Buy, sell, send and receive Bitcoin Cash on Coinbase | Hacker News Reader

Buy, sell, send and receive Bitcoin Cash on Coinbase

blog.coinbase.com

306 pointswlj277 comments

Why is anyone surprised by this? Coinbase sent an email out months ago saying they'd do this by Jan 1, 2018.

    Dear Coinbase customer, 
    
    ...
    We are planning to have support for bitcoin cash by 
    January 1, 2018, assuming no additional risks emerge 
    during that time.
    ...
    
    Thank you,
    
    Coinbase Team

Am I crazy?

Edit: let me answer those who think I am crazy. BTC literally tripled overnight a few weeks ago when there was "speculation" about futures contracts. Price swings in the crypto world happen over the least sensible things. My assumption was that the news from Coinbase was actually helping prop up BCH all this time, and that may have been true. I guess I took for granted that it was a sure thing.

From the time this was posted to your comment, Bitcoin Cash went up 300%.

That's why I'm confused. I would have thought people would have been stocking up starting back in August (and especially as December passed and it wasn't on Coinbase/GDAX yet).

> assuming no additional risks emerge

The letter was simply a possible notion. No guarantee. Why not send out another letter saying they were going to release it on this day?

I know why, because they wanted to manipulate the market.

I thought it was pretty obvious if they committed to giving people their BCH balance they'd have to at least halfway support it. Plus, they never reported any setbacks. The people I talk crypto with and myself are already busy trying to guess what will make it on Coinbase/GDAX after BCH. If this development is any indicator, we're wasting our time since we can just wait until they announce and buy in the period between announcement and launch (assuming they announce the next one before launching it).

I’m not sure that they’ll announce the next one. I think BCH was a bit of an anomaly i this regard. At the time of the fork, Coinbase announced that they wouldn’t support BCH, and then in response to the outcry, changed course and said that they would.

I’m not so sure they’ll do the same with upcoming additions. I do definitely see the merit of trying to guess their next move though, as there seems to be a lot of money in Coinbase just chasing whatever comes up in hopes that it will also go to 20,000/coin

There is an interview with the new CEO saying that they have a formal review process for adding new 'currencies' and BCH is simply first in line. Having many cryptos adds legitimacy, whether there is one underneath or not.. THey can say oh BTC, BCH, LTC all crashed, but ETH only crashed by 150% so cryptocurrencies are still viable (even when they are not)

Plenty of other exchanges have BCH at $3500 (or so), while Coinbase has it at over $8k: an arbitrage like nothing I've ever seen. Conveniently, buy/sell of BCH on Coinbase is temporarily disabled (or at least it was a few minutes ago).

It was a flash spike, it's back down

I don't understand. By that logic, would not announcement with the date manipulate the market? Future known events are priced in in the market..

If the announcement came today instead same thing might have happened with prices.

The next line was "Once supported, customers will be able to withdraw bitcoin cash. We'll make a determination at a later date about adding trading support."

I can only assume that there is some population of speculators that are only able to purchase bitcoin cash through Coinbase.. maybe the other exchanges make it too difficult?

No, can't really be the case that they can't rather they would just have to be too ignorant to do it elsewhere, if you can buy Bitcoin it's relatively trivial to buy any other crypto currency.

A number of friends of mine in the US only want to deal with Coinbase. It is probably a combination of having already set up there and not wanting to submit ID to other exchanges, and having trust issues with other ones.

Also, bitstamp verification time is now 2 weeks, and bittrex has completely paused any new signups.

In the US, if you link a bank account to Coinbase then you don't even have to submit an ID. So the barrier to entry is significantly lowered compared to other exchanges.

If this was so obvious to you in the hindsight, you could have made a ton of money by backing this with investments.

Only if he knew that it wasn't obvious to anyone else ;). I guess people that have been playing with crypto currencies for a long time (like me) have been having a lot of "wtf, why now" moments lately.

I find myself explaining blockchains at birthdays all of a sudden. No one cared whe I first started voicing my enthusiasm over this tech in 2011 or so and then again in 2014. I didn't get rich from it, I really don't understand why people want BTC just at the point the transaction costs are insane and the political situation is unclear with all the forks and such. In 2014 I settled beer bills over BTC and transactions costs were negligible. It was pure fun. Strange world.

> I really don't understand why people want BTC just at the point the transaction costs are insane ...

The value of bitcoin increased tenfold in 1 year. They just want to get rich.

>> have been having a lot of "wtf, why now" moments

Because the market is dominated by irrational actors. Other markets are dominated by large corporate entities who, as a rule, move according to established principals backed by a body of government regulations. The BC market is dominated by naive small investors and shady large players. The small players are dumping money in on the expectation of getting rich. The big players are leveraging the lack of regulation to pull tricks that they could not in other markets, tricks that look strange and irrational to anyone who doesn't know the game. So prices move wildly based on a combination of fashion and intrigue.

they are selling the image of a responsible company. they should have set a specific date, it was a no-brainer. people should not trust them anymore as the amazon of exchanges.

So if I sell my newfound BCH today, which was birthed from thin air a few months ago, but originates from BTC I bought years ago, is it short term capital gains or long term?

My understanding is that there is no consensus expert opinion on this.

IANAA but I imagine it is like a stock split.

I don't agree with the stock split comparisons.

Bitcoin Cash is not something that existed inside Bitcoin and was then spun out. It's more like a new company was formed and it's cap table was initialized as a copy of another pre-existing company.

I think there just isn't any precedent for the concept of "forking" and how the internal revenue code applies to it.

I see your point. This is something I can imagine lawyers arguing over and there is no right/wrong answer really.

The cap table is interesting though. One could say it starts off at $0 but that isn't really true as there is a 'good will' value due to the public knowledge of the fork and that the coin will be worth something.

But if there was a “good will” value then you would had to have paid taxes on the value at the time of aquiring the asset (when the fork happened). You can’t just be gifted something of substantial value and not pay taxes on it.

Yes that would make sense.

It would be income tax then, right?

If the coin crashes to 0 a week later, then you'd still pay it too, in theory.

Yes, but I think you could write off the losses, so might equal out if it crashed to 0.

The parent's observation is that it is initially taxed as income. If it crashes to zero that is a capital gains loss so it is a write off against capital gains, not against income. So you still would have to pay taxes even though you have no money.

The following are my observations from discussions with my accountant and reading some of the IRS tax codes and "guidance". Do NOT take this as tax advice

In general (within the US) the tax code is treating crypto both as property AND as income.

1) Someone pays you in crypto - income

2) If you mine crypto it is treated as income.

3) If you purchase crypto it is treated as property.

4) If you HOLD crypto it is treated as property.

To break down how this works in regards to taxes. If it is "income crypto" then you are liable for taxes on the value of the crypto at the "moment" you receive it.

1) For example, you received 1 token that is valued at $100 and your tax rate is 22% then you now owe $22 in income tax. If you hold that crypto and it goes to $0; you still owe $22 in income tax.

To further complicate this though, the loss from the $100 to $0 IS a capital loss. So what this means it you made an extra $100 in income, but then you lost $100 in capital losses which you write down against your income so now you are back to owe-ing $0 in income tax on that $100.

Now that may seem like a complicated way of saying you don't owe anything, but the catch is you can only write down $3000 a year of capital losses against your income. You can carry those losses over each year until it is wholly accounted for, but in the meantime, you could end up holding the bag and oweing a lot of money to the IRS.

2) If instead, you purchase 1 token that is valued at $100 and you hold it and it goes to $200 and then sell; you now owe capital gains taxes. If you held for less than 1 year then the $100 gain is classified as capital gains, but taxed like income. If you hold it for more than 1 year it is taxed at the capital gains rates.

Lawyers wouldn't be arguing over this. It's a well-settled point of tax law.

