote:
| 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.
| jjoonathan wrote:
| We don't just have a system of legalized bribery, we have a
| system of mandatory bribery. Campaign finance says: haven't
| collected your bribe quota from well-heeled causes? No
| public office for you.
|
| Nice.
| TheGigaChad wrote:
| pingeroo wrote:
| 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.
| bobcostas55 wrote:
| Insider trading doesn't apply to most "traditional" assets
| either. Everyone's free to trade in FX and commodities for
| example.
| zzbzq wrote:
| The SEC stated a few years ago it doesn't regard
| cryptocurrencies as securities, so that's why they don't
| police it. (IMO they are clearly securities, but the SEC may
| not want to allocate resources to policing it.)
|
| What many people don't realize is that insider trading of
| assets other than securities could still potentially be
| criminal fraud. However without the SEC, there is no
| specialized police force for addressing it.
| theknocker wrote:
| LatteLazy wrote:
| Devils advocate:
|
| The SECs core job is to protect investors and assure orderly
| markets. But it is not clear that buying a crypto asset IS an
| investment and one job of markets is to take money away from
| people who make dumb decisions (like buying a crypto "asset"
| only because Coinbase listed it). So stopping this doesn't
| actually fit their mandate any more than stopping people
| betting on sports or buying lottery tickets does.
|
| And that's without getting into the other points people have
| listed:
|
| * the SEC is toothless * FX isn't a regulated market, you
| absolutely CAN use "insider" info to trade Euros, USD etc. *
| its technically AND legally hard to prove insider trading in
| Crypto (and elsewhere) * if they did, and Coinbase etc moved
| their operations to unregulated destinations would that
| actually make anyone safer?
| wizardofdos wrote:
| Because they are a gutted, disempowered US-regulator. Wrecked
| by 4 years of Trump and countless other presidents before them.
|
| Possibly there is also not the political will to ramp up the
| regulatory speed and power although I still have hope that
| Biden will be able to change that at least a bit.
| TheColorYellow wrote:
| What are you talking about? Read some history prior to the 4
| years of the SEC.
|
| Look at the suggested reforms the SEC was supposed to
| undertake AS IDENTIFIED BY CONGRESS. Then look at what actual
| reforms where implemented.
|
| I'll help you out - almost none. The SEC has had a monopoly
| on financial market regulation since the 1930s and is just
| now becoming a victim to the cultural side affects of this
| monopoly. Shit, I actually think the SEC has done a
| phenomenal job regarding this and all other aspects of their
| job.
| FabHK wrote:
| > The SEC has had a monopoly on financial market regulation
| since the 1930s
|
| The Commodity Futures Trading Commission, Financial
| Industry Regulatory Authority, National Futures
| Association, Consumer Financial Protection Bureau, and many
| others would like a word.
|
| https://en.wikipedia.org/wiki/Commodity_Futures_Trading_Com
| m...
|
| https://en.wikipedia.org/wiki/Financial_Industry_Regulatory
| _...
|
| https://en.wikipedia.org/wiki/National_Futures_Association
|
| https://en.wikipedia.org/wiki/Consumer_Financial_Protection
| _...
| SauciestGNU wrote:
| Going to play the "my uncle works at Nintendo" card here. My
| friend works for the SEC and has been in regular contact with
| me for crypto technical details. Securities is definitely
| working on rules, but it takes time for the rule makers to
| learn the technology and understand how to best regulate it.
| unnouinceput wrote:
| 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?
| hestefisk wrote:
| The exchange is still physically registered in the US,
| similar to how non US citizens can place trades on NYSE etc.
| This cowboy market is madness and irresponsible.
| valzam wrote:
| But the crux is that those trades didn't occur on Coinbase,
| the assets hadn't even been listed yet. So it might very
| well be a case of a non-us citizen trading on a non-us
| exchange (or defi exchange). What can the SEC do in this
| case?
| wdb wrote:
| But wouldn't US laws apply when it is an American company or
| trade in the US?
| unnouinceput wrote:
| 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.
| le0x99 wrote:
| How's that surprising at all
| rvz wrote:
| Unsurprising as I said before [0], after what happened with
| OpenSea [1], Internet Computer [2] and now ApeCoin [3], you get
| this. This is how they pump and dump on retail over again.
