10 ms·

Who is the victim here?

• idiotsecant 4y ago
  The victim of insider trading is everyone else participating in the market that is not insider trading. Which, given the widespread reliance on 401k's for most of our accumulated wealth, is all of us.
  • j0hnyl 4y ago
    But crypto is not an equity and your 401k is not tied up in it at all?
• munificent 4y ago
  It is a shared good that benefits all participants for a market to be efficient. Insider trading reduces market efficiency.
  • siftrics 4y ago
    It literally does the opposite. It pushes the price in the direction it's going to go when the information is made public.
    • munificent 4y ago
      You're only thinking of the first-order effect. If insider trading is allowed then, yes, those who have access to inside information can trade on it more efficiently. But it also highly incentivizes market participants to hide information. In a world where insider trading is allowed, anyone who has access to inside information can now personally monetize it as long as that information does not get out to the wider market. You're basically paying people to manufacture information asymmetry. As an emergent effect, that does not lead to the widely available information needed for a market to perform efficiently.
      • siftrics 4y ago
        How will they profit if the information never becomes public?
        • munificent 4y ago
          ...by insider trading on it.
          • siftrics 4y ago
            Why would the price move in their favor if the information never becomes public?
• tylersmith 4y ago
  Coinbase. It's in the indictment.
  • j0hnyl 4y ago
    Maybe I'm dense... but how does Coinbase lose money from this?