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I wonder how much money Coinbase employees, friends and family made by insider trading on this announcement. Gotta love unregulated markets!

Alex3917 9y ago
The markets aren't unregulated, the regulations just haven't been enforced much yet.
jgrowl 9y ago
Real talk though. Why does it matter? No skin off my back.
- ncallaway 9y ago
  Are you looking for an explanation for existence of insider trading laws?
  - Pyxl101 9y ago
    Is this actually insider trading? Why? According to SEC.gov: > Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security Bitcoin Cash is not a stock or a security, so it's questionable whether this concept even applies. But even if you considered it to be a security, then how is Coinbase's decision to list Bitcoin Cash on their exchange somehow in breach of "a fiduciary duty or other reltionship of trust and confidence"? Perhaps there is some other SEC regulation they might be violating about how the operators of exchanges can trade on their own exchange, such as front running, but it doesn't seem like that would have anything to do with insider trading. I agree that it's possible that Coinbase's decision to begin trading this asset could influence its value, but that doesn't make the action insider trading. It's fine to take actions while expecting to influence the value of an asset - see for example the massive short position that Ackman took against Herbalife. His public media campaign to discredit the company was expected (calculated) to drive down the value of their stock, but is the fact that he took out short sales in advance of that action "insider trading"? No.
  - deleted 9y ago
    [deleted]
  - jgrowl 9y ago
    Specifically with regards to this situation. Who is harmed?
    - hendzen 9y ago
      Market participants who sold BCH earlier today before the announcement to insiders who bought knowing that the price was sure to rise after this announcement?
      - jstanley 9y ago
        But they were selling anyway. What difference does it make if they sold to insiders? If anything, the insiders gave them a better price.
    - conanbatt 9y ago
      As I explain on another comment, there is one thing that is insider trading as acting on priviledged information, and the other is provoking the situation that allows insider trading. The latter is pure fraud to me. Coinbase deliberately hid the release date and deceived the public while put themselves and their organization in a place to profit with insider trading.
- Trundle 9y ago
  Insider trading laws gamify the finance industry by reducing the level of accuracy with which people are permitted to trade in order to increase the liquidity in the market. I believe this is done to increase stability. It's purely an economic decision to have it be illegal, I can't see anything inherently immoral about it. Some people consider breaking the law to be immoral even when the activity would otherwise be ok however I suspect most people that get angry about insider trading do so because its an activity associated with wealthy wall street types and they're really just angry at wealthy wall street types.
deleted 9y ago
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huangc10 9y ago
Exactly the first thought that came to my mind. BCH up 30%. I wonder how many Coinbase employees bought BCH throughout this past month. Also. it's easily predictable that introducing a new currency will temporarily affect the other currencies negatively. Very gray area.
- gruez 9y ago
  as pointed out by another commenter[1], this move was publicly announced https://news.ycombinator.com/item?id=15966191 https://news.ycombinator.com/item?id=15966191
  - conanbatt 9y ago
    Release should have had a date. All day there were weird things going on , with miners network pollution and seemingly pre-coinbase trades. Coinbase once again exposes itself to extreme public scorn by screwing over its users.
- panarky 9y ago
  FTFA: Coinbase maintains a strict trading policy and internal guidelines for employees. Coinbase employees have been prohibited from trading in Bitcoin Cash for several weeks. Now, how would Coinbase know if an employee traded BCH on another exchange?
  - xiphias 9y ago
    Also it doesn't speak about board members
  - enraged_camel 9y ago
    They wouldn't know of course, but that's not the point. The point is to cover their own ass if they get in legal trouble, by saying "well, we told them it was prohibited, and made them sign stuff". It's the same reason companies make all their employees go through sexual harassment training. Not because they actually believe such training reduces sexual harassment, but rather because they want to eliminate liability.
Miner49er 9y ago
That's actually consistent with other currencies though. You can inside trade on forex markets.
- fanzhang 9y ago
  Also commodities if I remember correctly, which are regulated as well. Also there's a big theoretical and serious discussion in financial economics on why insider trading is even net bad. In some ways aren't stock analysts "insiders" with respect to your average SV engineer investing, and isn't an SV engineer who is able to fully understand a balance sheet an "insider" with respect to gambling grandma in Iowa?
  - derefr 9y ago
