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Comment by JohnJamesRambo | Hacker News Reader

They do it down too. It’s not a secret or illegal. Here’s a post mortem from the guy that did it.

https://twitter.com/AlamedaTrabucco/status/14672197118301511...

Ready for a move up again soon.

That thread is just describing a long squeeze, which is an mechanism, not manipulation. The allegations in the linked article (against the same guy!) are quite a bit more detailed. And they absolutely are illegal in real money trading on licensed exchanges; whether they constitute crimes in the crypto world is sort of an open question.

"Ready for a move up again soon."

does not look like it

> It’s not [...] illegal

Errr - what?

I think you'll find that market manipulation is prohibited in the US under Section 9(a)(2) of the Securities Exchange Act of 1934, and in the EU under article 12 of the Market Abuse Regulation (etc.)

The US Securities Exchange Act defines market manipulation as "transactions which create an artificial price or maintain an artificial price for a tradable security".

See https://en.wikipedia.org/wiki/Market_manipulation

Is Bitcoin already classified as a tradable security or is it still Monopoly money?

People assign value to monopoly money now?

Edit: I get that many people here are ant-cryptocurrencies, but I think it is rather childish to call it monopoly money.

Yeah, a replacement set costs about three Euros on Amazon.

False dilemma

Products are regulated by the FTC

Commodities and currency derivatives that are traded are regulated by the CFTC

Securities issuance and securities trading are regulated by the SEC

so have fun with the federal trade commission rawr big teeth over there /s

It's not classified as a security.

they're based in Hong Kong so i'm not sure why US / EU regulation should apply

Actually, Alameda is based in the Cayman Islands as a legal entity

so it's a branch, uh. i'll never wrap my head around the complex corp structure of these crypto juggernauts

That's the idea.

It’s not a security, my friend. Crypto is the land of no rules and caveat emptor.

But Bitcoin options on e.g. LedgerX.com are securities (edit: regulated ones, that is), and anything that affects Bitcoin’s price is going to affect those derivatives’ prices.

Seems trading firms largely facilitate trading it btc and other cryptos. If they’re not legally regulated as securities then it may be time for that regulation. Or simply being disallowed for such trading firms.

LedgerX (now FTX US derivatives) is regulated.

(Sorry, forgot to mention it in the first comment -- that was the whole point of bringing it up in this context.)

> But Bitcoin options on e.g. LedgerX.com are securities (edit: regulated ones, that is), and anything that affects Bitcoin’s price is going to affect those derivatives’ prices.

But the SEC doesn't regulate mortgages even though there are derivative securities that are regulated. SEC regulates the asset backed securities but not the assets underlying those securities.

The question was whether the SEC would have jurisdiction. The manipulation affects securities that the SEC would have jurisdiction over, so it would follow that they do.

If not, it would be a pretty gaping hole in their mandate: "It's fine to manipulate X and profit from that, but not to profit from the regulated derivatives that closely track X."

They're regulated by the CFTC which also does not use the Securities Act

The CFTC literally just got a fraud statute in 2010

They mostly follow their earlier mandate and the new mandate doesn’t alter it too much

Trying to apply it to spot assets just because a derivative market is affected requires a huge stretch and risk of getting the agency embarrassed and curb stomped in the courts

You realize the world isn't beholden to stupid American laws right?

This guy apparently runs a company that has millions and takes advantage of inefficiencies. He's not creating the fake articles but he's using what it creates to his advantage. From what I understand, he will run the price down if there is low liquidity and trigger your stop losses and somehow make money doing it.

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