Aug 4, 2022
The dominoes have already started falling..
I wrote this a long time ago back when the DoJ charged Nate Chastain.
I thought it was rather sad.
Poor Nate Chastain.
Wrong place, wrong time?
What did he do?
Well he basically had insider knowledge on which coins Coinbase was going to list next and used a bunch of anonymous wallets to buy the coins.
Once the coins are listed by Coinbase, the prices usually goes up and he makes a tidy profit by dumping them.
Classic front-running.
To be brutally honest, it probably happens all the time in the traditional finance world.
We just aren’t savvy or exposed to these dealings behind the gilded doors of Wall Street.
Nate didn’t even make that much profit from all the trouble.
He just had to be the example for the Feds.
And now they are moving fast, charging another ex-CoinBase employee recently for insider trading.
But you know what’s more worrying?
The feds are coming.
They want to regulate the unregulated.
Bringing laws to the lawless wild wild west of Crypto.
Taming the wild beast.
Trying to control a crazy Californian bushfire that literally burns anything in its path.
Why do they still try?
Perhaps retail investors are being burnt too badly?
Is it because there is simply too much money flowing that they cannot ignore?
Or is it really the future and they rather regulate it then ignore it?
Nate did a bad thing.
Was it illegal?
I think so.
Is it happening in TradFi?
Perhaps.
Is the Gov just making him an example for the rest?
Definitely.
Seems like the Feds are on a warpath, hunting down everyone and anything illicit and malicious in the crypto world.
See what others are saying:
“No surprise, many in the crypto world are freaking out after a federal grand jury indicted Nat Chastain for allegedly committing insider trading in NFTs sold on the OpenSea marketplace.”
“They will come for other people next. It’s starting,” wrote Loopify, a web3 builder with 190,000 Twitter followers.”
Roberto Nickson, founder of The M3taverse, an NFT media company, was also shocked by the news. “Insane,” he tweeted. “First of its kind. Won’t be the last. US Govt not playing games anymore. A lot more to come.”
Crypto was a wild west, no regulation meant infinite freedom and maximum effect.
Anyone could do anything they pleased and money was flowing.
More money meant more people coming into the space, which invariably leads to more bad actors and scammers preying on the innocent.
When more innocent people gets hurt, it becomes too hard for regulators and government to ignore, and they have to do something.
When the Feds and regulators step in and start cleaning up the streets, freedom is restricted and the very thing that made crypto fun and free is no longer there.
Its a cycle that could be virtuous or vicious, the regulators play a critical role in balancing the ecosystem.
The dominoes has already started falling.
Who’s next?
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Should the government regulate crypto?
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