    My understanding is that "knowledgeable outsiders", in executing trades, effectively make accessible whatever esoteric-but-technically-public information they had to the market, and so help prices adjust toward their correct value. Knowledgeable insiders, on the other hand, can execute "hidden" trades that aren't revealed to the public market—and so don't provide information to the market. This distorts the market, moving the value of the instrument away from its true price.
    - wmf 9y ago
      If these hidden trades (dark pools?) are possible, why can't knowledgeable outsiders also use them?
    - fanzhang 9y ago
      Well suppose the CEO of ACME Pharma knows a major drug trial just failed. If she sold massively and pushed the price down, wouldn't that cause the lower price to be reflective of the actual real valuation of ACME (which is lower because they don't have a major drug now). Of course, I wouldn't want to be the guy on the other side of that trade. But then again a casual grandma probably doesn't want to be on the other side of the trade of a multimillion dollar research team either.
    - 9y ago
stanchion 9y ago
Bitcoin Cash was added to the public API yesterday I believe.
hisabness 9y ago
is it illegal to use insider info on unregulated commodities? i don't believe so...
- hendzen 9y ago
  IANAL, but with the existence of Bitcoin futures on CME and CBOE, the CFTC presumably has some jurisdiction over insider trading in BTC spot markets, insomuch as they affect futures prices. Under the 'Misappropriation Theory', insider trading occurs when confidential information is misappropriated for a trading gain. This interpretation of the law has been used by the CFTC in the past [0] to prosecute insider trading cases. Did Coinbase employees (or their friends/family) commit IT under this definition? I don't know, but if I was the General Counsel of Coinbase I would be hastily typing up a mandatory internal compliance policy for immediate disclosure of cryptocurrency holdings, pre-clearance of all cryptocurrency trades, and a minimum 30-day holding period to discourage day-trading. Such policies are very standard at traditional financial institutions that have access to material non-public information (MNPI) about the financial markets. [0] - https://www.cov.com/-/media/files/corporate/publications/2016/10/cftc_enforcement_outlook_insider_trading.pdf https://www.cov.com/-/media/files/corporate/publications/201...
- wyldfire 9y ago
  If you find yourself asking "Is it illegal to do something not explicitly barred by the law but something that seems dishonest?" then you should be prepared for consequences. Prosecutors, judges, attorneys and even jurors aren't stupid. There are remarkably broad statutes out there, fraud or theft or something could reasonably be brought to bear upon you.
stevebmark 9y ago
I think it would be pretty cool to see Coinbase employees go to prison for insider trading. Not out of any sort of vengeance, I just think it would be a huge paradigm shift in cryptoland. Continuing saga between regulation and pure greed/manipulation of cryptos. I assume most country's (especially the US's) federal regulations are way too slow to verify this is in fact true illegal insider trading though?
- deleted 9y ago
  [deleted]
- hendzen 9y ago
  I don't really know if any Coinbase employees really committed insider trading - I'm just speculating based on the fact that the price of BCH appeared to rise significantly before the public announcement. Its also unclear what internal firm policies that Coinbase has in place to prevent insider trading, see my reply to hisabness for more on that and an explanation (note: IANAL) of how regulation could be applied.
  - koolba 9y ago
    If a Coinbase employee wanted to trade on inside info they wouldn’t have to do it through Coinbase either. They could do it on another exchange.
  - mrb 9y ago
    The price went up before the announcement because the whole world has known BCH trading was extremely likely and imminent for 2 days: https://www.reddit.com/r/btc/comments/7kfzbi/attn_bitcoin_cash_added_to_coinbase_api_extremely/ https://www.reddit.com/r/btc/comments/7kfzbi/attn_bitcoin_ca...
- Cyberdog 9y ago
  There is nothing cool about tearing people away from their families and locking them in tiny cages for such a nebulous and arguably victimless "crime."
wmf 9y ago
This was announced on Aug 3rd: https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbdf https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbd... At that time the price was just under $500 so the public had plenty of time to get in. Also note that the price could very well drop as Coinbase customers sell their "free" BCH.
- modeless 9y ago
  Yeah, but the exact timing was not announced, and it was known to some insiders. Knowledge of that timing would be worth a very large amount of money.
  - wmf 9y ago
    Outsiders: Bought at $500, sold at $3,500, 600% gain in five months. Insiders: Bought at $2,500, sold at $3,500, 40% gain in a few hours. So yeah, insiders could do great on an annualized basis if they could do a bunch of insider trades in a row.
  - pmorici 9y ago
