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Coinbase to Pay $6.5M for False, Misleading, or Inaccurate Reporting and Trading

42 points by huntermeyer 6y ago

w-ll 6y ago
Is that really the CFTCs logo? Stars and Bars only go up!
- riffraff 6y ago
  It's a really cool logo!
- chews 6y ago
  everyone holds merka's bags.
brian_herman 6y ago
Is this another fine or the same one that was posted recently?
- wmf 6y ago
  The same one.
asdfasgasdgasdg 6y ago
Previously: https://news.ycombinator.com/item?id=26519867 https://news.ycombinator.com/item?id=26519867
crazydoggers 6y ago
Dupe. https://news.ycombinator.com/item?id=26519867 https://news.ycombinator.com/item?id=26519867
vmception 6y ago
Notice: the CFTC's primary jurisdiction comes from the fact that Bitcoin futures products rely on Coinbase's spot market activity. Congress recently gave the CFTC some limited power to regulate spot market trading practices directly. But in general, the federal government does not regulate private property, only certain kinds of investment contracts (securities and futures). These new powers of the CFTC are untested and but does embolden them to analyze spot market activity more in an effort to enforce their more time tested regulatory ability in the futures market. It is why the CFTC bothers to mention the following: "Reporting firms such as Crypto Facilities Ltd., which publishes the CME Bitcoin Real Time Index, and CoinMarketCap OpCo, LLC, which posts such transactional information on its website, received access to Coinbase’s transactional information via Coinbase’s Application Programming Interface, while the NYSE Bitcoin Index, received it directly in transmissions from Coinbase." But the newer powers are why they also mention that it was happening in the Litecoin market too. So its a mixture of "while we're at it, lets talk about these other markets that don't have derivatives and rope that in, but lets not make a case specifically about that" I'm glad the CFTC has the ability and assertiveness now to make a statement like this. There are some rampant shady practices from all exchange players in the crypto space. I am really glad how well the US-based ones have improved, but I'm still surprised about what is considered normal.
- ErikVandeWater 6y ago
  > I'm glad the CFTC has the ability and assertiveness now to make a statement like this. With how small the fine is, it's more of a statement that cheating pays (not that wasn't already the case).
  - vmception 6y ago
    Yeah it really gives confidence for the ipo and shareholders that this is out of the way now $100,000,000,000 with the expectation of further profit
dheera 6y ago
Have the community drum up Bitcoin's price so they can compensate for the fine? The CFTC should have no authority over cryptocurrency. Set up an angry Reddit mob and pull a GME on BTC every time someone gets fined.
dmoy 6y ago
For anyone like me who had no context as to whether $6.5M is a lot or a little, it's 1.8% of their 2020 profit. So, actually I still have no idea if that's a lot or a little. But at least I know a couple numbers.
sabujp 6y ago
slaps on the wrist. Where's the prison time?
chews 6y ago
basically illegally washtrading to themselves to get price advantage and hold an asset they long term belived in and sold to later holders of said bags.... if you think bitcoin is a bag. ymmv... this isn't advice.
Uptrenda 6y ago
Unfortunately, exchanges like Coinbase still ironically help prevent more attacks when it comes to asset pricing (decentralized match making is ah... not that secure or sane.) Potentially you could build something like the equivalent of Transfer Wise but for placing orders on exchanges if you don't trust that a certain exchange as playing fair. The meta exchange would have accounts on all major exchanges with USD and BTC balances. When you place orders, it trades from its balance on other exchanges, maybe splitting them up between multiple sites. The exchange would then instantly credit your balance when orders were filled and track who owned what on its backend (which would only hold BTC and USD deposits -- no trading engine.) Could work really well if you kept wallets well stocked. Am half asleep here. Prob already done. I know there are programs for managing multiple user accounts. But anyone doing something like the above? Would sure be useful I imagine

42 points by huntermeyer 6y ago

w-ll 6y ago

Is that really the CFTCs logo? Stars and Bars only go up!

riffraff 6y ago
It's a really cool logo!
chews 6y ago
everyone holds merka's bags.

brian_herman 6y ago

Is this another fine or the same one that was posted recently?

wmf 6y ago
The same one.

asdfasgasdgasdg 6y ago

Previously: https://news.ycombinator.com/item?id=26519867 https://news.ycombinator.com/item?id=26519867

crazydoggers 6y ago

Dupe. https://news.ycombinator.com/item?id=26519867 https://news.ycombinator.com/item?id=26519867

vmception 6y ago

Notice: the CFTC's primary jurisdiction comes from the fact that Bitcoin futures products rely on Coinbase's spot market activity. Congress recently gave the CFTC some limited power to regulate spot market trading practices directly. But in general, the federal government does not regulate private property, only certain kinds of investment contracts (securities and futures). These new powers of the CFTC are untested and but does embolden them to analyze spot market activity more in an effort to enforce their more time tested regulatory ability in the futures market. It is why the CFTC bothers to mention the following: "Reporting firms such as Crypto Facilities Ltd., which publishes the CME Bitcoin Real Time Index, and CoinMarketCap OpCo, LLC, which posts such transactional information on its website, received access to Coinbase’s transactional information via Coinbase’s Application Programming Interface, while the NYSE Bitcoin Index, received it directly in transmissions from Coinbase." But the newer powers are why they also mention that it was happening in the Litecoin market too. So its a mixture of "while we're at it, lets talk about these other markets that don't have derivatives and rope that in, but lets not make a case specifically about that" I'm glad the CFTC has the ability and assertiveness now to make a statement like this. There are some rampant shady practices from all exchange players in the crypto space. I am really glad how well the US-based ones have improved, but I'm still surprised about what is considered normal.

ErikVandeWater 6y ago
> I'm glad the CFTC has the ability and assertiveness now to make a statement like this. With how small the fine is, it's more of a statement that cheating pays (not that wasn't already the case).
- vmception 6y ago
  Yeah it really gives confidence for the ipo and shareholders that this is out of the way now $100,000,000,000 with the expectation of further profit

dheera 6y ago

Have the community drum up Bitcoin's price so they can compensate for the fine? The CFTC should have no authority over cryptocurrency. Set up an angry Reddit mob and pull a GME on BTC every time someone gets fined.

dmoy 6y ago

For anyone like me who had no context as to whether $6.5M is a lot or a little, it's 1.8% of their 2020 profit. So, actually I still have no idea if that's a lot or a little. But at least I know a couple numbers.

sabujp 6y ago

slaps on the wrist. Where's the prison time?

chews 6y ago

basically illegally washtrading to themselves to get price advantage and hold an asset they long term belived in and sold to later holders of said bags.... if you think bitcoin is a bag. ymmv... this isn't advice.

Uptrenda 6y ago

Unfortunately, exchanges like Coinbase still ironically help prevent more attacks when it comes to asset pricing (decentralized match making is ah... not that secure or sane.) Potentially you could build something like the equivalent of Transfer Wise but for placing orders on exchanges if you don't trust that a certain exchange as playing fair. The meta exchange would have accounts on all major exchanges with USD and BTC balances. When you place orders, it trades from its balance on other exchanges, maybe splitting them up between multiple sites. The exchange would then instantly credit your balance when orders were filled and track who owned what on its backend (which would only hold BTC and USD deposits -- no trading engine.) Could work really well if you kept wallets well stocked. Am half asleep here. Prob already done. I know there are programs for managing multiple user accounts. But anyone doing something like the above? Would sure be useful I imagine