BCH received in the split would be treated as free money received (because Bitcoins are currency, not equity interest), so as cash income, and thus would be taxed like cash income.

It’s not like a stock split, but it is like a spinoff. It’s easier to compare it to a company being split into equal parts with roughly similar functions than the spinning off of a smaller division. Conceptually more like the splitting up of Ma Bell, or of ALDI into ALDI Nord and ALDI Süd.

The only problem is that there is no entity that can issue a notice on how to assign the basis, which is how things are usually handled in equities. The price of BCH was all over the place immediately after the fork, though for a while the price of BTC+BCH was closer to the old price of BTC than BTC alone was, which is what you’d expect.

See this post for an example of a duplicated cap table in an equity market.

https://money.stackexchange.com/questions/23176/in-the-event...

The biggest concern in my head is not the prices of cryptos, but how much of a headache it will be to calculate taxes at year-end

cointracking.info

Wow, this is great -- thank you so much for sharing!

Nobody knows what IRS says on the matter, but everyone I know of is treating it as a stock split with the holding period of original bitcoin . You do have to calculate an adjusted cost basis for the forked coins, at time of split (most common) or sale (sounds iffy).

Short term capital gain with a cost basis of $0 makes the most sense.

More like dividends then?

And if Bitcoin Cash starts being recognized as Bitcoin? (Far fetched, but not in the Segwit2X case.) Use your original cost basis?

No, you treat it as free cash, so a basis of zero, because you didn't actually pay anything for the BCH and it's treated as income when received.

On the other hand, when you sell the BCH, your basis will the FMV when received, so you would only be taxed the second time on the gain in price (if any).l

BTC and BCH share the same ancestry. You bought both years ago. Like a heisencoin.

https://bitcoin.tax/blog/how-to-tax-bitcoin-cash-bch/

What if you had no interest in BCH but you owned 1,000 BTC. Do you suddenly have a $277,000 income tax bill?

Yes, as discussed by Tyson Cross, tax attorney at BitcoinTaxSolutions.com. Since you have accession to wealth then this is taxable income.

At what price would you go off of? The price when Coinbase granted access? Or the price of BCH when the actual fork happened?

The actual fork, because that's when it became yours technically.

It was literally impossible for most holders to sell at the price when the Bitcoin Cash fork happened because none of the exchanges were accepting deposits. Part of the reason the price was so high then was exactly because people couldn't sell; it dropped as soon as deposits opened. (Since this happened at different times on different exchanges, the prices diverged quite a lot too.)

It's literally impossible for most holders of pre-ipo options to sell them, or their stock, but their tax bill is due the day the leave their employer, not the day that those options/stocks become liquid.

Surprise, tax law isn't fair. Surprise, nobody is looking to change that.

Here is a counter point I would argue. Anyone can make a Bitcoin fork, in fact Bitcoin forks are being made every week now. Is every Bitcoin holder now liable for that?

Also these forks often collapse, so when was the income gain? The same day? You'd have people owing more tax than their entire net worth. (Forks often pump in the first day/week then drop to nothing.)

If this is possible then you could attack every Bitcoin holder by making millions of forks each day and making lots of trades to give each fork real value. If you don't declare each fork you end up getting penalties.

I would imagine a more sane way to deal with this is like how the ATO deals with Bitcoin mining. You mine Bitcoin but it's not realized until transferred to a third party.

I would argue the same for forks.

A fork is made, you have coins. But it's not like you received those coins. Technically you always had them as they are old coins just now on a different chain. If you sell the coins then it's a gain that you owe tax on.

But forcing each user to track every fork as income is impractical and not viable. You'll see more of this as thousands of forks come into existence over the coming years.

This is something I would actually look into getting a private ruling about.

Wouldn’t it not count as income until you sold it for USD? In which case you wouldn’t be liable for every fork, just the ones you benefitted from.

That's the way it's treated in UK law, but apparently in the US, you're liable for the tax as soon as you have access to the asset. I think the same thing causes people problems with stock options. Seems like an odd bit of legislation.

Hmm, are you sure? I thought that if you held bitcoin for over a year, it would be taxed as capital gains? Meaning you don't realize the value until you sell it?

I think the key difference is that the initial value is not gains, it's much more like income.

It seems to me that forks are treated more like RSUs (restricted stock units) than stock options. When a company grants you RSUs, you're immediately responsible for tax on the value of the shares. If you then hold the stock for any period of time, and later sell at a profit, you'll need to pay tax on that profit too. You get taxed twice.

EDIT: IANAL, IANAA, etc...

If it's viewed as an asset split, which is probably more defensible, then there are no tax liabilities incurred.

Consider the following counterfactual: What if Bitcoin Cash had become accepted as the "true" Bitcoin and the original Bitcoin's market cap plummeted to near zero? Then you would treat it as a long-term capital gain if you sell it, right? Technically, there is little to distinguish a contentious fork from an upgrade to the Bitcoin protocol.

As another counterfactual: What if the SegWit2x fork had happened, and each of the two resulting cryptocurrencies had roughly equal market cap and each claimed to be the "true" Bitcoin? I don't see how the IRS could coherently distinguish between these two cryptocurrencies and treat the sale of one as a long-term gain but a sale of the other as a short-term gain.

I don't see how the IRS could coherently distinguish between these two cryptocurrencies and treat the sale of one as a long-term gain but a sale of the other as a short-term gain.

It's trivial to distinguish between the two. One has existed for several years and the other came into existence in 2017. One goes by the name Bitcoin or Bitcoin Classic, and the other by the name Bitcoin Cash. Legally and for tax purposes, the technical underpinning of the currencies is irrelevant...

The sale of Bitcoin Classic could be long-term gain because it could be held for >1 year (the threshold for LTG). The sale of Bitcoin Cash is short-term gain (for the 2017 tax year) because it came into existence in 2017.

Note that Bitcoin Cash should not be treated as a stock split for capital gain purposes--generally you would not get to share the basis of your Bitcoin Classic holdings with your Bitcoin Cash holdings. You can do that with stock because tax-rules specifically provide this option for stock and equity ownership interests. Bitcoins aren't equity ownership interests, they're assets. If you acquired Bitcoin Cash through the fork, you received free assets, and you're taxed on it as if you received free money.

>It's trivial to distinguish between the two.... One goes by the name Bitcoin or Bitcoin Classic, and the other by the name Bitcoin Cash.

My comment about distinguishing was not about Bitcoin Cash, but about the following counterfactual:

>What if the SegWit2x fork had happened, and each of the two resulting cryptocurrencies had roughly equal market cap and each claimed to be the "true" Bitcoin?

In this hypothetical situation, there is (by assumption) real disagreement about which of the two cryptocurrencies is the "real" Bitcoin, and I don't see how the IRS would be equipped to decide this contentious issue. And if it doesn't make such a decision, then the only remaining possibility is to treat the two chains equally.

I still don't know what you're saying. The IRS doesn't care which one is the true Bitcoin...it's going to treat coins held on each blockchain as separate assets...

IANAL, but I recorded the buy price as $0 for BCH I got in my transaction spreadsheet.

Neither, you have to wait until you get audited for them to tell you.

I would treat it as a dividend. If you roll it back in then don't pay taxes. If you sell it and take the cash then I assume it would be taxed based on when you bought the bitcoin. There is precedent here with trading stocks. (disclaimer: I am not an accountant)

BCH received in the fork should be treated like the receipt of free money: as income. So, you get taxed on that as if it were cash.

If/when you later sell it, you will be taxed again on any gain in the value of the BCH at the time of sale as capital gain (but only on the gain, not the total value of the BCH). Alternatively, if the value has dropped, you will get a capital loss deduction. Whether it is short-term or long-term capital gains/losses depends on how long you've held the BCH at the time of sale.

And yes, this is the consensus of the experts...especially the ones at the IRS...