    People who were watching closely had about 3 days notice. a BCH check box briefly appeared in their API key configuration tool a couple days ago and screen shots of it were posted on reddit. Anyone who didn't think Coinbase wasn't going to enable BCH trading was either in denial or not paying attention.
- hendzen 9y ago
  > Once supported, customers will be able to withdraw bitcoin cash. We’ll make a determination at a later date about adding trading support. It's the trading support part that was not public, and that part is very important as it significantly widens the population of people who can easily purchase BCH.
cohnnton 9y ago
Yes, YCombinator, you should be proud; you've made a giant money sucking machine that will suck money out of clueless millennials, poor grandmas, and well, mainstream idiots. Here's to no government regulations!!
conanbatt 9y ago
I have generally mixed feelings about insider trading, because in the end, people making decisions on best information looks like economically profitable for the system. That said, Coinbase did more than insider trading today, they deliberately hid their BCash announcement to perform insider trading. That is straight down fraud to me. They provoked the insider trading situation.
- autokad 9y ago
  if you watched the interview on fast money, you could tell they were going to start trading bit coin cash. obviously he couldnt come out and say it, but it seemed pretty apparent to me.
- erentz 9y ago
  This is what bothers me the most. Coinbase previously had indicated only withdrawals would be enabled by Jan 1st, which means they'd have a form where you could claim your BCH and have it sent to your private wallet address. Somehow this turned into "Actually we'll allow full trading. And surprise! We're not even going to tell you about it despite working on it for months, we'll just unleash it on a random Tuesday evening."
  - fpisfun 9y ago
    Definitely not possible to buy it today on coinbase as far as I can tell
- mrb 9y ago
  What evidence do you have they performed insider trading? There is none. You are just speculating.
  - conanbatt 9y ago
    You are putting the burden of proof on an individual with no information access to coinbases operations. At the court of public opinion (or consumer opinion in this case), the appearance of corruption is enough to condemn. Its pretty clear something happened because there was quite a commotion hours before it happened, which means market makers knew it was coming. I have documented message sbefore the coinbase announcement that something weird was going on, and so has the community. Not only that, coinbase gave the appearance of neutrality when it deliberately lied on release date and scope of release. For what purpose but to take advantage of the information arbitrage. Coinbase sold its users today and as a portion of the community has been vocal about, I recommend leaving coinbase to another exchange that hasn't proven to screw over their users.
pmorici 9y ago
Coinbase prohibited employees from trading BCH in the weeks leading up to this according to their twitter.
- gtrubetskoy 9y ago
  Exactly how do you "prohibit" trading a crypto currency?
  - pmorici 9y ago
    How does any company prohibit anything?
    - hendzen 9y ago
      For insider trading on the US equities or options markets, the SEC has surveillance tools that flag unusual short term gains around corporate actions, and then check if any of the counterparties are insiders or related to insiders via marriage, etc. Don't think anything on that level is being done in the cryptocurrency space. Obviously a company has to trust its employees to a certain degree but it is certainly easier to conceal cryptocurrency holdings compared to a holdings of a traditional security.
    - overcast 9y ago
      Insider trading laws.
    - notyourday 9y ago
      Surveillance + exchange audits + preservation of all communication.
    - gtrubetskoy 9y ago
      The way it's usually done in the US is employees have a special brokerage account which is closely monitored (and probably won't let you trade during blackouts). Even if you had your own account on the side, the brokers would have caught it - this stuff is monitored very closely. When it comes to crypto - all you need is an offshore exchange, of which there are plenty. In all honesty, I don't know what is going on at Coinbase. It looks like a circus and I suspect its days are numbered. It is really depressing actually, not at all what the crypto community needs right now.
maram 9y ago
this move by coinbase will prompt the gov to regulate trading cryptocurrency, which will lead to further legitimization of cryptocurrency..
- hendzen 9y ago
  so what you're telling me... is that this is good for Bitcoin?
  - pmorici 9y ago
    Cash
  - maram 9y ago
    I'm telling you that this is good for legitimizing cryptocurrency and its trading overall. And when when so many people start to perceive cryptocurrency as a legitimate currency, the price will eventually go up for bitcoin. This is an early stage mainstream...
    - spookthesunset 9y ago
      > And when when so many people start to perceive cryptocurrency as a legitimate currency, the price will eventually go up for bitcoin. Bitcoin doesn't work as a currency. It's slow, expensive and can never ever scale to handle even the needs of a small town. > This is an early stage mainstream... Keep dreaming.
