Skycoin CEO Gets into a Mess on Insider Trading, SEC Informed as Discontent Grows
Skycoin is about to get itself into deep trouble should the recording that just emerged get into the hands of US regulators (SEC, CFTC) as their CEO just admitted that some of his team members and telegram admins have been orchestrating a constant manipulation of the coin. The recording, reported by Jared Dunn, under the Twitter handle @JaredDu71247146, exposes some of the obviously illegal and unprofessional behaviors in cryptos.
Skycoin Insider Trading via Telegram Exposed
As said, Jared Dunn, has triggered quite a storm after presenting what appears to be solid proof of Skycoin CEO Synth caught up revealing some of the dirtiest and illegal malpractices in the Skycoin private telegram group, which appears to have been initiated after Sudo, the administrator, took over.
The tweet could read: "CEO Synth audio recording of his knowledge of ongoing insider trading involving his team and his telegram admins(Sudo) and a private insider trading group."
For those interested in more background information on Skycoin CEO, find below a video interview:
Additional comments by Jared Dunn include:
"This was obvious as the accumulation of skycoin before
@binance listing followed by the huge dump sell off reminiscent of the coinbase BCH listing. Obvious insider trading and the CEO of Skycoin is now busting people out. The big problem is Synth was well aware of this prior..."
"Look I'm providing information that was posted publicly. Am I calling a motherfucker out on some shady shit? Absolutely. Am I presenting authentic information from the source? Absolutely. Am I presenting baseless info without source or authenticity? Absolutely not."
Users Express Their Dissatisfaction
Certain users, such as the Twitter user @Mendozza1978 expressed their anger while making clear that Skycoin's telegram group has a rather obscure history: "Admitting insider trading you gotta feel for those genuinely caught up in this mess. No wonder they banned me for asking genuine questions. The
@Skycoinproject telegram has been toxic for a long time with infighting and rumours of fraud."
This is a serious matter and as CoinLive has been able to confirm, the
@SEC twitter handle has been notified of the situation by several users. As a reminder, rogue traders and illegal activities of this caliber are punished quite severely in Wall Street.
Supporters of Skycoin has started to express their discontent via Twitter or Reddit. In Twitter, @piedpiperkoin wrote, "this needs to get out there more, as a supporter of SkyCoin,I'mm deeply saddened by this." Meanwhile, AS_Empire[S] in Reddit notes: "This is the type of information that the SEC is going to hunt down when they are investigating cryptos. Pure idiocy to be involved in this type of stuff from his position. Not only makes Skycoin a pump and dump, it makes crypto look amateur in general."
SEC is Cracking Down on Ilegal Activities
Back in December 2018, in a CNBC article, the former chairman of the Securities and Exchange Commission Harvey Pitt said that SEC's crackdown on cryptocurrencies was about to get serious, noting "there is activity on the horizon," Pitt said.
The firm Morrison Cohen LLP, which specializes in business litigation and regulatory enforcement in securities, commodities, and cryptocurrency, wrote the following warning back in late February:
"Insider trading law is quite complex, and the overlay of the law on cryptocurrency products trading, much of which is untested and unsettled, only magnifies the complexity. But insider trading enforcement in cryptocurrency product markets is coming. Traders — especially insiders — should be wary and seek counsel. Good legal advice can be pricey. But failing to get advice ahead of a trade, and defending a lawsuit from the SEC or CFTC — or a criminal prosecution by the Department of Justice — can carry a far heavier cost."
Below are some basic principles listed by Morrison Cohen LLP that can help traders from undesirable trouble with the authorities.
- First, don’t trade in your own product, unless under careful and particular legal guidance. For instance, if you are a company officer, director, or insider, it is unwise to trade in your own coin offerings, or even to trade in your coins on the secondary market, without first getting legal advice about whether your trading might constitute a “classical” insider trading violation.
- Second, don’t trade on insider tips that are not generally known to the market as a whole. It’s not necessarily a violation, but it’s dangerous if the information was confidential. If you have heard about an impending move in a particular coin from an insider at the company, ask yourself: Did that insider have a duty to keep that information confidential? If so, why did she tell me? There may well be a duty of confidentiality attached to that information, so trading on that information may invite scrutiny.
- Third, if you are involved with a coin, do not tell others about your own product’s impending moves. Resist the temptation to give your friends tips about what your company is about to do with its coin; or about forks, splits, infusions to support a coin, major sellouts, or any other information. One insider, a lawyer, was recently convicted for tipping as part of a drunken brag made to a friend over dinner.
- Fourth, we are seeing rumors of “cabals” buying or selling in unison to move market prices for coins. Even if such groups are not acting on insider information, market manipulation is barred, and engaging in such activity is asking for regulatory trouble.
- Fifth and finally, anonymity will not protect you. Most coins can be purchased using cryptocurrency such as Bitcoin, Ethereum, Litecoin, etc., and many of those transactions are theoretically anonymous — tied only to a wallet address, which in turn is tied to a false name. Regulators are savvy to these tricks, and can discover the identities of even the technically savviest of bad actors. And if you intentionally misuse anonymity to violate the law, additional penalties — even criminal ones — may apply. (While nobody should break the law as a general matter, it seems particularly unwise to do so through a mechanism that is specifically designed to create an immutable public record in multiple locations.)
As a final thought, at CoinLive, we want to reiterate that until further regulatory presence is effective, the opaque nature of the market will continue to attract this type of malpractices, At the end of the day, a significant portion of the tokens/coins/ICOs are driven by questionable, unprofessional and rather shady marketers that are driven first and foremost by a quick money grab. While we won't venture to predict an actual implosion of all ICOs, it is these illegal cases that continues to justify a sounder regulatory framework whether market participants like it or not, one that achieves a rather optimal equilibrium between decentralization and security/minimal regulatory standards.
Join the CoinLive family and stay up-to-date with everything going on in the crypto universe