4 ms·

>What's the financial incentive for a company to actually enforce "insider trading" rules to its employees? E.g. for Coinbase/Binance the financial incentive i

by Tenoke 4y ago

>What's the financial incentive for a company to actually enforce "insider trading" rules to its employees? E.g. for Coinbase/Binance the financial incentive is that users might invest less in their offerings if they consistently do worse when participating there compared to initial offerings elsewhere or simply due to seeing proof of it. Similar/related rules might disincentivize insider trading for the projects themselves if insider trading is harmful in the first place which I am not sure of. If it is, and the common arguments that it leads to less outside investments are true then that should at least partially incentivize long-term thinking projects against it. Further, Coinbase/Binance have the incentive to dissuade projects from taking advantage of the information and as far as I know indeed try to though I guess their success is mixed.

usui 4y ago
> E.g. for Coinbase/Binance the financial incentive is that users might invest less in their offerings if they consistently do worse when participating there compared to initial offerings elsewhere or simply due to seeing proof of it. Aside from bad PR spreading like wildfire, won't market participants noticing their poorer performance present as a negligible quantity and be written off as bad luck because the volume accounted for by company employees is too small to make a dent? If I understand correctly, for a long time, Redditors in WallStreetBets said they were too small to make a dent in stocks, but it was only because of the run-off effect of being a public forum that GME exploded and garnered attention. I figure that a company with employees that can do things quietly and in an unmonitored, unregulated fashion wouldn't run into people noticing it unless they got stupid and grew it out of proportion.
- Tenoke 4y ago
  Maybe if the information didn't get out but given that a lot of it happens on-chain you get articles like this so more of them start suspecting that's the reason for their poor returns.

by Tenoke 4y ago

usui 4y ago

> E.g. for Coinbase/Binance the financial incentive is that users might invest less in their offerings if they consistently do worse when participating there compared to initial offerings elsewhere or simply due to seeing proof of it. Aside from bad PR spreading like wildfire, won't market participants noticing their poorer performance present as a negligible quantity and be written off as bad luck because the volume accounted for by company employees is too small to make a dent? If I understand correctly, for a long time, Redditors in WallStreetBets said they were too small to make a dent in stocks, but it was only because of the run-off effect of being a public forum that GME exploded and garnered attention. I figure that a company with employees that can do things quietly and in an unmonitored, unregulated fashion wouldn't run into people noticing it unless they got stupid and grew it out of proportion.

Tenoke 4y ago
Maybe if the information didn't get out but given that a lot of it happens on-chain you get articles like this so more of them start suspecting that's the reason for their poor returns.