>BCH received in the fork should be treated like the receipt of free money

Why is that? Another way of looking at it is that the value of your existing bitcoin holdings got split between two competing chains. In a rational market, value of your bitcoin holdings pre-fork should be equal to the sum of the value of your holdings on the two post-fork chains.

Because the value of your Bitcoin holdings did not split. You had Bitcoin before, and the same amount of Bitcoin after, but also a new quantity of valuable other-Bitcoin.

And let's not describe Bitcoin as a rational market...Even if that were true, it's not relevant to the tax treatment.

IRS has real motivation to trace Satoshi now.

It is interesting to see all the people up in arms here. Everyone here is assuming that no one knew that Coinbase was going to add Bitcoin Cash. That simply isn't true.

For the last two months, they have said they plan to add it. In fact, Bitcoin Cash was about 280 dollars and it was common knowledge Coinbase was going to support it. You, the employees, and everyone else could have loaded up if you wanted to.

Lastly, there is no real incentive for employees to load up on BCH to make a quick buck. In the first seconds of trading a massive sell wall of 12,000 orders emerged and that would drive the price down dramatically.

I was watching the sell wall, and it built up to 12,000 slowly over the period of at least 45 minutes, probably because the ticker price said $8499 on Coinbase.

Where this all starts to smell a little funny is how badly and strangely this was rolled out, how they allowed some trades, and how the price crept up 50-100% before the announcement. Someone said they accidentally released some bitcoin cash UI feature that tipped people off a few days ago. More incompetence.

They did release an API for BCH, which makes sense to release early, for merchants.

I don't know of UI slips, but that'd be incompetente, yes.

I made a killing on the BCH speculation because if you looked at the coinbase API, you could clearly see they had BCH support already implemented even before the announcement!

Made 250k profit just today alone.

Even back in August, specifying BCH-USD on certain api calls would return a 200 and a blank api response, rather than a 400 and {'message': 'not a valid product_id'}.

Seems like that's ripe for enumeration...

I must have missed the memo. Did coinbase specify other cryptocurrencies (specifically) that they would be supporting in the future?

Closest they've come that I'm aware of is this -

"...we do not believe it is safe to allow support for Bitcoin Gold at this time. If the blockchain proves to be secure and valuable, GDAX may choose to support it and at that point credit your account with an amount of Bitcoin Gold equal to your Bitcoin (BTC) balance at the time of the fork."

https://blog.gdax.com/timeline-and-support-bitcoin-segwit2x-...

I sent out my bictoin cash to a wallet and the transaction url gives me a 404. Coinbase posted this message on their page : "Partially Degraded Service: Outgoing Bitcoin Cash transactions are currently not being sent. Our team is investigating."

Coinbase announces support for a cryptocurrency and the price skyrockets. I can't believe people just start to buy a cryptocurrency because they suddenly can more easily.

Every stock IPO spikes, of course this will lead to atleast a temporary price spike.

It's also a vote of confidence. Many people, including me, assumed that Bitcoin Cash would rapidly become worthless and sold it off immediately. Having the largest Bitcoin exchange in the world support it means it may actually hang around for a while.

If I may ask... Why did you have this assumption? I'm asking you specifically because like you said many sold their Bitcoin Cash.

I suspect those who didn't were mostly the ones with deeper insight of the underlying technology. When the fork occurred full blocks had already been a problem for well over a year. Segwit was not the solution and overcomplicated the blockchain. This is not debatable anymore. Bitcoin Cash abolished this "overengineering" and simply increased the block size. Disabled RBF making 0-confirmations a thing again. And lastly just recently fixed the DAA. Many think that Bitcoin Cash is closer to the original whitepaper by Satoshi. I'd argue that is true.

Currently the Bitcoin has had 100k+ unconfirmed transactions for weeks... and a ever growing mempool. You cannot transact or move your coins confidently without paying large fees. 500 satoshis/byte or about 30 dollars. The original vision is completely destroyed. Sentences like "store of value" are now the term used to describe Bitcoin. Very far from what the Bitcoin used to be. https://bitcoin.org/en/ is little more but a lie now.

Increasing the block size doesn't seem to me like a long-term solution for Bitcoin's scalability problem. From the tone of your post though, it seems like you're mind is unlikely to be changed about Bitcoin Cash.

Can you elaborate on why you think that increasing the block size doesn't seem like a solution for scaling?

For the same reason we do not make bigger cars when we want to go to space.

That is not a good comparison to the situation. Cars and outer space have nothing to do with each other at all. Whereas the number of transactions is directly impacted by the available size on the block that they consume.

Well. Satoshi even suggested that to scale bigger blocks would be required. In fact before the 1MiB limit was introduced there was no limit. Believe it or not.

I know this is not a valid reason to say that increasing the block size is the only solution. Of course there are other solutions. One is segwit... but that has not solved anything at all. The thing is that increasing the block size would fix Bitcoin's problem right now. Compare segwit implementation with increasing the block size. Segwit is a very complex implementation and frankly I would call it over-engineered. Worst. It hasn't done ANYTHING for Bitcoin. Currently the Bitcoin has had 100k+ unconfirmed transactions for weeks... and a ever growing mempool. You cannot transact or move your coins confidently without paying large fees. 500 satoshis/byte or about 30 dollars. The original vision is completely destroyed. Sentences like "store of value" are now the term used to describe Bitcoin. Very far from what the Bitcoin used to be.

Forking anything is hard and forking Bitcoin is designed to be particularly difficult, so regardless of technical merit, the odds were stacked against BCH being able to supplant BTC.

To me it seems much more likely that another, unrelated cryptocurrency will eventually fulfill the role BTC was originally intended for.

Turns out it wasn't. Bitcoin Cash was created and now has the same properties Bitcoin had years ago. Fast peer-to-peer transactions. Low processing fees. Its price also seems to suggest that the fork was a success. I think people will soon realise this.

> because they suddenly can more easily

People do "more" when stuff gets easier for a lot of other things.

But if you want to drill down on this specific situation, think about how many "newbies" must have come to Coinbase because of the recent Bitcoin surge. They weren't using any other online wallet or exchange - just Coinbase. And now suddenly they have an extra cryptocurrency option. A lot of them will try it out, thus increasing the price of the coin.

This is also exactly why Bitcoin is maintaining a leadership among cryptocurrencies and will for the foreseeable future, despite being so much worse in many areas compared to newer cryptocurrencies. Bitcoin is the "de facto" cryptocurrency accepted not by 50%, 70%, or 90% of the crypto exchanges out there, as some of the other cryptocurrencies are, but by 100% of them.

Also, all the other cryptocurrencies are exchanged into Bitcoin. There are very few other cryptocurrency "markets" other than Bitcoin. Some exchanges support turning your other cryptocurrencies into Ethereum for instance, but not all of them, and even for those that do, people still prefer to exchange into Bitcoin.

The "first mover advantage" is very strong here, and Bitcoin will continue to benefit from it until maybe every other cryptocurrency is 10-100x better than Bitcoin in every way and everyone will wake up one day and say "wait, why are we using Bitcoin as the default currency again?!" But it's not a guarantee that will happen soon, or even ever.

> I can't believe people just start to buy a cryptocurrency because they suddenly can more easily.

Well now you know. Speaking for myself, I can't be bothered to upload my ID to another exchange again. I probably should because I haven't been able to send money to Coinbase in forever but eh. Coinbase is very simple to use, and you should never underestimate the value of convenience. It's one of the things that made Amazon as large as it is today.

Coinbase is very simple to use until they flag you for no reason and then you're fucked. Source: Me, trying to access the GDAX account that supposedly comes with a coinbase account.

Using GDAX requires an ID because you can store USD in it. Same goes for using the USD wallet in Coinbase.

