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CFTC charges two individuals with multi-million digital asset pump-and-dump
- snypher 6y ago"Two individuals" - one is John McAfee, and for pumping Dogecoin? "As is typical of pump-and-dump schemes, they secretly accumulated a position in a digital asset through bitcoin trading in anticipation of price spikes following McAfee’s misleading public endorsements on social media." $2M is small fry - I wonder how much DOGE Elon Musk holds, and how his, or anyones behavior towards these speculative coins is any different.
- glsdfgkjsklfj 6y agoThe difference with Elon and McAfee is that Elon (and the paypal mafia) have white collar crime in their DNA. Paypal growth held a 1:1 correlation with online prescription drug scam (or online prescription crime rings, depending who you ask). McAfee is the lowest amateur compared to those guys.
- kube-system 6y ago> Paypal growth held a 1:1 correlation with online prescription drug scam (or online prescription crime rings, depending who you ask). And they were both caused by an increase in.... people using the internet.
- wpietri 6y agoI agree with your point. But Paypal was notorious for poor controls early on. I have to wonder how much VC money that officially went to Paypal actually ended up being seed money for online criminals of many stripes.
- Permit 6y ago> Paypal growth held a 1:1 correlation with online prescription drug scam (or online prescription crime rings, depending who you ask). This correlation is about as compelling as these ones: https://www.tylervigen.com/spurious-correlations https://www.tylervigen.com/spurious-correlations
- glsdfgkjsklfj 6y agoexcept paypal being the payment choice and making lots of early concessions to work with those companies in their early days is a well documented fact. They would not have gotten off the ground in the early days without it. oh, and pirates and global warming the canonical reference for your point around here :)
- tyingq 6y ago"and for pumping Dogecoin?" I double-checked that it wasn't an Onion story. Who was plausibly pumped or dumped for a joke currency? Though, I guess with a market capitalization of $5,382,875,000 the joke was already out of hand.
- divbzero 6y agoDogecoin must be priciest joke in history.
- cwkoss 6y agoMaybe the priciest intentional joke
- zamalek 6y agoDoge is more abundant than Bitcoin and is easier to mine, so it does have functional differences from Bitcoin. Some people may value those functional differences, so it isn't entirely a joke.
- joshspankit 6y agoThere were literally thousands of shitcoins at the time that can also be more abundant and easier to mine.
- 1996 6y agoIt's now widely trade and accepted, with many pairs and a low price. It's ideal to move funds, so it does serve a purpose now. Or at least, it did, as it's clearly being manipulated: check the price and notice how, despite the strong changes in BTC/USD prices, the DOGE/BTC has been extremely stable slightly above 1*10^-6 which is extremely abnormal, and indicates someone with deep pockets is keeping the psychological price (like BCH/BTC but for different reason: someone decided it would never go below 0.1!) This means the DOGE pump is just starting, as it is an often used trick to create positive attention: it ensures a matching performance for BTC/USD and DOGE/USD which is what influenceable people need to see to believe in a pump (a coin growing faster than BTC in USD terms will be seen in the 2nd phase of the pump)
- walrus01 6y agoI guess this means John McAfee won't be eating his own genitalia, as he promised? http://dickening.com/ http://dickening.com/
- warent 6y agoAm I a prude? idk why I've never found this kind of humor funny
- lquist 6y agoI don't believe Elon is selling
- byset 6y agoI wonder how much DOGE Elon Musk holds, and how his, or anyones behavior towards these speculative coins is any different. So you're speculating that the world's richest man (give or take) risked a felony conviction by running an illegal Dogecoin pump-and-dump scheme? Is that right? I'd wager that Musk's Doge-pumping buffoonery is more of a hobby than a revenue-generating side gig. If he ends up in federal prison, It'll be for cooking Tesla's books.
- fny 6y agoSecond this. I don't think he owns any asset he promotes besides TSLA. The rest are clearly for the lulz.
