8 ms·

There must be 1,000 cases like this for every one that is prosecuted. The crypto community did the research / job for the FBI here.

hamiltonians 4y ago
not really. how many nft marketplaces are as big as opensea? this was a big target.
practice9 4y ago
This is one of the benefits of the transaction data being on-chain
- colejohnson66 4y ago
  Supposedly Monero is better at being anonymous than Bitcoin/Etherium, but NFTs are all on Etherium
  - ChainOfFools 4y ago
    Most, not all. A few of the earliest (appearing before the term NFT existed) run on Bitcoin itself, using the counterparty protocol.
  - chrisco255 4y ago
    Monero can't do smart contracts as far as I know. However there is somewhat of a push to adopt privacy focused zero knowledge rollups, which would preserve privacy while settling on a layer 2: https://aztec.network/ https://aztec.network/
- rvz 4y ago
  There you go. This is why committing insider NFT trading using a public blockchain where the transactions are traceable where the authorities can use that and the transactions all end up being connected to this employee (even though they tried using multiple wallets) is quite futile and eventually they can be traced all up. Goes to show that such blockchains like Bitcoin, Ethereum, etc are NOT anonymous and never intended it to be as such in their white-papers. So it's quite disingenuous for anyone to keep suggesting that they are 'anonymous' whether or not if they are skeptic, supporter or neither. What you are looking for is privacy coins like Monero, Mobilecoin, Zcash or Grin that specifically aim for privacy guarantees which are used to hide wallet balances and transaction details. But the regulators are going to crackdown on privacy ones anyway by making it harder to trade them for fiat via exchanges.
  - ceeplusplus 4y ago
    No, this guy was just dumb enough to buy the NFTs mere minutes before they were listed. That's blatantly obvious insider trading. If he had not been so obvious and maybe better laundered his money through e.g. Tornado Cash then he would've gotten away with it.
    - exdsq 4y ago
      I doubt he thought it was illegal
  - practice9 4y ago
    I agree. Adding to a point about privacy coins - zk-SNARKS or zk-STARKS can be implemented on Ethereum via L2 rollups for those who need privacy/non-traceability. But probably not on a base layer.
- cuteboy19 4y ago
  It's pseudonymous. You don't get to know who it is until that person tells you their name
berberous 4y ago
Well, that’s the point of these cases. This guy is (unfortunately for him) being made an example of, with a potentially very harsh sentence, in order to scare away the other 999. The next guy in his shoes will think twice.
- nradov 4y ago
  The next guy will put his shoes in a country without an extradition treaty and not even think once. And honestly I don't even blame the scammers. Anyone stupid enough to buy an NFT deserves to get scammed.
  - berberous 4y ago
    You are just ranting about things irrelevant to this story. Nate is not a scammer, but was a product manager at a very successful A16Z-backed startup. He is the type of guy that was already going to be successful and wealthy, but decided to make a little more after incorrectly assuming that either (x) what he was doing wasn't illegal since he wasn't trading stocks or (y) the government wasn't looking into this type of thing. The DOJ is now disincentivizing others in his shoes from following the same path. This type of person was never going to move to a random country without extradition to straight up scam people.[0] Your comment is akin to someone saying it's a waste of time to charge a US F500 employee or hedge fund employee with insider trading since a true scammer would just be sending phishing emails from Russia. They are different types of crimes and criminals, and I think for this type of crime/criminal, there is a deterrence effect to these cases. And regardless of your view on NFTs, nobody was scammed here, he just front-ran to make a profit and used confidential information of his employer to do that. This is akin to a production intern for Jim Cramer buying stocks that he knows Jim will talk about on his show that evening, to profit from any short-term pump from the exposure. [0] I don't actually know Nate or any of the details here, so I am assuming, but this is the sense I get from following this drama on Twitter.
    - FrenchDevRemote 4y ago
      "This is akin to a production intern for Jim Cramer buying stocks that he knows Jim will talk about on his show that evening, to profit from any short-term pump from the exposure." Is that actually insider trading?really not sure...