      - maram 9y ago
        >Bitcoin doesn't work as a currency No cryptocurrency is working as a currency today. >Keep dreaming. its not functioning as a currency..no cryptocurrency's has a stable intrinsic value because not many people are using it as a currency YET. Everyone is trading cryptocurrencies, and it will continue like that to attract more people. the price will be stable when: 1. people outside the tech real start using it as a currency to buy stuff with (not to cash it) 2. the technology is still so expensive. its like the internet and hotmail back in 1996..you can argue whether it was a mainstream or an early stage mainstream..it all depends on your "perception"
f2n 9y ago
Per their twitter, "Coinbase employees have been prohibited from trading in Bitcoin Cash for several weeks." https://twitter.com/coinbase/status/943290391419174912 https://twitter.com/coinbase/status/943290391419174912
- verroq 9y ago
  That totally stopped everyone I am sure.
- sergiotapia 9y ago
  Pinky promise!
- paulie_a 9y ago
  And there was no abuse for financial gain and everyone lived happily ever after
  - ringaroundthetx 9y ago
    bahahaha please write my children's bedtime stories
    - paulie_a 9y ago
      First book: "The cat in the hat loses his hat" a story of crypto currency
      - adjkant 9y ago
        That has to be the second one actually. "The cat in the hat puts his hat on the blockchain"
- dheera 9y ago
  So have your SO/friend/etc. buy a bunch of it and slip you a gift card as a Christmas present? There's no law banning insider trading; Coinbase cannot really enforce anything beyond their own contractually-bound employees. I actually find it interesting/relieving to have a market where insider trading is legal. If you got your hands on inside information, more power to you! In the stock market, insider trading being illegal effectively only helps institutions who are already rich, have access to high-frequency trading, effectively do insider trading anyway and get away with it, and puts the average Joes sitting at home with an eTrade account at a distinct disadvantage. There are things that cryptocurrencies could do to avoid insider trading becoming abused. For example, ensure that larger trades take a long time. Trades of 1000 BTC should require days to execute, while trades of 0.1 BTC should execute in milliseconds. That would help de-throne the hedge funds of the world who have access to more information than average Joe can process, and empower average Joes to leverage everything they know, without messing up the market dynamics for small quantities.
agorabinary 9y ago
There is a huge amount of non-public information out there that insiders can use for profit, and it will always be the case no matter what regulations you enforce.
TaylorGood 9y ago
It wasn't a given the announcement would skyrocket BCH, however, I'd be shocked if anyone at Coinbase wasn't extremely successful with Crypto right now. The fringe benefit of being in an environment where they breath cryptocurrency is digital gold, or at least a strong multiple of their salaries.
rvern 9y ago
Gotta love unregulated markets indeed! Insider trading makes markets more efficient by moving the market price closer to the postdisclosure price. That is good; contrary to Chesterton's fence, most market regulations with plausible-sounding reasoning justifying them do not have a good reason to exist as they outrun mainstream understanding of economics—which should not be confused with the opinions of regulators or even polls of professional economists. From the article on insider trading in The Concise Encyclopedia of Economics: > Who benefits from regulation of insider trading? One group of beneficiaries is market professionals—broker-dealers, securities analysts, floor traders, arbitrageurs, and institutional investors. The reason is that they are “next in line” for trading profits, as they possess an advantage over public investors in collecting and analyzing information (Haddock and Macey 1987). Regulation also, of course, benefits the regulators—that is, the SEC—by giving that agency greater power, prestige, and budget (Bainbridge 2002). However, the benefits from insider trading laws to small shareholders, the alleged primary beneficiaries, have been extensively debated. From www.econlib.org/library/Columns/y2015/Hooperharmed.html: > Insider trading laws are yet another example of government's desire to capture and exercise political, regulatory and legal power, gain huge monetary awards, and garner favorable PR, all for the sake of prosecuting victimless "crimes" and promoting misplaced notions of fairness. Insider trading should be embraced for its beneficial effects on market efficiency and left as a private matter for those companies interested in preventing it. Consequently, the SEC should not have a leading role in insider-trading cases, especially if the purpose is to benefit one group of insiders at the expense of another.
quikoffs 9y ago
Looks like coinbase chief executive saw your post ;P https://news.ycombinator.com/item?id=15969102 https://news.ycombinator.com/item?id=15969102 From the link's tfa > The company's chief executive intervened after several market watchers posted allegations of illegal activity on social media sites.

