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If you read the actual SEC filing, you'll note that they're only filing for 7 of the alleged 25 coins that he traded. [1] Even the SEC agrees that this was not

If you read the actual SEC filing, you'll note that they're only filing for 7 of the alleged 25 coins that he traded. [1] Even the SEC agrees that this was not insider trading in all 25 instances. "Throughout the relevant period, Nikhil and Ramani repeatedly traded ahead of Coinbase listing announcements, trading in at least 25 tokens. At least seven of the listing announcements described above involved crypto asset securities" 1 - https://www.sec.gov/litigation/complaints/2022/comp-pr2022-127.pdf https://www.sec.gov/litigation/complaints/2022/comp-pr2022-1...

iskander 4y ago
Is there a list of all 25 somewhere? This could provide some illumination on what SEC does and does not consider a security.
- modeless 4y ago
  Or maybe the SEC considers all of them securities but thought that they had the strongest case for these seven and didn't want the distraction of arguing about the other 18. But yeah, would be interesting to see the list.
  - astrange 4y ago
    If SEC considers any of them securities, it's very strange for them to go after a single guy at Coinbase and not the entire company, since they've just declared them an illegal securities exchange. (As opposed to an illegal commodities exchange for bitcoin.)
    - dleavitt 4y ago
      I think maybe it's only strange if you assume the SEC has unlimited money and time. Grandparent comment says it better, but they're likely focusing on cases they think are pretty clear-cut.
      - iskander 4y ago
        I'm interested in cases like Rari where there was a decentralized governance mechanism but it was dominated by a "core team", that feels like it encompasses a larger slice of the space than I would have expected. Many of the others are deeply unsurprising though, they are US corporations, took VC investments, have active managerial teams which are all employees of that corp, and advertise themselves as working to increase token value.
    - modeless 4y ago
      Yeah and Coinbase just fired back: https://blog.coinbase.com/coinbase-does-not-list-securities-end-of-story-e58dc873be79 https://blog.coinbase.com/coinbase-does-not-list-securities-... This will be the central issue of the case. It'll be interesting! Will Coinbase step in to defend this guy who they were going to fire, just to prove that they don't list securities?
InefficientRed 4y ago
No. Suspects are often arrested on a subset of the criminal charges with which they will ultimately be indicted. Even in more serious crimes like mass shootings, prosecutors will press charges on only a few of the homicide counts at first. This is common practice for prosecutors.
- hailwren 4y ago
  Well, when they indict on the remaining 18 then we can update our models. Until then, the SEC is only alleging that 7 were securities.
  - mannykannot 4y ago
    True, but your model should already reflect the fact that this is a not an uncommon pattern.
  - InefficientRed 4y ago
    That's a horrible prior. This isn't about the SEC at all. Arresting on a subset of eventual charges is something that nearly all prosecutors do, and for a large set of very good strategic reasons. I think you'd be hard-pressed to find many examples of high-profile cases where the original arrest was based on all possible charges.
    - hailwren 4y ago
      Yeah, I'm not arguing they don't do that. This is one of those cases where arguing the negative without clearly stating your argument makes things easy but not particularly useful. What argument are you presenting instead? Because he was charged for 7 instances of security fraud we should assume that all 25 are securities fraud? Regardless of whether the SEC eventually charges all 25, they've clearly decided to differentiate them all on some metric (otherwise, they would've charged them all at the same time).

iskander 4y ago

Is there a list of all 25 somewhere? This could provide some illumination on what SEC does and does not consider a security.

modeless 4y ago
Or maybe the SEC considers all of them securities but thought that they had the strongest case for these seven and didn't want the distraction of arguing about the other 18. But yeah, would be interesting to see the list.
- astrange 4y ago
  If SEC considers any of them securities, it's very strange for them to go after a single guy at Coinbase and not the entire company, since they've just declared them an illegal securities exchange. (As opposed to an illegal commodities exchange for bitcoin.)
  - dleavitt 4y ago
    I think maybe it's only strange if you assume the SEC has unlimited money and time. Grandparent comment says it better, but they're likely focusing on cases they think are pretty clear-cut.
    - iskander 4y ago
      I'm interested in cases like Rari where there was a decentralized governance mechanism but it was dominated by a "core team", that feels like it encompasses a larger slice of the space than I would have expected. Many of the others are deeply unsurprising though, they are US corporations, took VC investments, have active managerial teams which are all employees of that corp, and advertise themselves as working to increase token value.
  - modeless 4y ago
    Yeah and Coinbase just fired back: https://blog.coinbase.com/coinbase-does-not-list-securities-end-of-story-e58dc873be79 https://blog.coinbase.com/coinbase-does-not-list-securities-... This will be the central issue of the case. It'll be interesting! Will Coinbase step in to defend this guy who they were going to fire, just to prove that they don't list securities?

InefficientRed 4y ago

No. Suspects are often arrested on a subset of the criminal charges with which they will ultimately be indicted. Even in more serious crimes like mass shootings, prosecutors will press charges on only a few of the homicide counts at first. This is common practice for prosecutors.

hailwren 4y ago
Well, when they indict on the remaining 18 then we can update our models. Until then, the SEC is only alleging that 7 were securities.
- mannykannot 4y ago
  True, but your model should already reflect the fact that this is a not an uncommon pattern.
- InefficientRed 4y ago
  That's a horrible prior. This isn't about the SEC at all. Arresting on a subset of eventual charges is something that nearly all prosecutors do, and for a large set of very good strategic reasons. I think you'd be hard-pressed to find many examples of high-profile cases where the original arrest was based on all possible charges.
  - hailwren 4y ago
    Yeah, I'm not arguing they don't do that. This is one of those cases where arguing the negative without clearly stating your argument makes things easy but not particularly useful. What argument are you presenting instead? Because he was charged for 7 instances of security fraud we should assume that all 25 are securities fraud? Regardless of whether the SEC eventually charges all 25, they've clearly decided to differentiate them all on some metric (otherwise, they would've charged them all at the same time).