A Lesson in Insider Trading
The SEC has brought the hammer down on unregistered securities in crypto. And it's choosing to do it by taking action against a guy you've never heard of, his brother, and a close friend.
Well, we all knew this day would come. The Securities and Exchange commission has taken some shots at labeling tokens unregistered securities. It has done this by filing a formal complaint against three individuals in a $1.1 million insider trading scheme. One of the defendants allegedly used his position at Coinbase to share insider knowledge of token listings to the Coinbase platform with a sibling and friend:
a manager in Coinbase’s Assets and Investing Products group, repeatedly tipped material, nonpublic information about the timing and content of Coinbase’s “listing announcements” – in which Coinbase announced that crypto assets would be listed on its trading platform
A listing of a smaller, lesser known coin on Coinbase generally results in the indiscriminate buying of that coin from people who think it’s going to go to the moon. When people with knowledge of a coin’s listing know it’s coming before the bag holders do, they can make a killing by buying the tokens on a decentralized exchange in advance and then waiting for a price spike after listing. In the SEC’s complaint, the agency listed 9 tokens that it now deems unregistered securities; thus giving the agency jurisdiction over the matter.
Those tokens are the following with current market cap in parenthesis:
AMP (87)
RLY (162)
POWR (172)
XYO (272)
RGT (328)
LCX (370)
DDX (599)
KROM (1,023)
DFX (3,389)
My initial reaction is relief that I don’t own any of these. But after my kneejerk relief, my next thought is why does the SEC know what DFX is and I don’t? I’ve literally turned analyzing the crypto industry into my job and I’ve never even heard of half of these coins. Is reading white papers of “DFX Finance” - a coin with a market cap under $7 million and less than 900 token holders - the way SEC investigators should be spending their time?
Frankly, it’s impossible not to fall into “whataboutism” with this SEC complaint. How is it even remotely possible that the Securities and Exchange commission can be taken seriously at this point. How many agency resources and man-hours did the SEC have to put on a complaint that alleges $1.1 million in wrong doing from a couple of nobodies? Why this case?
Does Gary Gensler have such a hard-on for crypto jurisdiction that he’s willing to pursue a million in ill gotten crypto gains from small time hustlers but he’s willing to overlook brazenly obvious insider trading happening in Washington? The speaker of the house is Nancy Pelosi. Pelosi’s husband bought call options worth millions in one of the biggest chip manufacturers shortly before a vote for $50 billion in semiconductor subsidies.
I mean WTF are we even doing here? To his credit, a reporter asked Pelosi just today if her husband is trading off insider knowledge. Her response is epic.
She just walked out.
Keep in mind, Nancy Pelosi was born in 1940. She is 82 years old. According to CA Knowledge, she is worth NINE figures. She should be retired right now. But she isn’t. She collects $200k through a taxpayer funded salary while she influences policy that undoubtedly has contributed to her investment returns and potentially even her business income. $4 million in donations and “gifts” though. How thoughtful.
When the people are finally fed up with this, they’ll put a stop to it. And it won’t be pretty. It would be better if the agencies and bureaucrats who live off the backs of taxpayers would, I don’t know, maybe enforce the rules for everyone! Now it may seem like I’m picking on Pelosi because she sucks at everything except picking STONKS…
…but I’m not. Insider trading and Stock Act violations from elected officials are as American as AAPL pie. Both parties do it. It’s all of them. The system is a swamp. Just make sure you don’t try to sell any loosies on the street, plebeians, or you might lose your life. If you can’t tell; all of this really pisses me off.