Hacker News Reader

Comment by ludamad | Hacker News Reader

It's also a circuit breaker for regular brokerages too :)

Except Crypto isn’t regulated like stocks, so what your likely seeing is the exchange themselves shutting off service to lock in their customers while the exchange liquidates its positions.

Not Coinbase.

Who are they liquidating their positions to if they are shutting off access to exchanges? Every seller needs a buyer.

To all the decentralized exchanges where poor fools have their money locked up to be sniped.

Crypto isn’t governed by finra regulations. Its wild west, therefore wildwest tactics like front running etc are fair game.

Gg for those of you who maxed out credit cards to buy crypto

I have no doubts about front-running, but that would still mean they need suckers that have access to exchanges in order to liquidate their positions.

Or probably their servers didn't have the capacity to answer all those requests.

Nice try, but Coinbase is one of the most, if not THE most tightly regulated exchange out there. [0]

[0] https://help.coinbase.com/en/coinbase/privacy-and-security/o...

It’s the same company that attempted to keep its customers Bitcoin cash when Bitcoin forked right? Then only backed down after consumer backlash? Same company that tipped off its employees to buy Bitcoin cash to pump it before it was listed and then it was dumped on day 1?

> to lock in their customers while the exchange liquidates its positions.

Not an expert in legal and financial matters, but that sounds like it would start a FBI inquiry and even prison-time for all those involved.

> all those involved

Never.

so many FBI inquiries started from the GME fiasco, right?

You seem to be sarcastic but in fact yes the Robinhood/GameStop BS resulted in both a congressional probe and it skipped the FBI and went straight to the prosecutors at the Department of Justice.

Looks like very serious stuff happened indeed. I'm not sure about why I forgot about the congressional probe. Perhaps it's because for the people who lost or made money out of this nothing changed. It's good to know that when bad stuffs happens on regulated markets there will be a congressional probe while on the crypto market you have no prime BS on tv.

And it's not only Robinhood. Citadel, the market maker seems to be the brain behind all this price manipulation and media attacks on AMC and GME and selling a whole lot of synthetic shares on the market which when retail investors buy do not affect the price. I've been following this saga closely and am beyond horrified of how corrupt our free market is. It is not free at all and heavily manipulated.

I mean, maybe? If crypto is not bound by legal frameworks that govern traditional banks, what law would the exchanges have broken? The worst I could see happening is class action lawsuits, but not any kind of federal action.

These companies are backed by VC money, they can just drag out any court cases for years or decades until they have managed to buy themselves legal immunity. We saw it with Uber, Lyft, AirBNB, etc.

True. The whole run up in crypto has been so closely tied to Goldman backing Coinbase's IPO that it's laughable.

>> Except Crypto isn’t regulated like stocks,

Except that most of the time that means nothing in practice.

Just look at the GME saga and you have customers liquidated, customers not being able to buy, some not even able to sell. And on top of that the CEO of Interactive Brokers setting a target price for the stock.

All this so that few highly leveraged hedge funds can get away from the short squeeze cheaper along with their lender/broker.

Except it doesn’t mean nothing because there are a bunch of lawsuits against Robinhood, because the law provides a remedy for the bullshit they pulled.

Right! Let me know when they get their money back. I thought that when bad stuff happens on regulated markets at this level(i.e congresional probe etc) the DA, SEC, FCA or whatever agency is in charge is supposed to intervene and make it right. And btw it wasn't just RobinHood. At some point all the retail brokers(i.e Interactive Brokers) decided to hold various positions(buy/sell).

People can sue coinbase and any other shady broker as well. If you've lost 10K I doubt you are willing to spend even more to get it back in court be it coinbase, RobinHood or any other exchanger/broker with an army of lawyers.

Look I’m as jaded as the rest, like everyone. I’ve seen mass manipulation to promote bullshit wars. I graduated in 2008 and I am still told to shut up and say thank you to the banks for paying back taxpayer loans with interest that bailed them out of their own fraud and let them consolidate the market. I saw the CDC initially lie about masks to allegedly preserve supplies for healthcare providers. I saw the government take trillions in future taxes and mostly give it to businesses and for the FED to leverage into even more money to prop up the stock market (hey, all time highs again mid pandemic).

Still, for all the BS lawyers get, much of it deserving, for every lawyer behind the brokers/investors/funds there are others representing the victims. These are the types of lawsuits that include egos so big that sometimes discovery of emails/communications and the prospects of sitting for depositions result in a resolution, and even change.

It’s funny you mention the army of lawyers, because many of these cases have been consolidated and one 1 Zoom hearing were 141 lawyers…they represented the plaintiffs.

It's not about lawyers being good or not. What we currently have in financial markets is far from a lawful or just system. Just look how Musk manipulated TSLA and got away with a slap on the wrist $20 Million fine. He openly mocked it on twitter afterwards. And that's just a blatant example from someone who doesn't even care to hide it. That recent GME manipulation wasn't an exception, it's the norm. There are a ton of hedge funds engaged in "technically" illegal trades worth billions of dollars. But who's going to stop them when they're in uncovered short positions, which happens all the time. There is no higher power. The SEC is a paper tiger. If you want to sue Citadel, be their guest. The lawyer's fees and occasional fines they pay are already taken into account. Not that someone like you and me could even afford to bring a case against them.

Like all the people who went to jail for the 2008 crisis?

The customers that were liquidated were trading on margin (aka with borrowed money.) When you accept that borrowed money, you also agree that the broker’s risk department can liquidate your positions to ensure they get their money back.

I have not heard any anecdotes about US exchanges not allowing selling/exiting existing positions. In fact, on of the arguments from GMEanon is that disabling buying and keeping selling open drove the price down. There is nothing illegal about a broker disabling entering a new position (buying stock).

FYI, Fidelity, with nearly $5T AUM, is currently down.

Reply on news.ycombinator.com