I suspect they have some fixing to do yet... common prices listed on indexes are ~$3,539.82 USD at the moment. Coinbase UI has the UI pegged at $8,499.03 .. with console errors, and ssl to be distrusted errors.

Must be fun to do testing for api failure modes with this...

The UI's prices were/are accurate as far as I can tell. I think the trading was just that unstable. When it opened at 17:20 PST, the price was indeed ~$3.5k, then shot up and down violently until they pulled the plug three minutes later at ~$9.5k.

First trades started at 3100.

https://api.gdax.com/products/bch-usd/trades?after=50

Yeah, based on the screenshots I've seen people posting the effective bid-ask spread for anything beyond the most miniscule of transactions was $6000 when they pulled the plug, with almost all of the buy orders at around $3000, almost all of the sell orders at around $9000, and a very thin orderbook in-between the two. What a mess.

They screwed it up badly. If you checked BTC/BCH, there were open orders buying 1 BCH for 3 BTC, which is totally ridiculous. Obviously there was some effort on pumping it a lot.

Coinbase basically did one of the most basic mistakes for new markets (or any newly-online market), to not allow orderbooks to be filled before trades can take place. And so people took advantage of it. I just hope inexperienced people didn't get caught in the middle of it.

That's ludicrous. Do people not know what a limit order is? Do I walk into a car dealership and say, "Please sell me a car now. Here are all my personal and banking details. There is no price limit." What do you think is going to happen? How is this idiocy the exchange's fault?

This would all be fun and games, but I suspect the SEC will want an explanation and I'm not so sure Coinbase has a good one. I wouldn't be surprised if they are shutdown tomorrow before sunrise.

The USDA will want to have a word with them as well. However, neither has any regulatory authority over Coinbase.

They are registered as money transmitters in just about every state, not sure what the legal implications of that are exactly, but I doubt the regulatory bodies will just let it slip. If there is any suspicion of "fraud", then you don't need SEC (or USDA, lol) - the local police department and FBI are generally good enough.

https://www.coinbase.com/legal/licenses?locale=en-US

It would appear that you were wrong. They seem to be just fine this morning well after sunrise.

Based on data from the gdax trades api, in the approx. 2 minutes and 40 seconds this was live on gdax yesterday, about $15.5 million USD of trades occurred, at a volume weighted average price of $5,080.

is it possible to sign up for GDAX instead of coinbase if you don't have a US based company? I'd much prefer programmatic access and coinbase hardly ever works at times like these...

I think if you can sign up for a coinbase account, you automatically get gdax access as well - I don't think there's any additional requirements for gdax.

I've had the worst customer support experience with coinbase. I'd advise not using their service. They aren't equipped to support their customers. I'm out of pocket $1000 and have been in a "queue" for the last couple of months.

Same

Unfortunately if you want timely support from cb you have to behave kind of unsavory.

Look up their higher level staff on LinkedIn, then email them. You can also do some creative Google searches to find their personal email and contact them there.

Contact them and they will transfer you to priority people who can actually do stuff.

You can also submit a complaint to the CFPB. I did this and got my money back within a week.

I have done this. I will suggest the same process to others who have been locked out despite providing positive identification.

This is rough. I've run into a lot of people who have been locked out of their accounts, with the same kind of vague "specialist working on it" message being copy pasted over and over into support message. Hopefully I can contact someone under the valid pretext of asking about "all of us." It's concerning.

Does anyone else find it highly suspicious that Coinbase goes down whenever there is any major movement in prices?

You can explain this as just the natural result of too much traffic, but that's not convincing. This is a business valued at over 1 billion dollars that has been operating for years. If this is still a problem, it's either unbelievable incompetence, or because they see no reason to fix it.

And here is a worst-case theory, by way of speculation not accusation. Being down whenever there is a lot of movement lets them beat all of their customers. When there is a crash, they can sell before their customers can. When there is a boom, they can buy before before their customers can. And because such a big portion of the market trades through them, this is more than trivial gains.

I have no way of knowing if this is what's happening, but it seems to be worthy of discussion, given how many people are placing trust in them. They don't really have an adequate explanation for the constant downtime, and I think they owe one to their customers.

The word for this is called front running.

It is called "separation of fools and their money". This was popular before SEC showed up. It seems crypto-clowns refuse to learn from others and insist on re-learning the lessons

According to Twitter, they're in the ballpark of 500k concurrent users.

The track record of billion dollar companies building working software is not exactly impeccable.

They aren't frontrunning their customers. Their whole brand is being the one trustworthy option in a world of scammers; they already make a fuckload of money off of transaction fees, no reason to throw out that trust and ruin their cash cow. It's just a scaling problem, turns out it's hard to make Ruby on Rails handle their needs.

& MongoDB

They could be doing it to make up shortfalls in their own BTC holdings relative holdings promised to customers, either in actual quantity, or in price actually acquired vs. price paid by the customer.

They're already earning million's USD per day [0]. I doubt that they would risk that lucrative business by doing something illegal as front-running. That being said, they really should fix the performance of their platform. Yesterday they reduced their API rate limits to be able to handle the load. That's just annoying for traders.

[0] https://coinmarketcap.com/exchanges/volume/24-hour/#gdax

24h volume = $2,179,471,700 x 0.25% commission = $5,448,679.25 revenue (per day)

Has it ever been tested in court that the laws that make various forms of trading halts a tool to protect fairness in conventional markets can be reliably applied to an exchange of virtual toy tokens? Overloaded front-end servers that stall the bulk of sell orders while willing buyers get through to be matched with "preferred sellers" using lots of careful handholding seems very likely to me in a bitcoin panic, it could happen without any premeditated ill intent at all.

They have shut down numerous times when there is large (usually downward trending) volatility. It is very suspicious. This has been happening for years now.

And yet there's nothing you can do about it unless you can prove they did it for personal gain; they operate a service outside the requirements given to e.g. the NYSE, and you the consumer agree to that risk by giving them your money.

So long as they don't actively mess with customer owned BTC (as in: only stall transaction orders, not outright take them away if that is even possible) I would not even be sure that provable personal gains would be courtroom material. (At least for and user vs exchange company, not for exchange company vs employee)

All customers who held a Bitcoin balance on Coinbase at the time of the fork will now see an equal balance of Bitcoin Cash available in their Coinbase account.

Pardon the naive question, but does this mean Coinbase users who held Bitcoin have essentially "doubled their money"?

They get one BCH for each BTC they held, but it's not double in terms of USD. Bitcoin is currently selling for around $17k, and BCH will open at $3k

Sort of. They now hold as much BCH as they had BTC on August 1st. However, BTC is worth significantly more than BCH in terms of dollars currently. The gain is more like ~20% in dollars.

An "equal balance of Bitcoin Cash", as in 1000BTC becomes joined by 1000BCH. BCH is right now worth about 1/10th the value of BTC, so people have 110%ed their money.

Also, people who just had money sitting around in a private wallet on the blockchain—that is, outside of any exchange—have also 110%ed their money; there's nothing special about Coinbase, it happened for any and all BTCs that existed on 2017-08-01.

(What is special is the accounts at the other exchanges, who have thusfar mostly not provided their users with access to their equivalent BCH gains. It can be argued that the gains were made to the exchange's float, rather than to the users' accounts, so the BCH isn't "inherently" owned by the depositors, any more than capital gains of leveraged investments using a bank's liabilities are owed to the depositors of said bank. Really, since this "debt" has no (legal or smart-) contractual existence, it's up to social norms whether individual exchanges capitulate and hand over the BCH gains they've accrued.)

That's what I thought with the Cash fork, suddenly in addition to an X amount of BTC you also get an Y amount of a new cryptocurrency for free - no financial investment or mining required. Logically what should happen is that the bitcoin price dropped by the exact amount of what bitcoin cash was worth, but in reality that's not true because the market is not rational.