hamiltonians 4y ago

not really. how many nft marketplaces are as big as opensea? this was a big target.

practice9 4y ago

This is one of the benefits of the transaction data being on-chain

colejohnson66 4y ago
Supposedly Monero is better at being anonymous than Bitcoin/Etherium, but NFTs are all on Etherium
- ChainOfFools 4y ago
  Most, not all. A few of the earliest (appearing before the term NFT existed) run on Bitcoin itself, using the counterparty protocol.
- chrisco255 4y ago
  Monero can't do smart contracts as far as I know. However there is somewhat of a push to adopt privacy focused zero knowledge rollups, which would preserve privacy while settling on a layer 2: https://aztec.network/ https://aztec.network/
rvz 4y ago
There you go. This is why committing insider NFT trading using a public blockchain where the transactions are traceable where the authorities can use that and the transactions all end up being connected to this employee (even though they tried using multiple wallets) is quite futile and eventually they can be traced all up. Goes to show that such blockchains like Bitcoin, Ethereum, etc are NOT anonymous and never intended it to be as such in their white-papers. So it's quite disingenuous for anyone to keep suggesting that they are 'anonymous' whether or not if they are skeptic, supporter or neither. What you are looking for is privacy coins like Monero, Mobilecoin, Zcash or Grin that specifically aim for privacy guarantees which are used to hide wallet balances and transaction details. But the regulators are going to crackdown on privacy ones anyway by making it harder to trade them for fiat via exchanges.
- ceeplusplus 4y ago
  No, this guy was just dumb enough to buy the NFTs mere minutes before they were listed. That's blatantly obvious insider trading. If he had not been so obvious and maybe better laundered his money through e.g. Tornado Cash then he would've gotten away with it.
  - exdsq 4y ago
    I doubt he thought it was illegal
- practice9 4y ago
  I agree. Adding to a point about privacy coins - zk-SNARKS or zk-STARKS can be implemented on Ethereum via L2 rollups for those who need privacy/non-traceability. But probably not on a base layer.
cuteboy19 4y ago
It's pseudonymous. You don't get to know who it is until that person tells you their name

berberous 4y ago

Well, that’s the point of these cases. This guy is (unfortunately for him) being made an example of, with a potentially very harsh sentence, in order to scare away the other 999. The next guy in his shoes will think twice.

nradov 4y ago
The next guy will put his shoes in a country without an extradition treaty and not even think once. And honestly I don't even blame the scammers. Anyone stupid enough to buy an NFT deserves to get scammed.
- berberous 4y ago
  You are just ranting about things irrelevant to this story. Nate is not a scammer, but was a product manager at a very successful A16Z-backed startup. He is the type of guy that was already going to be successful and wealthy, but decided to make a little more after incorrectly assuming that either (x) what he was doing wasn't illegal since he wasn't trading stocks or (y) the government wasn't looking into this type of thing. The DOJ is now disincentivizing others in his shoes from following the same path. This type of person was never going to move to a random country without extradition to straight up scam people.[0] Your comment is akin to someone saying it's a waste of time to charge a US F500 employee or hedge fund employee with insider trading since a true scammer would just be sending phishing emails from Russia. They are different types of crimes and criminals, and I think for this type of crime/criminal, there is a deterrence effect to these cases. And regardless of your view on NFTs, nobody was scammed here, he just front-ran to make a profit and used confidential information of his employer to do that. This is akin to a production intern for Jim Cramer buying stocks that he knows Jim will talk about on his show that evening, to profit from any short-term pump from the exposure. [0] I don't actually know Nate or any of the details here, so I am assuming, but this is the sense I get from following this drama on Twitter.
  - FrenchDevRemote 4y ago
    "This is akin to a production intern for Jim Cramer buying stocks that he knows Jim will talk about on his show that evening, to profit from any short-term pump from the exposure." Is that actually insider trading?really not sure...