Bitfinex exchange owner admits to using inside information to trade on own platf

[mayax]

https://twitter.com/DoctorBitcoin/status/557526205709037568

The post was deleted on reddit but this guy saved it.

also see: https://bitcointalk.org/index.php?topic=930707.new#new

[newIndia]

https://twitter.com/DoctorBitcoin/status/557526205709037568

The post was deleted on reddit but this guy saved it.

also see: https://bitcointalk.org/index.php?topic=930707.new#new

This is an expected behavior on unregulated exchanges ?

[Walsoraj]

https://twitter.com/DoctorBitcoin/status/557526205709037568

The post was deleted on reddit but this guy saved it.

also see: https://bitcointalk.org/index.php?topic=930707.new#new

I've suspected this for a long time. Exchange owners or their employees tell other privileged traders of incoming fiat deposits. Insiders pump, forcing new money to buy at inflated prices. Then dump once bid depth surpasses insider buy-in price.

The bitcoin cult suffers from Stockholm syndrome. They are busy down-voting reddit posts on the subject and rationalizing/excusing BFX's conduct. 

[mayax]

https://twitter.com/DoctorBitcoin/status/557526205709037568

The post was deleted on reddit but this guy saved it.

also see: https://bitcointalk.org/index.php?topic=930707.new#new

This is an expected behavior on unregulated exchanges ?

correct.unregulated exchanges.

the "stupids" (normal people) are losing a lot of money and the "smart guys" (exchangers) are earning millions. Why? Because the "stupids" are doing nothing. Normally, all the Bitfinex clients would have to withdraw their funds and use other so called "exchanger" (even all of them are the same).

I am sure that many of you are not blind and not stupids. How can you tolerate a such behavior?

Bitfinex is making money based on YOUR losses. Wake up !

[gabbello]

It was completely the opposite. He said he does not do that. I'm not saying he is doing it or not, just that he never admitted doing it.  

[Walsoraj]

This is just ridiculous...

None of us at Bitfinex take advantage of any inside information, and each of us monitors each other to make sure that we are behaving ethically. However, how would we go about obtaining bitcoin? We work hard to build a good exchange, because we believe in bitcoin, so we should go trade on another exchange? I have known Phil a long time, and he is extremely ethical. I, for one, use bitcoin in order to withdraw my paycheck. I usually place a small market order once a month, but I have no idea what the state of hidden orders are, or whether the market is going up or down, and I don't much care about those things. I need to convert a certain amount of dollars into the equivalent amount of bitcoin, so I just buy some bitcoin.

I'm not sure how this works in the "real world", but I am pretty sure that someone who works at Nasdaq can still trade stocks that are listed on Nasdaq. They aren't getting any special information, or access to a VIP service, but they still probably have a retirement account, or something along those lines, and still have investments. I don't think that because someone works at Nasdaq, they cannot own Apple shares in their retirement account. So, I am beyond annoyed that people think that someone who is interested in bitcoin enough to work in the bitcoin space, surprise, surprise, buys bitcoin...what is the alternative, that everyone interested in bitcoin enough to work in that space cannot use their own product?

Anyway, I think most people have enough experience with Bitfinex to know that we value our reputation as a fair place to trade, and specifically keep rules in place that cost us money because we think that the benefits of a fair marketplace far outweigh the small short term gains of cheating. I've been a big fan of bitfinex since before I started working here, and I haven't closed my account just because I got a job here.

Let me get this straight. You acknowledge Phil's story and admit to trading on your own exchange but maintain, "there is no insider trading, because: believe me."

Someone else plz quote mjr before he edits/deletes.

[QuestionAuthority]

You mean after MtCox people still refuse to accept that the price is being manipulated by unregulated exchanges? Wow, clueless.

[BillyBobZorton]

You mean after MtCox people still refuse to accept that the price is being manipulated by unregulated exchanges? Wow, clueless.

We dont need regulations, we need p2p exchanges. Waiting for Coffeine like its xmas.

[mayax]

What many BTC fanatics does not want to see is that there are only 4-5 BIG exchangers.

These exchangers are making exchanges between them(offline). You will never see them trading between them "online"(in public).

ALL the little exchangers are using the big ones in order to process their BTC.

So, there are is a strong relationship between them. The big exchangers(including Bitfinex) see things normal traders cannot, like hidden orders, the size of everyone's accounts, the open margin positions of accounts, exact trading activity of each user, how much USD is flowing into and out of the exchange....

SEC defines insider trading as any securities transaction made when the person behind the trade is aware of nonpublic material information, and is hence violating his or her dutyto maintain confidentiality of such knowledge.
A person is liable of insider trading when he or she has acted on privileged knowledge in the attempt to make a profit.

[redsn0w]

I think we need a decentralized exchange , for trade directly  buyer <> seller without any intermediary  (like bitsquare).

[jonald_fyookball]

I think we need a decentralized exchange , for trade directly  buyer <> seller without any intermediary  (like bitsquare).

explain how that would be possible when dealing with fiat.