I can imagine Coinbase held out on offering trading - if everyone wanted to cash out then Coinbase suddenly had to come up with millions of dollars that didn't come in through normal purchases of e.g. bitcoin.

IMO, bitcoin cash was generating valuable cryptocurrencies out of thin air.

Well, "all customers" is relative. I held some BTC over the 8/1 date mentioned in their release, and should have BCH to support it. Currently the balance is 0.0. I've submitted a support request and asked my lawyer to draft a letter but at this point I'm assuming CoinBase stole five figures from me (based on today's average price) until proven otherwise.

Maybe focus on fixing the broken bits of your site, like ID verification.

Coinbase customers probably prioritize receiving an extra 10%+ value on their accounts above those features.

It's all good until you actually have a problem, and then you're just stuck emailing someone who never replies.

Agreed it would suck to hold a bank account (Paypal, Coinbase) and then get deprioritized because your account isn't important enough.

It would be interesting to see what fraction of accounts have a "serious contention" with them on the order of not being able to move substantial funds. If any institution showed a figure even has high as 5% I would be seriously dissuaded.

Yep. I've opened an account while in Netherlands, which was a mistake because now my account is showing "Netherlands" as the country. I have, of course, tried their "change country" flow, where you upload the ID and after verifying the country of that ID the country on the account should be changed. Except that I did this 3 times now, each time successfully verifying my British-issued ID, and my account country is still Netherlands. I've opened a support ticket more than a week ago and still have no reply.

For other exchanges that support large numbers of other coins, how are they able to do this and Coinbase cannot? I'm assuming there's some development and risk involved but what work is involved in adding a new coin?

Exchanges that offer trading on hundreds of currency pairs have to deal with UI clutter and consumer confusion. For Coinbase, that's a much bigger deal than the arguably small technical cost to add the currency.

Now getting error message: Bitcoin cash purchases temporarily disabled.

I wonder if they're accepting the fork because transaction issues that core has. I mean, neither can handle the transaction load right now. I wonder how long till another fork.

Would anyone know why a small purchase from Coinbase would still be pending two full weeks or more after funds had left my checking account? Their support isn't too helpful. I've made other successful buys and sells, but one transaction is just stuck pending it seems and they're not being very helpful.

This happened to me twice on GDAX, had them clear it out for me within 24 hours via support. No explanation given.

Best chance to buy Bitcoins in weeks ;-)

I wonder what will be the next asset they will launch on coinbase. I sure can buy up now and wait :-)

All this cryptocurrency talk has inspired me to understand the innerworkings of exchanges -- so how does a company like Coinbase scale to meet the demands of new customers? Surely they're not the first company to deal with this problem.

I don't think the problem is scale, the problem is there are multi-exchanges for the same asset. You can't trade GOOG, or TSLA on both NYSE and the NASDAQ for precisely this reason - a run up on one exchange will cause the entirety of money to shift for arbitrage. This is the real problem they are facing, imho.

Actually you can trade GOOG and TSLA on both NYSE and NASDAQ. RegNMS is what prevents inter-exchange arbitrage.

Actually, these stocks are traded on both NYSE and NASDAQ (and 10 other exchanges, including IEX), but Reg NMS promises the customer to get the best price on any exchange

Are you implying that arbitrage is the main source of trading volume on these exchanges?

And if so, how would arbitrage be a viable long-term strategy given

1. long block-times which prevent quick movement of cryptocurrencies across exchanges

2. strong AML/KYC which prevent flow of capital between countries (e.g. United States and Korea)

Ehhh, you can definitely trade the same stocks on multiple exchanges at the same time. You are confusing listings with trading

Up 50% from past 24hs. Previous ATH was ~2500, now at USD 3100 at Coinbase. I was wondering what triggered it. This morning was already at a high price ~2100. It was somewhat stable around ~1700 just two days ago.

I'm pretty sure simply being available on Coinbase/gdax triggered it. There are tons casuals like me who just use that.

The commenter you're replying to is saying that he "was wondering." My reading of his comment is that earlier today he was wondering why Bitcoin Cash was up so much (prior to the Coinbase announcement).

Now the price action makes sense. There were insiders who knew today was the day that Bitcoin Cash was coming to Coinbase and the price was up on that info. It's really a comment on the nature of unregulated crypto markets and insider trading.

there were other BCH related announcements like Bitpay this week...

there were other BCH related announcements like Bitpay...

Insider crypto trading is a giant issue and it's extremely fucked up.

FYI: «Coinbase maintains a strict trading policy and internal guidelines for employees. Coinbase employees have been prohibited from trading in Bitcoin Cash for several weeks.» https://mobile.twitter.com/coinbase/status/94329039141917491...

Or what? They get caught (highly unlikely) and if so, fired (very wealthy now, and quite employable)? Hard to see a downside to breaking that "strict" rule.

They get to graduate to running a hedge fund or an ICO for being a former Coinbase employee :)

They can simply ask a friend or buy them anonymously. I don't see how this rule could be enforced in practice.

That's what crypto is about right? Libertarianism, crypto-anarchy, no governments or control because FREEDOM! You get what you ask for.

Cryptocurrencies are not securities and not subject to insider trading or market manipulation regulations.

Yesterday it was hell as I was caught on the other side of a trade.

I've been successfully day trading making $300/400 a day, and it's great. But I missed out.

Missed out.

And had to hold overnight.

they say trading BCH in EURO is available immediately but on GDAX it says it's not available yet... Anyone knows when we can expect this to be available?

Anyone know what happens if I return coins I had pulled out before the fiasco this summer? Will my acct reflect a balance from both coins?

No. Use your wallet to split out your BCH.

Edit: I was able to login after several minutes of downtime.

I would urge others to buy a hardware wallet and not store your coins with Coinbase.

Haha just not yet, been trying all day to buy it

I wonder how much money Coinbase employees, friends and family made by insider trading on this announcement. Gotta love unregulated markets!

The markets aren't unregulated, the regulations just haven't been enforced much yet.

Real talk though. Why does it matter? No skin off my back.

Are you looking for an explanation for existence of insider trading laws?

Is this actually insider trading? Why? According to SEC.gov:

> Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security

Bitcoin Cash is not a stock or a security, so it's questionable whether this concept even applies. But even if you considered it to be a security, then how is Coinbase's decision to list Bitcoin Cash on their exchange somehow in breach of "a fiduciary duty or other reltionship of trust and confidence"?

Perhaps there is some other SEC regulation they might be violating about how the operators of exchanges can trade on their own exchange, such as front running, but it doesn't seem like that would have anything to do with insider trading.

I agree that it's possible that Coinbase's decision to begin trading this asset could influence its value, but that doesn't make the action insider trading. It's fine to take actions while expecting to influence the value of an asset - see for example the massive short position that Ackman took against Herbalife. His public media campaign to discredit the company was expected (calculated) to drive down the value of their stock, but is the fact that he took out short sales in advance of that action "insider trading"? No.

Specifically with regards to this situation. Who is harmed?

Market participants who sold BCH earlier today before the announcement to insiders who bought knowing that the price was sure to rise after this announcement?

But they were selling anyway. What difference does it make if they sold to insiders? If anything, the insiders gave them a better price.

As I explain on another comment, there is one thing that is insider trading as acting on priviledged information, and the other is provoking the situation that allows insider trading. The latter is pure fraud to me. Coinbase deliberately hid the release date and deceived the public while put themselves and their organization in a place to profit with insider trading.

Insider trading laws gamify the finance industry by reducing the level of accuracy with which people are permitted to trade in order to increase the liquidity in the market. I believe this is done to increase stability.

It's purely an economic decision to have it be illegal, I can't see anything inherently immoral about it. Some people consider breaking the law to be immoral even when the activity would otherwise be ok however I suspect most people that get angry about insider trading do so because its an activity associated with wealthy wall street types and they're really just angry at wealthy wall street types.