|
| Rinse and repeat.
|
| [0] https://news.ycombinator.com/item?id=30725449
|
| [1] https://www.cnbc.com/2021/09/15/opensea-insider-trading-
| rumo...
|
| [2] https://startupsandecon.substack.com/p/you-dont-own-
| web3-a-c...
|
| [3] https://www.financemagnates.com/cryptocurrency/apecoin-by-
| yu...
| onlyrealcuzzo wrote:
| Retail is in it for the pump & dump. They just hope they have
| good timing.
| beaconstudios wrote:
| I honestly think you'd be hard pressed to find a crypto
| business that isn't rooted in some kind of scam, greater fool
| scheme, pyramid scheme, or the like. The whole industry is a
| mess.
| elefanten wrote:
| 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.
| beaconstudios wrote:
| 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.
| carmen_sandiego wrote:
| I mean, most legit exchanges are not 'rooted' in scams,
| even if some of their employees take advantage. The only
| way you could say Coinbase were 'rooted' in that is to
| assume your premise: that crypto itself is a scam.
| beaconstudios wrote:
| 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.
| carmen_sandiego wrote:
| 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.
| beaconstudios wrote:
| 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.
| willmw101 wrote:
| 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 company, being 'rooted' in
| scamming or ponzi schemes? Because this post suggests a
| bad actor within or close to the company, or at worst the
| company knowingly associating with sketchy tokens, rather
| than the entire company's activities being fundamentally
| rotten. I know HN likes to be extremely skeptical of
| crypto, often rightly so, but your comment isn't exactly
| nuanced.
| beaconstudios wrote:
| 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.
| willmw101 wrote:
| But you see, even if I did agree that that was the case
| that all exchanges are rotten, you originally said any
| crypto business. You think the various businesses that
| focus on staking, or cold wallet businesses for example,
| that focus on consolidation and/or security are 'rooted
| in scams, greater fool schemes, or ponzi'? How?
| beaconstudios wrote:
| Perhaps my original formulation was insufficiently
| precise to get my point across - I mean that crypto is
| rooted in scams and pyramid schemes and whatnot in the
| sense that the nature of the industry makes it a magnet
| for those kinds of schemes and they are the primary
| driving force behind the money flooding the industry.
| That doesn't mean that the exchanges themselves are
| explicitly doing these things, or that all the businesses
| are either directly engaged in or materially supporting
| this behaviour (though I think the majority are), but
| that it's the driving force of the industry in that
| transportation drives the oil extraction industry.
| bartvk wrote:
| I assume the vast majority of crypto is actually Bitcoin
| and Ethereum. Do you characterize these as "speculation"?
| beaconstudios wrote:
| I think most transactions made with those coins are
| speculative, yes.
| bartvk wrote:
| Well yeah, I think that most transactions will behave the
| purpose of active trading, because hodlers aren't making
| transactions.
|
| However if you look at the volume traded, versus the
| total market, I think you get a different picture.
| beaconstudios wrote:
| HODLing is also speculation. I'm saying that crypto isn't
| driving useful economic activity like investing in
| startups or small businesses can do. It's all just people
| trying to make money by finding a greater fool. Even
| speculation in a normal market can drive /some/
| innovation through capital allocation.
| bartvk wrote:
| Defining a multi-year buy & hold strategy as speculation
| doesn't sound like something I can get behind. I get what
| you're saying, but I think you're making sweeping
| generalizations here. There's plenty of people that
| invest in useful economic activity, but also save some
| money in other assets like gold and bitcoin. You are just
| calling these people speculators hoping for a greater
| fool?
|
| Or is it possible that these people have grown to trust
| bitcoin, seeing it as a savings vehicle outside of the
| usual currencies?
| beaconstudios wrote:
| I'm glad you understand what I'm trying to say, even if
| "speculation" isn't quite the right term for it.
|
| I think scams are an obvious harm, but the highly
| financialised and speculative nature of crypto is a more
| subtle harm: most investment produces positive material
| side effects like products or services, but because the
| main selling point of crypto is to continually pass it
| around in a circle, a lot of money, time, and expertise
| is wasted on something that is completely unproductive.
| To be fair, I think this criticism mostly applies to Wall
| Street too, but most people no longer try to argue that
| Wall Street is a source of meaningful innovation. To say
| nothing of the proof of work model leading to ever
| increasing energy consumption during climate change.