Alex3917 9y ago

The markets aren't unregulated, the regulations just haven't been enforced much yet.

jgrowl 9y ago

Real talk though. Why does it matter? No skin off my back.

ncallaway 9y ago
Are you looking for an explanation for existence of insider trading laws?
- Pyxl101 9y ago
  Is this actually insider trading? Why? According to SEC.gov: > Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security Bitcoin Cash is not a stock or a security, so it's questionable whether this concept even applies. But even if you considered it to be a security, then how is Coinbase's decision to list Bitcoin Cash on their exchange somehow in breach of "a fiduciary duty or other reltionship of trust and confidence"? Perhaps there is some other SEC regulation they might be violating about how the operators of exchanges can trade on their own exchange, such as front running, but it doesn't seem like that would have anything to do with insider trading. I agree that it's possible that Coinbase's decision to begin trading this asset could influence its value, but that doesn't make the action insider trading. It's fine to take actions while expecting to influence the value of an asset - see for example the massive short position that Ackman took against Herbalife. His public media campaign to discredit the company was expected (calculated) to drive down the value of their stock, but is the fact that he took out short sales in advance of that action "insider trading"? No.
- deleted 9y ago
  [deleted]
- jgrowl 9y ago
  Specifically with regards to this situation. Who is harmed?
  - hendzen 9y ago
    Market participants who sold BCH earlier today before the announcement to insiders who bought knowing that the price was sure to rise after this announcement?
    - jstanley 9y ago
      But they were selling anyway. What difference does it make if they sold to insiders? If anything, the insiders gave them a better price.
  - conanbatt 9y ago
    As I explain on another comment, there is one thing that is insider trading as acting on priviledged information, and the other is provoking the situation that allows insider trading. The latter is pure fraud to me. Coinbase deliberately hid the release date and deceived the public while put themselves and their organization in a place to profit with insider trading.
Trundle 9y ago
Insider trading laws gamify the finance industry by reducing the level of accuracy with which people are permitted to trade in order to increase the liquidity in the market. I believe this is done to increase stability. It's purely an economic decision to have it be illegal, I can't see anything inherently immoral about it. Some people consider breaking the law to be immoral even when the activity would otherwise be ok however I suspect most people that get angry about insider trading do so because its an activity associated with wealthy wall street types and they're really just angry at wealthy wall street types.

deleted 9y ago

[deleted]

huangc10 9y ago

Exactly the first thought that came to my mind. BCH up 30%. I wonder how many Coinbase employees bought BCH throughout this past month. Also. it's easily predictable that introducing a new currency will temporarily affect the other currencies negatively. Very gray area.

gruez 9y ago
as pointed out by another commenter[1], this move was publicly announced https://news.ycombinator.com/item?id=15966191 https://news.ycombinator.com/item?id=15966191
- conanbatt 9y ago
  Release should have had a date. All day there were weird things going on , with miners network pollution and seemingly pre-coinbase trades. Coinbase once again exposes itself to extreme public scorn by screwing over its users.
panarky 9y ago
FTFA: Coinbase maintains a strict trading policy and internal guidelines for employees. Coinbase employees have been prohibited from trading in Bitcoin Cash for several weeks. Now, how would Coinbase know if an employee traded BCH on another exchange?
- xiphias 9y ago
  Also it doesn't speak about board members
- enraged_camel 9y ago
  They wouldn't know of course, but that's not the point. The point is to cover their own ass if they get in legal trouble, by saying "well, we told them it was prohibited, and made them sign stuff". It's the same reason companies make all their employees go through sexual harassment training. Not because they actually believe such training reduces sexual harassment, but rather because they want to eliminate liability.

