Comment by Fade_Dance
10 hours ago
The physical world is within regulated frameworks though. There is no regulatory body in charge of the Ethereum blockchain.
The prosecution is alleging that there was a "promise" to the victim, which would let the transaction breach the boundaries of the crypto universe and be classified as real world fraud between two individual parties, but I just don't see how there was any sort of "promise" made here. First of all, they traded against an automated trading bot. Second, a bid or ask and market liquidity is not a "promise". I trade for a living and market makers suddenly pull liquidity all the time when it suits them, on millisecond time-frames. Granted, what the brothers did is essentially "spoofing" or posting bids and asks with the intent to move markets, so the question here to me boils down to is crypto spoofing illegal or not. Perhaps that depends on the jurisdiction/and or decentralized nature of the exchange that they were posting the offers on. I would think that if they can get charged for this then the majority of trading on thousands of "shitcoins" is outright illegal activity by extension though.
On a much more simplistic level, if you're coding up in ethereum arbitrage bot, and it makes a bad high frequency arb trade... tough luck? I was under the impression that this was sort of the point of crypto markets, to escape regulations and be a freeform, decentralized trading venue.
An automated trading bot is just some person/company's agent. It can still be a victim of a fraud.
I think spoofing should quite obviously be illegal. It's basically contract fraud.
> I was under the impression that this was sort of the point of crypto markets, to escape regulations and be a freeform, decentralized trading venue.
"Escaping regulations" is some libertarian fever dream. There is no such thing as "the law doesn't apply to you" if you make the right people angry enough.
THIS, Exactly!
>>"Escaping regulations" is some libertarian fever dream
The same for "Free Markets".
People scream about "Free Markets" and use that standard as a cudgel to complain about any regulation they do not like.
The fact of the matter is that free markets do not exist, or if they do, they are a very transitory anomaly, the exception that proves the rule. Every market has (varying) expectations of trust and honesty on each side, and sets of constraints on what is and is not a legitimate transaction or even objects (real or virtual) for transaction.
The only question is who is regulating the markets, and to what degree and with what intent they are regulating them.
Obviously, regulations can be too heavy or too light to sustain the market, and will need adjustment. In practice, regulations are almost always too heavy or light (especially from the POV of particular parties) and in need of frequent adjustment.
But the idea of "escaping regulations" and having an absolutely "Free Market" is a false idol and actively damaging in the real world, where the debate should be how much and what regulations are appropriate, not a stupid "all regulation is bad" cudgel.