|
| I just don't see much real upside to the crypto industry,
| and quite a lot of downside.
| rvz wrote:
| > find a crypto business that isn't rooted in some kind
| of scam, greater fool scheme, pyramid scheme, or the
| like.
|
| > If you think differently, all you need to do is provide
| some evidence.
|
| So is this product a 'scam' then? [0] [1]
|
| [0] https://skiff.org
| FabHK wrote:
| Thanks, that looks interesting, but I don't see the
| connection to "crypto", except it being encrypted,
| laudably.
| beaconstudios wrote:
| It doesn't look like it, no. But what about that is
| actually using blockchains to solve a problem? They
| mention Web3 but I don't know if it's a requirement of
| some feature or an opportunity for a marketing buzzword.
|
| I don't deny that there are some companies that are
| trying to do real things with blockchain tech - but most
| of the money and effort appears to be going into
| speculation and/or scamming. Which isn't very productive.
| herendin wrote:
| "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?
| beaconstudios wrote:
| I don't claim to have the evidence, I claim to have made
| an observation. If the parent wanted to make a
| counterargument they could do, it wouldn't have to be
| concretely evidence based because I'm not holding a forum
| conversation to the epistemological standard of a formal
| paper or proof. Just a good example or argument would be
| more compelling than just calling my opinion a kneejerk
| reaction.
| herendin wrote:
| OK then, I assert that Beacon Studios is a company to be
| avoided because the management is incompetent.
|
| My evidence is that the founder is a hothead who wastes
| his time leaping into online flame wars with little
| understanding and no evidence.
|
| Can't you understand that this mode of discussion is
| totally unproductive?
| beaconstudios wrote:
| Why would you make a personal attack based on a
| discussion about an industry? I didn't think this was a
| flame war, more a discussion about the crypto industry -
| I'm not upset, I'm just bored because I'm stuck in
| hospital with little to do. This is a tech forum, so is
| it not the right place to discuss tech industries and
| opinions thereof? I'm not even in the minority in
| thinking the crypto industry is unproductive and largely
| centered around scams and greater fool schemes.
|
| I'm not sure what your personal attack has to do with
| this discussion - I guess you could have that opinion if
| you wanted.
| herendin wrote:
| > I guess you could have that opinion if you wanted.
|
| Yes, and that opinion of mine, WITHOUT USEFUL EVIDENCE,
| is worthless. It's no benefit to this community
|
| That's exactly my point, this mode of discussion is
| totally unproductive. It's spam. It's just tribal
| ranting.
|
| Sorry to hear you're in hospital. Hope you're feeling
| better soon
| beaconstudios wrote:
| I guess that depends on the point of the community - to
| my understanding, the point is to discuss. Reasoned
| discussions are based on arguments and observations, not
| just evidence and citations. I don't even know what kind
| of evidence you can bring up for something of this scale
| - it's not like the are metastudies on where people
| allocate capital within the crypto market, and what the
| outcomes aside from wealth transfer. It's a more systemic
| thing.
|
| I don't even understand how people can argue against
| this. Do you have the perception that most people are
| buying coins for reasons other than to sell them again
| for profit? The only types of studies I find are self-
| referential in that they report on market size.
|
| The reason I discuss the subject at all is I'm hoping
| that one day somebody gives me the piece of information
| I'm missing that shows that the crypto industry isn't
| just everybody trying to get rich while burning tons of
| fossil fuels, that there are reasonably positive outcomes
| from it. So far I just get a lot of angry reactions and
| accusations of having no proof, despite this not being a
| court case. Like, show me something good that's been made
| because of crypto! It's the easiest argument in the world
| to win.
| jakupovic wrote:
| Maybe if you throw some more big words in, you will get
| your point across. Following this thread it is pretty
| evident that you don't have any evidence for your "all
| crypto is scam", and are pretty lost when asked for
| proof.
| beaconstudios wrote:
| jakupovic wrote:
| Calling me names is definitely not something that gets
| your point across. Pretty sure as we stand you have zero
| proff for your anti-crypto statements and are resorting
| to name calling. Definitely something frowned upon by HN.
| beaconstudios wrote:
| If you want to say I have no proof that's fine, but I
| draw the line at sarcastic insults. So don't do that and
| I won't insult you back.