Miner49er 9y ago

That's actually consistent with other currencies though. You can inside trade on forex markets.

fanzhang 9y ago
Also commodities if I remember correctly, which are regulated as well. Also there's a big theoretical and serious discussion in financial economics on why insider trading is even net bad. In some ways aren't stock analysts "insiders" with respect to your average SV engineer investing, and isn't an SV engineer who is able to fully understand a balance sheet an "insider" with respect to gambling grandma in Iowa?
- derefr 9y ago
  My understanding is that "knowledgeable outsiders", in executing trades, effectively make accessible whatever esoteric-but-technically-public information they had to the market, and so help prices adjust toward their correct value. Knowledgeable insiders, on the other hand, can execute "hidden" trades that aren't revealed to the public market—and so don't provide information to the market. This distorts the market, moving the value of the instrument away from its true price.
  - wmf 9y ago
    If these hidden trades (dark pools?) are possible, why can't knowledgeable outsiders also use them?
  - fanzhang 9y ago
    Well suppose the CEO of ACME Pharma knows a major drug trial just failed. If she sold massively and pushed the price down, wouldn't that cause the lower price to be reflective of the actual real valuation of ACME (which is lower because they don't have a major drug now). Of course, I wouldn't want to be the guy on the other side of that trade. But then again a casual grandma probably doesn't want to be on the other side of the trade of a multimillion dollar research team either.
  - 9y ago

stanchion 9y ago

Bitcoin Cash was added to the public API yesterday I believe.

hisabness 9y ago

is it illegal to use insider info on unregulated commodities? i don't believe so...

hendzen 9y ago
IANAL, but with the existence of Bitcoin futures on CME and CBOE, the CFTC presumably has some jurisdiction over insider trading in BTC spot markets, insomuch as they affect futures prices. Under the 'Misappropriation Theory', insider trading occurs when confidential information is misappropriated for a trading gain. This interpretation of the law has been used by the CFTC in the past [0] to prosecute insider trading cases. Did Coinbase employees (or their friends/family) commit IT under this definition? I don't know, but if I was the General Counsel of Coinbase I would be hastily typing up a mandatory internal compliance policy for immediate disclosure of cryptocurrency holdings, pre-clearance of all cryptocurrency trades, and a minimum 30-day holding period to discourage day-trading. Such policies are very standard at traditional financial institutions that have access to material non-public information (MNPI) about the financial markets. [0] - https://www.cov.com/-/media/files/corporate/publications/2016/10/cftc_enforcement_outlook_insider_trading.pdf https://www.cov.com/-/media/files/corporate/publications/201...
wyldfire 9y ago
If you find yourself asking "Is it illegal to do something not explicitly barred by the law but something that seems dishonest?" then you should be prepared for consequences. Prosecutors, judges, attorneys and even jurors aren't stupid. There are remarkably broad statutes out there, fraud or theft or something could reasonably be brought to bear upon you.

stevebmark 9y ago

I think it would be pretty cool to see Coinbase employees go to prison for insider trading. Not out of any sort of vengeance, I just think it would be a huge paradigm shift in cryptoland. Continuing saga between regulation and pure greed/manipulation of cryptos. I assume most country's (especially the US's) federal regulations are way too slow to verify this is in fact true illegal insider trading though?

deleted 9y ago
[deleted]
hendzen 9y ago
I don't really know if any Coinbase employees really committed insider trading - I'm just speculating based on the fact that the price of BCH appeared to rise significantly before the public announcement. Its also unclear what internal firm policies that Coinbase has in place to prevent insider trading, see my reply to hisabness for more on that and an explanation (note: IANAL) of how regulation could be applied.
- koolba 9y ago
  If a Coinbase employee wanted to trade on inside info they wouldn’t have to do it through Coinbase either. They could do it on another exchange.
- mrb 9y ago
  The price went up before the announcement because the whole world has known BCH trading was extremely likely and imminent for 2 days: https://www.reddit.com/r/btc/comments/7kfzbi/attn_bitcoin_cash_added_to_coinbase_api_extremely/ https://www.reddit.com/r/btc/comments/7kfzbi/attn_bitcoin_ca...
Cyberdog 9y ago
There is nothing cool about tearing people away from their families and locking them in tiny cages for such a nebulous and arguably victimless "crime."

wmf 9y ago

This was announced on Aug 3rd: https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbdf https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbd... At that time the price was just under $500 so the public had plenty of time to get in. Also note that the price could very well drop as Coinbase customers sell their "free" BCH.

modeless 9y ago
Yeah, but the exact timing was not announced, and it was known to some insiders. Knowledge of that timing would be worth a very large amount of money.
- wmf 9y ago
  Outsiders: Bought at $500, sold at $3,500, 600% gain in five months. Insiders: Bought at $2,500, sold at $3,500, 40% gain in a few hours. So yeah, insiders could do great on an annualized basis if they could do a bunch of insider trades in a row.
- pmorici 9y ago
  People who were watching closely had about 3 days notice. a BCH check box briefly appeared in their API key configuration tool a couple days ago and screen shots of it were posted on reddit. Anyone who didn't think Coinbase wasn't going to enable BCH trading was either in denial or not paying attention.
hendzen 9y ago
> Once supported, customers will be able to withdraw bitcoin cash. We’ll make a determination at a later date about adding trading support. It's the trading support part that was not public, and that part is very important as it significantly widens the population of people who can easily purchase BCH.