Exactly the first thought that came to my mind.

BCH up 30%. I wonder how many Coinbase employees bought BCH throughout this past month.

Also. it's easily predictable that introducing a new currency will temporarily affect the other currencies negatively.

Very gray area.

as pointed out by another commenter[1], this move was publicly announced

https://news.ycombinator.com/item?id=15966191

Release should have had a date. All day there were weird things going on , with miners network pollution and seemingly pre-coinbase trades.

Coinbase once again exposes itself to extreme public scorn by screwing over its users.

FTFA:

Coinbase maintains a strict trading policy and internal guidelines for employees. Coinbase employees have been prohibited from trading in Bitcoin Cash for several weeks.

Now, how would Coinbase know if an employee traded BCH on another exchange?

They wouldn't know of course, but that's not the point. The point is to cover their own ass if they get in legal trouble, by saying "well, we told them it was prohibited, and made them sign stuff".

It's the same reason companies make all their employees go through sexual harassment training. Not because they actually believe such training reduces sexual harassment, but rather because they want to eliminate liability.

Rubbish.

Someone who works at Morgan/Goldman/JPM/etc cannot trade on an account at a different brokerage on the announcement. If they do, they will get nailed and most likely go to jail

This isn't the stock market, this is unregulated.

So Coinbase should stop pretending that "three are rules"

BCH isn't a stock, it's a currency. I don't think there are any insider trading rules for currencies.

Coinbase has state licenses. It is regulated.

yes, but there aren't any regulations regarding insider trading of currencies.

Thought experiment: Just say Citibank adds the Mexican pesos to their products, USA & international, side by side to all their USD products. If citibank bought pesos before the announcement, would they be engaging in insider trading? (Pesos are just for illustrative purposes, replace with your local currency)

If so, would every bank need to halt trading in a currency before adding it?

Pesos are already widely available to retail investors so it isn't really comparable to the situation with BCH. The average US crypto investor is only buying what is available on Coinbase (note that its one of the top apps in the iOS app store...), not jumping through the hoops needed to use Bitfinex, etc.

Here's a more appropriate analogy. A penny stock with the symbol BCH is lightly traded over the counter by institutional investors via pink sheets. The New York Stock Exchange decides to list the stock for trading, making it easily available to everyone with a TD-Ameritrade/Robinhood/ETrade account but does so with no pre-announcement. Should NYSE prevent their employees from buying the pink sheet over the counter prior to the announcement?

If citi's employees especially those with licenses do that they will lose their licenses and most likely go to jail. Which is why one does not front run based on insider information when one works for that company.

fx market is not regulated like that actually. frontrunning is not necessarily illegal.

Exactly. You forget who makes the rules.

For instance, employees of the SEC, are not prohibited from trading on insider information (they are to an extent, as in they can't do leveraged short-selling before in investigation is made public, however, for instance, selling out of a position before investigations become public knowledge is obviously common).

https://www.institutionalinvestor.com/article/b15dlrvg8cxkmv...

This is like asking "do high-level (and even medium-level) government employees have to pay taxes ?" (I'm European).

Nope. Insider trading is a unique prohibition in the equities market, regulated and enforced by the equities regulator.

Shoutout to the rich guys that spread the misconception that an information advantage is illegal

Your thought experiment is flawed at many levels. To look at only one aspect - the question is not on the company (bank) but on people.

The answer is Yes.

Banks will ban it's employees from buying those pesos because of something called "conflict of interest". It wouldn't matter if the price jumps or not. In fact, a conflict of interest can exist even if there are no improper acts as a result of it.

There are no laws against it for cryptocurrencies, yet. But, if something like this happened, it is unfair to Coinbase's customer.

Eh it's up 500%+ from virtually all summer. Investing makes way more sense than trying to day-trading a 1-day 50%.

Coinbase announced they'd support bitcoin cash by the end of the year. It's the last normal business week of the year. Basically anyone who paid attention to their announcements knew it was impending.

Point of clarification: there was no prior announcement that Coinbase would support trading of BCH. In the blogpost to which you likely refer, it is made clear in the last two paragraphs that they would enable withdrawal of existing BCH balances but trading support would be determined at a later date [0]. This closely follows how they enabled the temporary withdrawal of Ethereum Classic after its fork in 2006 [1].

[0] https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbd... [1] https://support.coinbase.com/customer/en/portal/articles/252...

They added API support 3 days ago.

Right now, as explained in op, the exchange is POST only. Nothing is being executed.

Is that not enough announcement?

I choose to profit

That's actually consistent with other currencies though. You can inside trade on forex markets.

Also commodities if I remember correctly, which are regulated as well.

Also there's a big theoretical and serious discussion in financial economics on why insider trading is even net bad. In some ways aren't stock analysts "insiders" with respect to your average SV engineer investing, and isn't an SV engineer who is able to fully understand a balance sheet an "insider" with respect to gambling grandma in Iowa?

My understanding is that "knowledgeable outsiders", in executing trades, effectively make accessible whatever esoteric-but-technically-public information they had to the market, and so help prices adjust toward their correct value.

Knowledgeable insiders, on the other hand, can execute "hidden" trades that aren't revealed to the public market—and so don't provide information to the market. This distorts the market, moving the value of the instrument away from its true price.

If these hidden trades (dark pools?) are possible, why can't knowledgeable outsiders also use them?

Well suppose the CEO of ACME Pharma knows a major drug trial just failed. If she sold massively and pushed the price down, wouldn't that cause the lower price to be reflective of the actual real valuation of ACME (which is lower because they don't have a major drug now).

Of course, I wouldn't want to be the guy on the other side of that trade. But then again a casual grandma probably doesn't want to be on the other side of the trade of a multimillion dollar research team either.

Trades made with/without insider knowledge reveal the same amount of information to the market since the market doesn't know what made you decide to trade. It's illegal for a few reasons - it encourages quid-pro-quo relationships between investors and businesses, makes the good investment opportunities only available to those with privileged relationships (and magnifies 'the rich get richer' problem), and poses serious conflict of interest problems to everybody involved.

No, it has nothing to do with analysis of data, it only has to do with access to information that others do not have access to.

Bitcoin Cash was added to the public API yesterday I believe.

is it illegal to use insider info on unregulated commodities? i don't believe so...

IANAL, but with the existence of Bitcoin futures on CME and CBOE, the CFTC presumably has some jurisdiction over insider trading in BTC spot markets, insomuch as they affect futures prices.

Under the 'Misappropriation Theory', insider trading occurs when confidential information is misappropriated for a trading gain. This interpretation of the law has been used by the CFTC in the past [0] to prosecute insider trading cases.

Did Coinbase employees (or their friends/family) commit IT under this definition? I don't know, but if I was the General Counsel of Coinbase I would be hastily typing up a mandatory internal compliance policy for immediate disclosure of cryptocurrency holdings, pre-clearance of all cryptocurrency trades, and a minimum 30-day holding period to discourage day-trading. Such policies are very standard at traditional financial institutions that have access to material non-public information (MNPI) about the financial markets.

[0] - https://www.cov.com/-/media/files/corporate/publications/201...

If you find yourself asking "Is it illegal to do something not explicitly barred by the law but something that seems dishonest?" then you should be prepared for consequences.

Prosecutors, judges, attorneys and even jurors aren't stupid. There are remarkably broad statutes out there, fraud or theft or something could reasonably be brought to bear upon you.

I think it would be pretty cool to see Coinbase employees go to prison for insider trading. Not out of any sort of vengeance, I just think it would be a huge paradigm shift in cryptoland. Continuing saga between regulation and pure greed/manipulation of cryptos. I assume most country's (especially the US's) federal regulations are way too slow to verify this is in fact true illegal insider trading though?

