“Might”?
There is insider trading going on. An anonymous person that is most definitely not me (and wishes to specifically distance themselves from any of this activity) is in a high role in finance and has seen with their own eyes a business partner buying tokens for $0.02 in secret presale rounds which were then listed on all major exchanges starting at $0.30 to $0.50 and then obviously immediately dumped on retail buyers.<p>The anonymous person has told me this is not even a real secret, it’s an open secret in DeFi and that for some reason all the other “investors” do either not care or just accept it and that it happens with every single “project”
Crypto currencies are generally not regulated securities. So there's basically no reason that an exchange can't run an exchange and then <i>also</i> run a trading team that knows every single individual's position, limit orders, stop losses, everything. Oh, and they work for the exchange so they also have a latency advantage. I've had conversations with engineers working in HFT. Their eyes light up when you talk about crypto because you can do every single trick that would get you in trouble in real markets.<p>The fact that the WSJ thinks a trivial amount of insider trading is note worthy indicates that they don't have the first clue how crypto works. Go and read up on the regulations around trading regulated securities, and then realise that that's an instruction manual for how to make money trading bitcoin.
I read the article.<p>What's the financial incentive for a company to actually enforce "insider trading" rules to its employees? In fact, what does "insider trading" even mean in this context? Shouldn't that be defined by a central authority?<p>When I read the title, it was, "No shit? What do you expect in an unregulated market by design?"<p>I realize that "lots of insider trading is obviously happening, naturally" is a big statement and unfalsifiabe, so going in the other direction is more logically sound.<p>On other hand, I can't help but feel it doesn't need to be proven. Unregulated economics is in the design! Maybe we just need more articles like this to prove the trend, but do we still feel the need to prove it? It reminds me of the way scientific consensus fought and eventually converged on "smoking causes lung cancer", even though that wasn't agreed upon at the beginning because monied interests disagreed. But it was like... well, you're burning toxic chemicals inside your lungs, it's in the design isn't it?!<p>Which take makes more sense currently?
Gasp!<p>An industry where lots of people get to learn why 100+ years of financial regulations exist..<p>They're speedrunning centuries worth of financial scams.
If you can't see the whole article: Archive to the rescue: <a href="https://archive.is/njixG" rel="nofollow">https://archive.is/njixG</a>
When I briefly paid attention to Monero/XMR and ran a mining rig it was glaringly obvious that every time they changed the algorithm, something Monero deliberately did(does?) regularly for anti-ASIC reasons, those participating in the development would have their miners active effectively across the changeover with zero down time.<p>It seemed pretty close to insider trading to me. While the network was getting back to its previous aggregate hash rate the difficulty would be exceptionally low, so everyone closely involved had a window of easy mining every time the algo changed. It would take days for the aggregate hash rate to recover 100%...
When I worked in crypto I knew news before release and, if I wanted, could trade on it. If there was a delay it’d almost always cause a minor crash, so I could short. On the other hand big investors or collaborations would give the price a hike. All perfectly legal, but I didn’t for ethical reasons.
I mean the list of common types of market misconduct that have been outlawed by regulators are a play book for crypto markets (spoofing, frontrunning, insider trading, etc) why wouldn't they be?
I think the significance here isn’t the title or the content of the article, but that it’s on the WSJ website. This will reach more people who know little about crypto ins and outs.
I think pretty much every market has insider trading going on.<p>The difference with Crypto is that because there's an actual record of transactions, there's at least a chance for the public to catch onto shady looking behavior that manipulates the price of an asset.<p>A lot of people falsely think the stock market is heavily regulated and pure. It's not. You can't even find out a definitive answer as to how many shares of a stock currently exist. Crypto is infinitely superior in many respects.
Basically, something that happens in traditional finance/IPOs but considered OK. Insider knowledge of knowing when a company will do IPO to get maximum return on their investment and cashing out when company goes public after great public showing. Only difference between the traditional run of the mill companies that go on IPO with massive valuation and what crypto coins do when they go 'public', is that with IPO case, it is socially acceptable for people to game the system.<p>There are numerous example from IPO bonanza that took place last year where investor did exactly the same and now their stock have reached rock bottom. Whatever value those companies had, the 'insider investor' had their pay day, now its left to rot in public domain. Fantastic.
Go to a place where product managers and engineers from Coinbase and Robinhood go for breakfast, lunch, dinner, alcohol, or coffee<p>They are very open about insider trading
What does 'crypto' even mean anymore? I thought it was the "store of value' using a decentralized blockchain (ignoring cryptography for the moment). At this point we can make up any news story and praise or blame crypto.<p>I'm still trying to decide if the narrow & broad crypto term <i>is</i> rather than <i>has</i> the problem.
This becomes much more of an issue as "line goes down". The normal progression in NFTs now is that the minters make money, and the suckers who bought with intent to resell lose money.
Of course it does. But if you're thinking that e.g. the stock market is any better, you're <i>wildly</i> naive. In the stock market, the griminess has been developed and institutionalized, and still gets away with silliness like "dark pools."<p>Crypto is also very much a mess in this regard, but you have a much greater shot at fairness, given that to some extent, blockchains must be visible and open.
Obligatory reminder that insider trading laws (at least in the US) are about theft of information, not fairness.<p>>KESTENBAUM: And she says while everybody gets upset at insider trading because it gives someone an unfair advantage, that is not the legal reason why it gets you into trouble. The argument used these days in court for why it's illegal is that insider trading amounts to stealing information from a company. It's like theft.<p>>GOLDSTEIN: And so for that reason, proving that someone traded on insider information - that is not enough to convict them. If, say, a financial document from some company blows out the window and you happen to find it sitting there on the sidewalk, Sarah says it's not insider trading for you to use that to make money in the stock market because you didn't steal it.<p><a href="https://www.npr.org/transcripts/596532106" rel="nofollow">https://www.npr.org/transcripts/596532106</a><p>In the case of public corporations, insider information (eg. this quarter's earnings) belongs to the company and the company has a duty to act in the interests of its shareholders. If you work at that company and trade on that information, that's illegal because the information doesn't belong to you. However, in other markets (eg. commodities or forex), no such "owner" of information exists so "insider trading" is effectively legal[1]. Applying this to the example, it's unclear whether it would count as insider trading. I suppose you could argue that people working on the project has a duty to protect tokenholders, and therefore they should be barred from trading ahead of some announcement, but in this case the insiders seem to be insiders on exchanges, which hold no such obligations.<p>[1] "Insider trading" in energy markets is not really a thing, because energy markets are largely for producers and users of energy to hedge their production and needs, and that production and those needs are the sort of "inside information" that would move markets. So everyone just kind of gets a free pass to trade on inside information. <a href="https://www.bloomberg.com/opinion/articles/2013-12-19/helicopter-edge-is-better-than-black-edge" rel="nofollow">https://www.bloomberg.com/opinion/articles/2013-12-19/helico...</a>