|
| I haven't collected evidence for my point because I'm not
| trying to make a court case - I've observed that most
| people seem to use crypto as a speculative investment,
| buying coins just to sell them to somebody else who's
| doing the same. Have you seen otherwise? Like, I don't
| want to have this negative perception of the industry, I
| generally prefer to see positive outcomes from these
| things, but I haven't observed much positive being
| produced from the industry. Surely if you're a big fan of
| the industry, you can demonstrate something good about
| it?
| ftlio wrote:
| Are there a lot of businesses in the space not attempting
| to service lots of new coins that are generally
| characterized by lack of novelty, lots of marketing fuel,
| or where if there is novelty vis a vis cryptocurrency, it
| isn't highly questionable?
|
| For better or for worse, it seems the case that most
| businesses in the so-called cryptocurrency space are
| working with some pretty dubious "assets" with some pretty
| dubious backers, which would make your parent comment
| pretty accurate.
| trustfundbaby wrote:
| "Every great cause begins as a movement, becomes a business, and
| eventually degenerates into a racket."
| SkipperCat wrote:
| I just consider Coinbase and it ilk as "safe" places for
| cryptocurrency. I don't think of them as ethical in the same way
| I'd think of an account at TDAmeritrade, Schwab, etc. Traditional
| brokerage houses have regulations forcing them to play fair, and
| reporting structures to enforce it.
|
| Crypto exchanges are trying to convince the world they are a more
| secure place for your coins. Better IT security and highly funded
| enough to probably make good on any hacks. The synergy is they
| want to keep me safe so they can keep their reputation (and their
| reputation gives them more business).
|
| Is that a fair deal? That's for each of us to decide. Keep your
| coins where you wish.
| chrsw wrote:
| Their name is their name?
| bliteben wrote:
| Even real brokerages often make mistakes, we hear lots about
| the ones at Robinhood, but it happens at others too. Coinbase
| will not always the the luxury of undoing their mistakes.
| TheColorYellow wrote:
| I appreciate your sentiment, but I want to point out that your
| belief that "Traditional brokerage houses have regulations
| forcing them to play fair" and believing that there are
| adequate "reporting structures to enforce it" is a great
| example of the moral hazard that exists in the market today.
|
| I agree that law and regulation plays an important role in the
| market, but as the market has advanced and become increasingly
| more complex than previous models, I do not believe Law and
| regulation has kept up.
|
| The GME fiasco and the resulting litigation is a good example
| of these problems. And before anyone says this is proof the
| rules in place work - I'd like to point out that our online
| brokerage infrastructure and market structure has been around
| since the early 2000's. It's quite difficult to say what has
| not been surfaced and recognized. And no, despite the nature of
| the trade itself, no one should discredit the lawsuit as
| illegitimate. https://www.thinkadvisor.com/2021/01/29/gamestop-
| lawsuits-hi...
|
| The absurdity and extreme nature of the GME case shows tells me
| that there are outstanding issues throughout this value chain.
| And the belief that our system of rules adequately handles this
| just because the rules exist is a strong indicator of the moral
| hazard that prevades our market culture.
| SkipperCat wrote:
| Everything is relative. You cite GME, fair point. I'll cite
| Quadriga CX, where the founder died in India and took the
| passwords to the grave with him. Pretty much everyone had
| their coins frozen forever. That would never happen to
| people's stock portfolio's at a major brokerage firm.
|
| The SEC is far from perfect, but what they do adds value to
| the individual investor in general.
| vosper wrote:
| The big-brain move would be to identify the wallets that must be
| trading on "insider" info, and copy their trades?
| matheusmoreira wrote:
| Yeah. Bitcoin for example has rich lists: we know the addresses
| of whales and can track their movements via the blockchain.
| Some rich person suddenly moving hundreds of thousands in
| bitcoin to an exchange can be a potent sell signal.
| londons_explore wrote:
| Anyone smart would use a new wallet each time.
| 0xdeadb00f wrote:
| These are people who use coinbase (and I assume work for
| coinbase too) for sketchy crypto trading. Already not the
| smartest.
| rosndo wrote:
| Why is this trading sketchy?