I don't really know if any Coinbase employees really committed insider trading - I'm just speculating based on the fact that the price of BCH appeared to rise significantly before the public announcement.

Its also unclear what internal firm policies that Coinbase has in place to prevent insider trading, see my reply to hisabness for more on that and an explanation (note: IANAL) of how regulation could be applied.

If a Coinbase employee wanted to trade on inside info they wouldn’t have to do it through Coinbase either. They could do it on another exchange.

The price went up before the announcement because the whole world has known BCH trading was extremely likely and imminent for 2 days: https://www.reddit.com/r/btc/comments/7kfzbi/attn_bitcoin_ca...

There is nothing cool about tearing people away from their families and locking them in tiny cages for such a nebulous and arguably victimless "crime."

Victimless? How so?

Um, I don't mean to be rude here, but "victimless" usually means that there is no victim, and that's the point. To paraphrase your question, "In what way is there no victim?" seems a bit like trying to prove a negative, so let's look for the positive instead.

Let me try to identify the potential victims here: 1. The victim might be "the guy who bought the BCH that the employee was selling", seeing that he could have bought for a cheaper price had the employee not insider traded. 2. The victim(s) might be "all the other investors of BCH", with the thinking that the insider trades devalue BCH (somehow?). 3. the victim(s) might be "the customers of Coinbase", because ... I'm not sure, maybe jealousy?

I'm trying to be reasonable here, but everything I wrote up there seems outlandish or silly. (1) a person who enters into a buy for X agrees to buy for X, and calling somehow who willfully enters into a trade a "victim" is an incorrect use of the English language; in (2), nothing is devalued, the additional buy from the employee should actually increase the coins value, as it represents a higher demand; and (3), 'jealousy', seems like the only thing left. If you're upset that someone at Coinbase managed to earn $$$$ on their trades, but you only earned $$, then we call that emotion "jealousy", and that would be the harm. It would be a harm to your ego, and now you would think that you were a victim. It seems ludicrous to me to support the tearing apart of families (as was suggested earlier) simply because someone is jealous of money.

I can't come up with a reasonable definition of who the victim is, who was harmed, how they were harmed, etc. This isn't proof of the negative, "victimless", and certainly there could be other real victims here (maybe Coinbase itself is the victim? or the US Government? or "the whole of the American public"?); but, it should probably not be assumed to have a victim unless some real, actual harm can be identified. IOW, there is no victim without an identifiable harm.

I'm glad you replied to that comment before I saw it, because you put it far better than I could have myself. Thank you.

That paradigm shift already happened with Charlie Shrem.

This was announced on Aug 3rd: https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbd...

At that time the price was just under $500 so the public had plenty of time to get in. Also note that the price could very well drop as Coinbase customers sell their "free" BCH.

> Once supported, customers will be able to withdraw bitcoin cash. We’ll make a determination at a later date about adding trading support.

It's the trading support part that was not public, and that part is very important as it significantly widens the population of people who can easily purchase BCH.

Yeah, but the exact timing was not announced, and it was known to some insiders. Knowledge of that timing would be worth a very large amount of money.

Outsiders: Bought at $500, sold at $3,500, 600% gain in five months.

Insiders: Bought at $2,500, sold at $3,500, 40% gain in a few hours.

So yeah, insiders could do great on an annualized basis if they could do a bunch of insider trades in a row.

People who were watching closely had about 3 days notice. a BCH check box briefly appeared in their API key configuration tool a couple days ago and screen shots of it were posted on reddit. Anyone who didn't think Coinbase wasn't going to enable BCH trading was either in denial or not paying attention.

Yes, YCombinator, you should be proud; you've made a giant money sucking machine that will suck money out of clueless millennials, poor grandmas, and well, mainstream idiots. Here's to no government regulations!!

I have generally mixed feelings about insider trading, because in the end, people making decisions on best information looks like economically profitable for the system.

That said, Coinbase did more than insider trading today, they deliberately hid their BCash announcement to perform insider trading. That is straight down fraud to me. They provoked the insider trading situation.

if you watched the interview on fast money, you could tell they were going to start trading bit coin cash. obviously he couldnt come out and say it, but it seemed pretty apparent to me.

This is what bothers me the most. Coinbase previously had indicated only withdrawals would be enabled by Jan 1st, which means they'd have a form where you could claim your BCH and have it sent to your private wallet address.

Somehow this turned into "Actually we'll allow full trading. And surprise! We're not even going to tell you about it despite working on it for months, we'll just unleash it on a random Tuesday evening."

Definitely not possible to buy it today on coinbase as far as I can tell

What evidence do you have they performed insider trading? There is none. You are just speculating.

You are putting the burden of proof on an individual with no information access to coinbases operations. At the court of public opinion (or consumer opinion in this case), the appearance of corruption is enough to condemn.

Its pretty clear something happened because there was quite a commotion hours before it happened, which means market makers knew it was coming. I have documented message sbefore the coinbase announcement that something weird was going on, and so has the community. Not only that, coinbase gave the appearance of neutrality when it deliberately lied on release date and scope of release. For what purpose but to take advantage of the information arbitrage.

Coinbase sold its users today and as a portion of the community has been vocal about, I recommend leaving coinbase to another exchange that hasn't proven to screw over their users.

There was a commotion because we knew in the last 48h BCH trading was imminent: https://www.reddit.com/r/btc/comments/7kfzbi/attn_bitcoin_ca...

If you believe that is true, why didnt coinbase just announced they were releasing full BCH support earlier?

I don't know. Perhaps they wanted to pleasantly surprise all of us. Companies often do this with surprise announcements.

Coinbase prohibited employees from trading BCH in the weeks leading up to this according to their twitter.

Exactly how do you "prohibit" trading a crypto currency?

How does any company prohibit anything?

For insider trading on the US equities or options markets, the SEC has surveillance tools that flag unusual short term gains around corporate actions, and then check if any of the counterparties are insiders or related to insiders via marriage, etc.

Don't think anything on that level is being done in the cryptocurrency space.

Obviously a company has to trust its employees to a certain degree but it is certainly easier to conceal cryptocurrency holdings compared to a holdings of a traditional security.

Insider trading laws.

Surveillance + exchange audits + preservation of all communication.

The way it's usually done in the US is employees have a special brokerage account which is closely monitored (and probably won't let you trade during blackouts). Even if you had your own account on the side, the brokers would have caught it - this stuff is monitored very closely.

When it comes to crypto - all you need is an offshore exchange, of which there are plenty.

In all honesty, I don't know what is going on at Coinbase. It looks like a circus and I suspect its days are numbered. It is really depressing actually, not at all what the crypto community needs right now.

"In all honesty, I don't know what is going on at Coinbase. It looks like a circus and I suspect its days are numbered."

You must be joking. Coinbase is probably on track to be the most valuable company YC has ever invested in hands down. Their user growth is insane [0] at 2 million+ per month and a growth rate that appears to be doubling every month. They recently announced they had more users trading on their platform than Charles Schwab. [1] Schwab is a 70 Billion dollar company. I wouldn't be surprised if Coinbase ends up being bigger than YC's next three biggest hits combined.

[0] https://docs.google.com/spreadsheets/d/1NgvD2kFT69mSXuJPzPDu...

[1] https://www.cnbc.com/2017/11/27/bitcoin-exchange-coinbase-ha...

I'm sure the principals of Mt. Gox felt the same way.

At least before it got hacked.

All it takes is one slip-up.

Mtgox was done in by a pattern of criminal stupidity spanning years not some one off black swan event. Coinbase in contrast is a gold standard of professionalism.

> Coinbase in contrast is a gold standard of professionalism.

I hope you're joking.

Mt. Gox was orders of magnitude smaller than Coinbase is today.