- xtracto 6y agoCan someone do a crime even if they don't mean to? Like, maybe he did not want to take advantage of that but his actions resulted on him pumping DOGE. Something like the difference between involuntary manslaughter and murder?
- Red_Leaves_Flyy 6y agowhen a rich person tweets something and makes a ton of money it's market manipulation. When a hedge fund tells a journo to write an article it's business as usual. To be clear: I think both are worthy of the same scrutiny. The double standard is what bothers me.
- ganoushoreilly 6y agohell, i'd argue being rich isn't even the qualifier. I'd say it's anyone that's not a part of that financial system. The powers that be in finances are nervous, the things that gave them advantage and the edge, some legit, some not, are all becoming increasingly available to retail. Mean while we allow stock shorts.. and failures to deliver to constantly roll over or be hidden in sneak behind closed door actions.
- Red_Leaves_Flyy 6y agoMy problem with shorts is that FTDs are not punished. The punishment for a hedge fund, or other large financial firm should be painful. CEO throwing temper tantrums on Bloomberg painful. Not crippling or debilitating, but just painful enough to make these bag holders think about the potential consequences of their actions before they short. An FTD should have an automatic fine and liquidation event to allow immediate delivery. When I don't pay my bills my services get cut off and I get fined. Favourably treating company failures differently than consumers is about as anti-capitalist as things can get. This dichotomy is prima facie evidence that the stock market has been designed to be in favor of whoever has the biggest bag of cash/deepest rolodex and against the American people who despite our massive exposure to the markets have virtually no say in their operations nor the individual companies therein.
- ganoushoreilly 6y agoI agree 100%
- nickysielicki 6y agoNeither deserves any scrutiny. So long as influential people exist, there will exist opportunities to profit off that influence. Forbidding this fully is impossible, which means that criminalizing it just makes unfair selective enforcement possible. This isn't justice, it's getting caught with your hand in the communal rich-influencer cookie jar. Legalize insider trading, legalize pump and dumps, let the chips fall where they may. It's happening either way, so lets just be honest about it.
- mrtweetyhack 6y agoIdiots deserve to be relieved of their money
- sneak 6y ago> “Manipulative and fraudulent schemes, like that alleged in this case, undermine the integrity and development of digital assets and cheat innocent people out of their hard-earned money,” said Acting Director of Enforcement Vincent McGonagle. Even if they explicitly conducted a pump-and-dump, nobody was cheated here. There doesn't need to be a disclosure notice on shitcoin shilling for a reasonable person to assume that it is a risky investment that may result in 100% lows. Meanwhile, thousands are engaging in this exact behavior and going unprosecuted. The fact that these specific people were chosen for the enforcement of this specific not-crime is, to me, highly suspect.
- gruez 6y ago>There doesn't need to be a disclosure notice on shitcoin shilling for a reasonable person to assume that it is a risky investment that may result in 100% lows. Where do you draw the line? If "shitcoins" are open season for fraudsters, what's next? micro-cap/penny stocks? gamestop/hertz?
- vmception 6y agothe agency involved has no jurisdiction, unless Congress recently changed something. there is nothing to see here. this has nothing to do with anyone's opinions on what happened, the people exercising that opinion don't have the authority to. next!
- PragmaticPulp 6y ago> Even if they explicitly conducted a pump-and-dump, nobody was cheated here. A pump-and-dump is a scheme designed to cheat people. The cheat is to deliver misleading statements to convince others to purchase something, while quietly doing the opposite of what you're promoting. Pump and dump schemes are a well-known type of fraud: https://www.investopedia.com/terms/p/pumpanddump.asp https://www.investopedia.com/terms/p/pumpanddump.asp > Meanwhile, thousands are engaging in this exact behavior and going unprosecuted. That doesn't make this right. We can't catch and prosecute everyone, but that doesn't mean we can't catch and prosecute anyone.