cohnnton 9y ago

Yes, YCombinator, you should be proud; you've made a giant money sucking machine that will suck money out of clueless millennials, poor grandmas, and well, mainstream idiots. Here's to no government regulations!!

conanbatt 9y ago

I have generally mixed feelings about insider trading, because in the end, people making decisions on best information looks like economically profitable for the system. That said, Coinbase did more than insider trading today, they deliberately hid their BCash announcement to perform insider trading. That is straight down fraud to me. They provoked the insider trading situation.

autokad 9y ago
if you watched the interview on fast money, you could tell they were going to start trading bit coin cash. obviously he couldnt come out and say it, but it seemed pretty apparent to me.
erentz 9y ago
This is what bothers me the most. Coinbase previously had indicated only withdrawals would be enabled by Jan 1st, which means they'd have a form where you could claim your BCH and have it sent to your private wallet address. Somehow this turned into "Actually we'll allow full trading. And surprise! We're not even going to tell you about it despite working on it for months, we'll just unleash it on a random Tuesday evening."
- fpisfun 9y ago
  Definitely not possible to buy it today on coinbase as far as I can tell
mrb 9y ago
What evidence do you have they performed insider trading? There is none. You are just speculating.
- conanbatt 9y ago
  You are putting the burden of proof on an individual with no information access to coinbases operations. At the court of public opinion (or consumer opinion in this case), the appearance of corruption is enough to condemn. Its pretty clear something happened because there was quite a commotion hours before it happened, which means market makers knew it was coming. I have documented message sbefore the coinbase announcement that something weird was going on, and so has the community. Not only that, coinbase gave the appearance of neutrality when it deliberately lied on release date and scope of release. For what purpose but to take advantage of the information arbitrage. Coinbase sold its users today and as a portion of the community has been vocal about, I recommend leaving coinbase to another exchange that hasn't proven to screw over their users.

pmorici 9y ago

Coinbase prohibited employees from trading BCH in the weeks leading up to this according to their twitter.

gtrubetskoy 9y ago
Exactly how do you "prohibit" trading a crypto currency?
- pmorici 9y ago
  How does any company prohibit anything?
  - hendzen 9y ago
    For insider trading on the US equities or options markets, the SEC has surveillance tools that flag unusual short term gains around corporate actions, and then check if any of the counterparties are insiders or related to insiders via marriage, etc. Don't think anything on that level is being done in the cryptocurrency space. Obviously a company has to trust its employees to a certain degree but it is certainly easier to conceal cryptocurrency holdings compared to a holdings of a traditional security.
  - overcast 9y ago
    Insider trading laws.
  - notyourday 9y ago
    Surveillance + exchange audits + preservation of all communication.
  - gtrubetskoy 9y ago
    The way it's usually done in the US is employees have a special brokerage account which is closely monitored (and probably won't let you trade during blackouts). Even if you had your own account on the side, the brokers would have caught it - this stuff is monitored very closely. When it comes to crypto - all you need is an offshore exchange, of which there are plenty. In all honesty, I don't know what is going on at Coinbase. It looks like a circus and I suspect its days are numbered. It is really depressing actually, not at all what the crypto community needs right now.

maram 9y ago

this move by coinbase will prompt the gov to regulate trading cryptocurrency, which will lead to further legitimization of cryptocurrency..

hendzen 9y ago
so what you're telling me... is that this is good for Bitcoin?
- pmorici 9y ago
  Cash
- maram 9y ago
  I'm telling you that this is good for legitimizing cryptocurrency and its trading overall. And when when so many people start to perceive cryptocurrency as a legitimate currency, the price will eventually go up for bitcoin. This is an early stage mainstream...
  - spookthesunset 9y ago
    > And when when so many people start to perceive cryptocurrency as a legitimate currency, the price will eventually go up for bitcoin. Bitcoin doesn't work as a currency. It's slow, expensive and can never ever scale to handle even the needs of a small town. > This is an early stage mainstream... Keep dreaming.
    - maram 9y ago
      >Bitcoin doesn't work as a currency No cryptocurrency is working as a currency today. >Keep dreaming. its not functioning as a currency..no cryptocurrency's has a stable intrinsic value because not many people are using it as a currency YET. Everyone is trading cryptocurrencies, and it will continue like that to attract more people. the price will be stable when: 1. people outside the tech real start using it as a currency to buy stuff with (not to cash it) 2. the technology is still so expensive. its like the internet and hotmail back in 1996..you can argue whether it was a mainstream or an early stage mainstream..it all depends on your "perception"