| 0xdeadb00f wrote:
| I mean to be truthful _I_ don 't find it that sketchy,
| but clearly somebody does
| ianpurton wrote:
| Not necessarily. If people buy after you trade then the value
| of your wallet goes up.
| mousetree wrote:
| Could you explain further. I'm not sure I understand how
| this relates to the parent comment?
| drexlspivey wrote:
| It's in their interest if other people copy their trades
| because the asset values will go up
| lbotos wrote:
| If I have information that the price of x coin is going
| to go up and my friend knows I know, then they just need
| to follow my trades and they can make money too.
|
| If enough people follow my trades then this can generate
| demand and actually affect the price.
| ButchC wrote:
| Imagine you you had a magic button that suddenly
| increased demand for a volatile security any time you
| pressed it. That would be a fairly valuable thing for
| some people.
| vlan0 wrote:
| There was a time when this would work. But as we've seen with
| high profile taken downs, the folks like those at Chainalysis
| make it incredibly hard to obfuscate with any degree of
| certainty.
| fuckcensorship wrote:
| This isn't true for Monero.
| cuteboy19 wrote:
| Withdrawals from Coinbase to would be indistinguishable
| from temporary insider trading accounts. And there are
| certainly a lot of withdrawals. And in many cases the
| trading happens off chain anyways
| perihelions wrote:
| Is this insider trading according to the law? Nonpublic
| information isn't being used to trade public stocks; it's being
| used to trade assets that don't appear to be regulated
| securities.
| anm89 wrote:
| This was my question as well. Id assume its a grey area and
| that the sec could come after them if they wanted. Whether they
| would win is anorher story
| chrisco255 wrote:
| No, probably not. Nevermind that our own Congress regularly
| pulls this on us in the stock and real estate markets, insider
| trading happens all the time in various forms. The only
| difference here is that you can scan the chain for obvious
| forms of it.
| soco wrote:
| It's not illegal but that's the very reason why some things got
| regulated in the first place.
| dogman144 wrote:
| Because of this, there aren't laws for it as far as I know,
| only internal ethics docs. Might be more requirements for
| public companies, but still not the same as insider trading.
| H8crilA wrote:
| It is perfectly legal to trade non-securites based on insider
| information, for example real estate. Are these securities
| though? Wait, I think I heard that question before.
| FabHK wrote:
| Point on insider trading law that the inimitable Matt Levine
| writes about frequently:
|
| The law is not about fairness, but about theft (of inside
| information). In particular, it is illegal to misappropriate
| someone else's information you come across to do insider
| trading for your own benefit. But it is not illegal for someone
| to use their own information to trade on.
|
| In this case, Coinbase published a list of coins that it might
| list. As I understand it, it would be illegal if some employee
| of Coinbase bought these coins prior to the release for his own
| account (thereby misappropriating the information). But if
| Coinbase bought them for their account, and then released the
| list, and then made money on the subsequent rise, that would be
| perfectly legal.
|
| See for example here:
|
| https://www.bloomberg.com/opinion/articles/2019-03-13/you-ha...
| matwood wrote:
| To add to what you're saying, forex explicitly does not have
| insider trading rules. The problem is it's treated as a general
| asset.
|
| It feels like there should already be rules in place to handle
| if, for example, an Amazon exec went and bought property around
| an area prior to Amazon announcing their new HQ.
| alephnan wrote:
| There were some Amazon couple speculating on real estate in
| Long Island City, Queens, NYC where Amazon was potentially
| opening an HQ.
|
| Amazon didn't, and the coupled sued the condo.
|
| Trying to find the article.
| mikepurvis wrote:
| I don't see the lawsuit piece here, but definitely there
| was a bunch of speculation going on around that time:
|
| https://www.cnbc.com/2019/02/15/luxury-real-estate-agent-
| rya...
|
| I feel like this is less someone getting an unfair benefit
| and more just eager people experiencing at least part of
| what the regulatory framework is meant to protect them
| from-- which is being taken to the cleaners on the basis of
| rumours that don't end up panning out.
| dalbasal wrote:
| Perhaps, though insider trading rules are pretty hard to
| enforce inside relatively confined and regulated realms.
|
| One solution is to go a step up the meta. Ban trading for
| certain groups or classes, like banning parliamentarians and
| government officials. ..but spouses, kids, friends and
| cousins make for a pretty substantial loophole.