[mayax]

I think we need a decentralized exchange , for trade directly  buyer <> seller without any intermediary  (like bitsquare).

explain how that would be possible when dealing with fiat.

He didn't think when he wrote that.   forgive him !

[redsn0w]

I think we need a decentralized exchange , for trade directly  buyer <> seller without any intermediary  (like bitsquare).

explain how that would be possible when dealing with fiat.

He didn't think when he wrote that.   forgive him !

At least check this site  (beta) : https://bitsquare.io/

It is possible ....

[gjgjg]

Not sure this is avoidable until regulation kicks in (similar to trading standards with current trading systems) or how much impact it actually has on the markets.

imho, he has inside info on users accounts and how they could impact price movement, but its not all that huge a benefit as you might think and wouldnt be that easy to exploit.
we can all see the order book of the exchanges, knowing which accounts have lots of 'potential' with high balances to move the market doesnt mean they actually will use that potential in a predictable way and cause obvious price moves to exploit. not sure what other info this guy could have that cant be inferred from the public orderbook..
 
unless this guy was actually buying and selling in large amounts to directly affect the markets (like bots), not so sure the shock value is very high on this story (in terms of impact on the average user).  

probably damages the reputation of the exchange more than anything... im sure hes getting more money from the fees than any insider trading info.

could be wrong ofc! i dont use their platform so not sure how reliable it is.

[turvarya]

Not sure this is avoidable until regulation kicks in (similar to trading standards with current trading systems) or how much impact it actually has on the markets.

imho, he has inside info on users accounts and how they could impact price movement, but its not all that huge a benefit as you might think and wouldnt be that easy to exploit.
we can all see the order book of the exchanges, knowing which accounts have lots of 'potential' with high balances to move the market doesnt mean they actually will use that potential in a predictable way and cause obvious price moves to exploit. not sure what other info this guy could have that cant be inferred from the public orderbook..
 
unless this guy was actually buying and selling in large amounts to directly affect the markets (like bots), not so sure the shock value is very high on this story (in terms of impact on the average user).  

probably damages the reputation of the exchange more than anything... im sure hes getting more money from the fees than any insider trading info.

could be wrong ofc! i dont use their platform so not sure how reliable it is.

If you see, that a big whale is moving in a lot of fiat, you know BTC will go up, if you see he is moving in a lot of BTC, BTC will go down. That is a simple prediction, you wouldn't even need a bot for and even I, can think of.

[Flashman]

Not sure this is avoidable until regulation kicks in (similar to trading standards with current trading systems) or how much impact it actually has on the markets.

imho, he has inside info on users accounts and how they could impact price movement, but its not all that huge a benefit as you might think and wouldnt be that easy to exploit.
we can all see the order book of the exchanges, knowing which accounts have lots of 'potential' with high balances to move the market doesnt mean they actually will use that potential in a predictable way and cause obvious price moves to exploit. not sure what other info this guy could have that cant be inferred from the public orderbook..
 
unless this guy was actually buying and selling in large amounts to directly affect the markets (like bots), not so sure the shock value is very high on this story (in terms of impact on the average user).  

probably damages the reputation of the exchange more than anything... im sure hes getting more money from the fees than any insider trading info.

could be wrong ofc! i dont use their platform so not sure how reliable it is.

I concur, and if he has any advance knowledge advantage, it's only on the fiat side, since other people can figure out exchange input addresses and see when BTC is flowing into them heavily.

[turvarya]

Not sure this is avoidable until regulation kicks in (similar to trading standards with current trading systems) or how much impact it actually has on the markets.

imho, he has inside info on users accounts and how they could impact price movement, but its not all that huge a benefit as you might think and wouldnt be that easy to exploit.
we can all see the order book of the exchanges, knowing which accounts have lots of 'potential' with high balances to move the market doesnt mean they actually will use that potential in a predictable way and cause obvious price moves to exploit. not sure what other info this guy could have that cant be inferred from the public orderbook..
 
unless this guy was actually buying and selling in large amounts to directly affect the markets (like bots), not so sure the shock value is very high on this story (in terms of impact on the average user).  

probably damages the reputation of the exchange more than anything... im sure hes getting more money from the fees than any insider trading info.

could be wrong ofc! i dont use their platform so not sure how reliable it is.

I concur, and if he has any advance knowledge advantage, it's only on the fiat side, since other people can figure out exchange input addresses and see when BTC is flowing into them heavily.

How do you figure out exchange input addresses?

[Klestin]

It was completely the opposite. He said he does not do that. I'm not saying he is doing it or not, just that he never admitted doing it.  

Glad I'm not the only one who can read.

[jonald_fyookball]

I think we need a decentralized exchange , for trade directly  buyer <> seller without any intermediary  (like bitsquare).

explain how that would be possible when dealing with fiat.

He didn't think when he wrote that.   forgive him !

At least check this site  (beta) : https://bitsquare.io/

It is possible ....

Nice...is it live?  Being used?

[General_A]

I think we need a decentralized exchange , for trade directly  buyer <> seller without any intermediary  (like bitsquare).

I think we need a decentralized transparent exchange