f2n 9y ago

Per their twitter, "Coinbase employees have been prohibited from trading in Bitcoin Cash for several weeks." https://twitter.com/coinbase/status/943290391419174912 https://twitter.com/coinbase/status/943290391419174912

verroq 9y ago
That totally stopped everyone I am sure.
sergiotapia 9y ago
Pinky promise!
paulie_a 9y ago
And there was no abuse for financial gain and everyone lived happily ever after
- ringaroundthetx 9y ago
  bahahaha please write my children's bedtime stories
  - paulie_a 9y ago
    First book: "The cat in the hat loses his hat" a story of crypto currency
    - adjkant 9y ago
      That has to be the second one actually. "The cat in the hat puts his hat on the blockchain"
dheera 9y ago
So have your SO/friend/etc. buy a bunch of it and slip you a gift card as a Christmas present? There's no law banning insider trading; Coinbase cannot really enforce anything beyond their own contractually-bound employees. I actually find it interesting/relieving to have a market where insider trading is legal. If you got your hands on inside information, more power to you! In the stock market, insider trading being illegal effectively only helps institutions who are already rich, have access to high-frequency trading, effectively do insider trading anyway and get away with it, and puts the average Joes sitting at home with an eTrade account at a distinct disadvantage. There are things that cryptocurrencies could do to avoid insider trading becoming abused. For example, ensure that larger trades take a long time. Trades of 1000 BTC should require days to execute, while trades of 0.1 BTC should execute in milliseconds. That would help de-throne the hedge funds of the world who have access to more information than average Joe can process, and empower average Joes to leverage everything they know, without messing up the market dynamics for small quantities.

agorabinary 9y ago

There is a huge amount of non-public information out there that insiders can use for profit, and it will always be the case no matter what regulations you enforce.

TaylorGood 9y ago

It wasn't a given the announcement would skyrocket BCH, however, I'd be shocked if anyone at Coinbase wasn't extremely successful with Crypto right now. The fringe benefit of being in an environment where they breath cryptocurrency is digital gold, or at least a strong multiple of their salaries.

rvern 9y ago

Gotta love unregulated markets indeed! Insider trading makes markets more efficient by moving the market price closer to the postdisclosure price. That is good; contrary to Chesterton's fence, most market regulations with plausible-sounding reasoning justifying them do not have a good reason to exist as they outrun mainstream understanding of economics—which should not be confused with the opinions of regulators or even polls of professional economists. From the article on insider trading in The Concise Encyclopedia of Economics: > Who benefits from regulation of insider trading? One group of beneficiaries is market professionals—broker-dealers, securities analysts, floor traders, arbitrageurs, and institutional investors. The reason is that they are “next in line” for trading profits, as they possess an advantage over public investors in collecting and analyzing information (Haddock and Macey 1987). Regulation also, of course, benefits the regulators—that is, the SEC—by giving that agency greater power, prestige, and budget (Bainbridge 2002). However, the benefits from insider trading laws to small shareholders, the alleged primary beneficiaries, have been extensively debated. From www.econlib.org/library/Columns/y2015/Hooperharmed.html: > Insider trading laws are yet another example of government's desire to capture and exercise political, regulatory and legal power, gain huge monetary awards, and garner favorable PR, all for the sake of prosecuting victimless "crimes" and promoting misplaced notions of fairness. Insider trading should be embraced for its beneficial effects on market efficiency and left as a private matter for those companies interested in preventing it. Consequently, the SEC should not have a leading role in insider-trading cases, especially if the purpose is to benefit one group of insiders at the expense of another.

quikoffs 9y ago

Looks like coinbase chief executive saw your post ;P https://news.ycombinator.com/item?id=15969102 https://news.ycombinator.com/item?id=15969102 From the link's tfa > The company's chief executive intervened after several market watchers posted allegations of illegal activity on social media sites.