Great example of how most of the fluff around decentralized finance being more fair just because it is public and “open” is naive at best and a wolf in sheep’s clothing at worst. They claim that regulated banks are a moral evil and “wouldn’t you want something neutral and open and transparent,” conveniently forgetting that this will always favor those with money to market, attract, and sell to potential “buyers” (scam victims, really). Especially with the use of bots and crypto’s rather insular and hype-driven community, it becomes dangerously easy to get tons of dumb money, almost entirely from people who are desperate enough to believe it.
Coinbase is not decentralized finance, it's a centralized crypto bank.
> the fluff around decentralized finance being more fair just because it is public and “open” is naive at best
As another commenter pointed out, the investigation was triggered by this tweet [0]. How is that not more open and fair? If there wasn't a public record of the transactions, like in traditional finance, this guy would have likely gotten away with it.
Because there still exists informational asymmetry where the platform/exchange owners (and all employees privy to that information) still have material advantage over their customers but can now manipulate them easier than they can in traditional systems. With traditional systems, you have to purchase shares with your real name and thus regulators are able to detect patterns easier. In DeFi, these guys just spun up new anonymous wallets each time and if they were slightly better at it, they likely never would’ve been caught. Getting to parity of current insider trading detection in DeFi would require massive data analysis constantly keeping track of which wallets make suspiciously timed trades, leading to the same financial surveillance and de-anonymity DeFi wants to solve. One good tweet is not enough to validate the whole system.
You have a point, but also this wouldn't have been unraveled as easily in traditional financial systems. here's the tweet that is cited in the indictment, that a layman could trace (and did)