|
| That said, not regulating against insider trading bleeds very
| quickly into market manipulation and corruption.
|
| Not sure what the ansers are. This is a very dirty part of
| the game game. Crypto brings in a new set of players, and it
| takes years before they'll learn to do this in a way that
| maintains a stable plausible legitimacy.
|
| We absolutely cannot have second tier people insider trading
| and rigging markets. It's antistabalizing.
| andrewinardeer wrote:
| Musk can move markets with a tweet. I doubt there is
| anything anyone can do about that. And he knows it. And I'm
| sure he benefits from it too.
| pardon_me wrote:
| The world seems to run on "favors" of insider knowledge like
| this.
| WHA8m wrote:
| The question is, when is a coincident of making profit too
| big to actually be true. And I feel like this could be
| something that AI can be used for in the future. No human can
| overlook all the possibilities one could profit off insider
| information.
| jchonphoenix wrote:
| Insider trading on real estate is explicitly allowed by law.
| vmception wrote:
| no, its not. spot assets have no insider trading prohibition or
| sanction for trading in advance.
|
| equities (and some slight case law in the bond markets) have
| insider trading prohibitions attached, and futures have some
| newer anti fraud statutes tacked on to them by a different
| regulatory agency.
| xiphias2 wrote:
| They are regulated securities, just the SEC doesn't do anything
| about them. BTC is the only cryptocurrency where SEC has
| clearly stated that it's not a security. ETH is grey area. A
| lot of the altcoins / tokens are clearly securities.
| mouzogu wrote:
| probably an employee or contact of an employee.
|
| frankly coinbase themselves are known to accumulate vast acoumts
| of a cryptocurrency before listing, so its not like they would
| have a reason to do this in such convoluted way.
| djbusby wrote:
| This reddit thread was posted about it too.
|
| https://www.reddit.com/r/CryptoCurrency/comments/u2f90u/ther...
| cryptocoder88 wrote:
| lawrenceyan wrote:
| If you're jaded by web3, just imagine how people back in the day
| must have viewed web2. Now take a look at the the top 10
| companies listed on the S&P 500.
| Traster wrote:
| This is literally the scam of Web3. Just because you name
| something Web3 doesn't mean it's going to become the next big
| thing. There is no relationship between the success of Web2 and
| what will happen with Web3. Do you know how I know that?
| Because Web3 was coined by Sir Tim Berners Lee in 2006 as the
| semantic web and it didn't go anywhere.
|
| "Oh well, you see web3 is like web2 + 1 and we know web1+1 was
| great so web2+1 must be even better". It's an idiots logic.
| lawrenceyan wrote:
| Feel free to call them whatever you want. They're just words
| meant to abstract a concept / zeitgeist.
|
| If I were to define the two respectively to someone who had
| never encountered the terms before, web2 would be the
| centralization of the early internet ecosystem in order to
| increase scalability + capture/generate profit funnels with
| web3 being the corresponding deconstruction back towards
| decentralization and economic distribution thanks to work on
| improved consensus algorithms in trustless settings.
| valeness wrote:
| But you have no evidence of this. You're just saying "This
| thing I like will be big because I like it"
|
| Web2 had a lot of stars align to become "the next big
| thing". (The newfound capacity for advertising, smartphones
| driving adoption, and the mechanisms for tracking and
| stealing user data). And none of those stars had to deal
| with privacy, decentralization, security, encryption, etc.
| All of these things that we have been trying to get
| consumers to value and consider for years; are actually
| antithetical to corporation's profit incentive. The tech
| industry has tried for a very long time. The concepts
| behind web3, such as decentralization, are not new. They
| have been tried, and created, and even somewhat adopted,
| for a VERY long time. Blockchain is just the new mechanism
| to try and attack this, but like most things on the
| internet, the problem is not a technical one: It's a social
| and economic one.
|
| Until you talk about dismantling capitalism, I don't see
| web3 as being anything more than a natural cycle of niche
| internet interest combined with speculative market scams
| that entrap vulnerable populations into caring about it
| just long enough for them get burned on the latest crypto
| rugpull.
| dropnerd wrote:
| decentralized ownership hasnt been tried at scale before
| bitcoin.
|
| most wont care about it until their digital purchases
| start getting sunsetted without migration, and then they
| notice there is an alternative.
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