4 ms·

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 t

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 4y ago
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 4y ago
  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 4y ago
  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.

skybrian 4y ago

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 4y ago
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 4y ago
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.