Which is precisely why it would be foolish to store anything there.

this move by coinbase will prompt the gov to regulate trading cryptocurrency, which will lead to further legitimization of cryptocurrency..

so what you're telling me... is that this is good for Bitcoin?

Cash

I'm telling you that this is good for legitimizing cryptocurrency and its trading overall. And when when so many people start to perceive cryptocurrency as a legitimate currency, the price will eventually go up for bitcoin. This is an early stage mainstream...

> And when when so many people start to perceive cryptocurrency as a legitimate currency, the price will eventually go up for bitcoin.

Bitcoin doesn't work as a currency. It's slow, expensive and can never ever scale to handle even the needs of a small town.

> This is an early stage mainstream...

Keep dreaming.

>Bitcoin doesn't work as a currency No cryptocurrency is working as a currency today.

>Keep dreaming. its not functioning as a currency..no cryptocurrency's has a stable intrinsic value because not many people are using it as a currency YET. Everyone is trading cryptocurrencies, and it will continue like that to attract more people. the price will be stable when: 1. people outside the tech real start using it as a currency to buy stuff with (not to cash it) 2. the technology is still so expensive.

its like the internet and hotmail back in 1996..you can argue whether it was a mainstream or an early stage mainstream..it all depends on your "perception"

It's nothing like the internet or hotmail. Bitcoin is hot air. There is no "there" in cryptocurrency. It is inefficient, slow and solves no real world problem. Our existing infrastructure works just fine for 99% of all users.

Lets not even forget that bitcoin is 9 years old. If it was gonna catch on, it already would have. The only way it has "caught on" is a pump & dump get rich quick scheme.

> It's nothing like the internet or hotmail. Bitcoin is hot air. There is no "there" in cryptocurrency. It is inefficient, slow and solves no real world problem. Our existing infrastructure works just fine for 99% of all users.

That doesn't matter does it, I remember seeing a TV show interviewing random people on the street 20 years ago asking what they thought about cell-phones. Everyone said they don't see a future for this new gadget, they have a phone at home and can call anyone whenever they want, they don't want to be disturbed at anytime and everywhere. Cell phones were perceived as more of a nuissance than solving a real world problem, the existing infrastructure worked fine for 99% of all users.

It has advantages. You can send/receive unlimited amounts of money without some third party deciding to block or reverse the transaction. It is a single currency for the world. It can't be hyperinflated.

Per their twitter, "Coinbase employees have been prohibited from trading in Bitcoin Cash for several weeks."

https://twitter.com/coinbase/status/943290391419174912

That totally stopped everyone I am sure.

And there was no abuse for financial gain and everyone lived happily ever after

bahahaha please write my children's bedtime stories

First book: "The cat in the hat loses his hat" a story of crypto currency

That has to be the second one actually.

"The cat in the hat puts his hat on the blockchain"

So have your SO/friend/etc. buy a bunch of it and slip you a gift card as a Christmas present? There's no law banning insider trading; Coinbase cannot really enforce anything beyond their own contractually-bound employees.

I actually find it interesting/relieving to have a market where insider trading is legal. If you got your hands on inside information, more power to you!

In the stock market, insider trading being illegal effectively only helps institutions who are already rich, have access to high-frequency trading, effectively do insider trading anyway and get away with it, and puts the average Joes sitting at home with an eTrade account at a distinct disadvantage.

There are things that cryptocurrencies could do to avoid insider trading becoming abused. For example, ensure that larger trades take a long time. Trades of 1000 BTC should require days to execute, while trades of 0.1 BTC should execute in milliseconds. That would help de-throne the hedge funds of the world who have access to more information than average Joe can process, and empower average Joes to leverage everything they know, without messing up the market dynamics for small quantities.

Then people would just do 10'000 0.1 BTC trades....

Many people predicted the opposite of this would happen though. That when coinbase users got their BCH freed up they would dump it on the market and tank it, and part of the announcement includes freeing up users' BCH.

There's probably a pump going on by Ver etc.

People originally assumed that Coinbase were only going to allow people to withdraw their BCH and not open up trading, because that's what Coinbase had said they were going to do right up until the point when they suddenly did open up trading on BCH.

> There's no law banning insider trading

This is incorrect.

He means it isn't insider trading if it's an unregistered asset I assume.

I think he's referring to cryptocurrencies as opposed to listed securities.

Which would be incorrect. Bitcoin spot markets are protected from insider trading from the CFTC if no one else due to the influence the spot price has on derivatives markets. Moving the price 30% in one day would absolutely fall under their jurisdiction, and there are laws on the books since 2010 making such insider profits illegal.

Pinky promise!

There is a huge amount of non-public information out there that insiders can use for profit, and it will always be the case no matter what regulations you enforce.

It wasn't a given the announcement would skyrocket BCH, however, I'd be shocked if anyone at Coinbase wasn't extremely successful with Crypto right now. The fringe benefit of being in an environment where they breath cryptocurrency is digital gold, or at least a strong multiple of their salaries.

Gotta love unregulated markets indeed! Insider trading makes markets more efficient by moving the market price closer to the postdisclosure price. That is good; contrary to Chesterton's fence, most market regulations with plausible-sounding reasoning justifying them do not have a good reason to exist as they outrun mainstream understanding of economics—which should not be confused with the opinions of regulators or even polls of professional economists.

From the article on insider trading in The Concise Encyclopedia of Economics:

> Who benefits from regulation of insider trading? One group of beneficiaries is market professionals—broker-dealers, securities analysts, floor traders, arbitrageurs, and institutional investors. The reason is that they are “next in line” for trading profits, as they possess an advantage over public investors in collecting and analyzing information (Haddock and Macey 1987). Regulation also, of course, benefits the regulators—that is, the SEC—by giving that agency greater power, prestige, and budget (Bainbridge 2002). However, the benefits from insider trading laws to small shareholders, the alleged primary beneficiaries, have been extensively debated.

From www.econlib.org/library/Columns/y2015/Hooperharmed.html:

> Insider trading laws are yet another example of government's desire to capture and exercise political, regulatory and legal power, gain huge monetary awards, and garner favorable PR, all for the sake of prosecuting victimless "crimes" and promoting misplaced notions of fairness. Insider trading should be embraced for its beneficial effects on market efficiency and left as a private matter for those companies interested in preventing it. Consequently, the SEC should not have a leading role in insider-trading cases, especially if the purpose is to benefit one group of insiders at the expense of another.

Looks like coinbase chief executive saw your post ;P

https://news.ycombinator.com/item?id=15969102

From the link's tfa

> The company's chief executive intervened after several market watchers posted allegations of illegal activity on social media sites.

Seems so perfectly timed for the latest drop and issues with bitcoin its self

Why was this banned from the front page?

it's hilarious how many suckers will get drawn to this scam over and over.....

1.) omg this cryptocurrency is so transactional/rare

2.) nope. this isn't transactional at all! it costs me $350 to send $350!

3.) nope. it's not rare, coinbase just added ANOTHER transactional/rare crytocurrency!

4.) time to lose 80% on another cryotocurrency!

BCH is slightly better though because the transactions are basically free.

Just like any other altcoin that sees less transactions than BTC.

BCH has only even reached 60% of the transaction numbers of BTC in the last few days.

Yes, bigger blocks will let you do more transactions, but it'll scale linearly and then struggle to handle PayPal scale anyway. And bigger blocks aren't a free lunch.

You and I seem to have had very different differences in crypto currency.

1) Rarity does play a factor in some currencies. Others less so. You get to choose what is important to you.

2) Transaction fees for BTC are hovering at $30 last I checked. Still huge but other coins have low to no fees.

3) There is only one vitalik. Some resources are scarce.

4) The only way you could have lost money in the last year was by day trading. Don't do that unless you are ok with extreme risk/reward scenarios. You can easily lose 80% with a few bad trades.

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