- deleted 6y ago[deleted]
- vmception 6y agoCFTC doesn't have jurisdiction over this. They only regulate derivatives and verrrry limited authority over spot market activity that affects derivatives. As this is in coordination with DOJ and the SEC, this is just tacked on to see what sticks. I don't see the securities fraud (SEC) or the commodities fraud (CFTC) sticking. Therefore, I don't see the money laundering or wire fraud or the associated conspiracy charges sticking either. Unless they traded Greyscale ETFs or some other unregistered security, which would be a dumb and illiquid way to trade fairly liquid spot assets. The spot markets are regulated like products. So this is a FTC issue, too bad they have no teeth. But the FTC knows what digital assets are too.
- VHRanger 6y agoNY supreme court ruled that tether was covered under commodities law last year, so CFTC can have it stick. Crypto is either a commodity, or a security. It's not outside the law
- vmception 6y agoCFTC is a federal agency, they regulate commodity derivatives, not commodities, a New York court doesn't evolve the case law for a federal agency. And none of this has anything to do with "crypto being recognized as a particular asset class". Nobody is arguing about the CFTC saying crypto is a commodity, the CFTC has limited powers in what they can do with something being a commodity because they regulate commodity derivatives. here is something that shows the current state of the CFTC's authority being unresolved by federal courts, specifically regarding spot commodities https://www.skadden.com/insights/publications/2018/10/recent-court-decisions-shine-spotlight https://www.skadden.com/insights/publications/2018/10/recent...
- wmf 6y agoCFTC has had jurisdiction over crypto for a while but if anyone was going to challenge that I could imagine McAfee being the one.
- vmception 6y ago
- lavezzi 6y agoCan someone tell me how this differs from what McAfee 2.0 (Michael Saylor) is doing as we speak?
- sgpl 6y agoIt differs in that: he's not dumping it and his company is following proper public disclosure guidelines.
- lavezzi 6y ago1) MicroStrategy is taking a substantial position in BTC before disclosing publicly. Subsequently he is on a PR tour de force telling everyone and their mother that they need to invest in BTC. That seems pretty similar to what McAfee was doing. 2) On 2-12-21, MicroStrategy transferred 50,000 shares of Class A company stock to Alcantara LLC, of which Saylor is the sole owner. Until that date Alcantara hadn’t received any MicroStrategy stock, or any other securities, since March 2012. These 50,000 shares have been transferred by the LLC "as a gift" to a charitable foundation for no consideration. What evidence do you have that he isn't "dumping" it?
- sgpl 6y agoI'm sorry but how's transferring his company stock to some LLC evidence of dumping? This is done all the time for a litany of reasons. Anyways since you want evidence, you're welcome to check the company's disclosures to see that they aren't dumping bitcoin, in fact they seem to be buying more [1]. This disclosure is from today (5th March 2021). As for the gift of shares to a charitable foundation, Michael Saylor has been funding the Saylor Academy [2] since 1999 so it seems like it very well could be for that or another valid charitable cause. It's also not evidence of dumping. [1] https://www.microstrategy.com/en/investor-relations/financial-documents/microstrategy-acquires-additional-10m-in-bitcoin-at-average-price-of-48-888_03-05-2021 https://www.microstrategy.com/en/investor-relations/financia... [2] https://en.wikipedia.org/wiki/Saylor_Academy https://en.wikipedia.org/wiki/Saylor_Academy
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- worik 6y agoNot a surprise. A cryptocurrency scam. John McAfee scamming.
- miguelmota 6y agoDecember 2017 were crazy times in crypto. John McAfee would promote a "Coin of the day" for like two weeks straight and the price would sky rocket immediately. People had bots to watch for his tweets to programmatically place market buys on exchanges right away before the pump in price from flood of people buying the coin.
- 99_00 6y agoTo make the old school scams believable you need to wrap it in some high tech story that people believe but don't understand.