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Comment by cryptobonanza | Hacker News Reader

“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.

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”

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It's because the assumption is that regular markets work the same way and we just don't talk about it.

Your can mention regulation until you're blue in the face but it won't matter because for many crypto is the antedote to a conspiracy theory they've been literally sold.

And the worst part is: as with all conspiracy theories, there's a grain of truth in there--fraud and insider trading absolutely does happen in tradfi!--which makes it that much harder to convince these folks they're wrong.

Yes, I think for some folks the appeal of crypto is that it seems possible to get in on the con and themselves. Try to find some shitcoin or get tight with a group that's going to launch something to buy it an pre-public rates. It's not "crypto is more open so it can't happen" it's "they're all scams and here's my chance to fleece some other sucker."

I wouldn't paint all of crypto with that brush, but certainly a large proportion.

Frankly, from what I've seen, I suspect that more than 50% of the valuation of most cryptocurrencies comes from people with that mindset.

> I wouldn't paint all of crypto with that brush, but certainly a large proportion.

I would.

All the crypto shills and influencers who never declare their personal holdings really annoy me.

90%+

90% + 10% :)

I'm sorry but its been almost fourteen years and not a single mainstream product has come out of this so-called revolutionary technology. Zero.

For the entirety of the last 10 years I've been hearing how blockchain is the "internet of the early 90s" - well by now it should be the internet of the early 2000s, but it's still the "internet of the early 90s" according to proponents.

It's time to stop and ask yourself: what if it's just not that revolutionary after all? What if a really slow database isn't a solution to all our problems?

> it seems possible to get in on the con and themselves

Most confidence tricks involve this. I actually find the rare tricks which rely on the mark's honesty to be more interesting because you need a strategy more complicated than just "Don't be dishonest" to avoid losing.

> the assumption is that regular markets work the same way and we just don't talk about it

I'm not sure who holds that assumption. The clear, explicit assumption is that regular market does not have insider trading, and the SEC is watching like a hawk to make sure this stays that way.

You can always believe in some alternate conspiracy theory that the markets are rigged, but I assure you, you are in a minority. The vast majority of the people (including yours truly) assume that the SEC is doing a fairly good job. Could there be exceptions? Of course. Is insider trading the rule? Absolutely not.

That's not how order books work. New tokens don't get listed at some pre-determined price. People who buy up tokens in pre-sales are allowed to move their tokens onto exchanges, and list them for sale for whatever price they want.

Obviously they're looking to sell them for more than they got them, but more often than not, the general public doesn't care enough to buy them at higher than the pre-sale price. There's significant risk involved when participating in pre-sales. It's not like it's just a free money free for all. Those are the ones you don't hear about because no one is in the office bragging about how much money they just lost.

He said DeFi, and buying at a specific price is how a lot of presales work there.

Exchange listings, which is the topic of the article, and is mentioned by the person I responded to, are specifically a centralized finance thing (CeFi).

Every DeFi exchange I know of allows anyone to list any token at any time. That's part of what makes them "decentralized", so the concept of knowing ahead of time when a token is going to be listed doesn't make any sense in the DeFi context.

Pre-Sales are often conducted via a DeFi style ICO, which might list tokens at a certain price governed by some fancy mechanics (getting cheaper, or more expensive, over an n-week ICO window or something, dutch auctions, etc), and then eventually the tokens go up for sale on centralized exchanges, which is the "insider" event being discussed by the article, and presumably, the person I replied to.

If they add liquidity at Uniswap, they do indeed get listed at a pre-determined price. The initial liquidity is added at a 50/50 ratio with an existing highly liquid asset, so the number of coins the initial liquidity providers have directly sets the price - of course the immediate dump/demand quickly swings the price.

Dfinity, for instance, is being sued for this sort of untoward financial behavior: https://cryptobriefing.com/lawsuit-claims-dfinity-icp-token-...

Hilariously, Dfinity is now suing Meta for its new logo (which looks like an infinity sign too). Obviously a silly lawsuit, but now googling "dfinity sued" is all about Meta and not about their being sued. Scuzzy.

Is there a word for doing things IRL designed to overlay historical search results?

A "red bus cheese party"?

I see such usages as goverened more by either 1) concern over libel or similar lawsuits or 2) strong but not absolute evidence. Possibly in the case of 2), the evidence exists, but disclosure would compromise or endanger the source.

That said, yes, the headline eyeroll is warranted.

Pedantically, is that insider trading, or is there a different name for that? IPOs work the same way - insiders get granted shares at pennies on the dollar, and then on IPO day the company sells shares, and allows insiders to sell their shares (after the lockup period expires), a process that has created millionaires a million times over.

I think the "might" refers to "problem", not whether it's occuring. per your example, the dramatic anonymity and call to authority is not required. front-running is well known about, it's not a secret.

I'm sorry, but there is no call to authority, the person is merely sharing something, and anonymity is a personal choice. As mentioned, the person in question works in a high position in finance, and should not be giving out details about operations and operations of business partners. Even if the practice is an open secret in cryptocurrency "investment groups", any kind of association to their person, their role or the (legal) operations themselves is to be avoided. It's also surprising to me that choosing anonymity would be scrutinized on Hacker News.

What is being described here is not front-running.

Yes this is completely standard for all crypto projects. And then next step is to buy a positive news articles and an exchange listing. And when it comes to the technology.....lol...well what technology their money is made

> And then next step is to buy a positive news articles and an exchange listing

I can also attest to this happening.

Creators of DeFi take money for nothing from other investors. That's not insider trading, that's minting.

lol yeah.. the might in that sentence is pretty funny.

Cough ... Algorand... cough

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