Did Ethereum Developers Engage in Insider Trading Over the Constantinople Bug?

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On or around January 10th, ethereum’s price suddenly dropped with some speed for no obvious reason, falling from circa $150 to $120, a 20% drop.

Bitcoin and the rest followed with ethereum leading because it moved first and it fell by more than any other crypto. Including ETC, which experienced a 51% attack.

Some have put ETC’s 17% drop down to irrational markets being irrational, but now with the news of a bug conveniently revealed at a time as if designed for the most damage, was it because some knew of this bug before others and took trading action based on such knowledge?

We do not know. Nor has ChainSecurity, the team that revealed this vulnerability, stated when they discovered it.

What we know is that they revealed it at around 11AM London time to the Ethereum Foundation who later asked them to publicly disclose as they did at around 16:00 UTC. About an hour later this is then publicly revealed to devs, with a call held starting around 6PM UTC. A decision to postpone the fork is made at 20:08. The Coindesk article is published at 20:19 UTC. The Hudson Jameson tweet revealing the decision is made at 20:37.

On the 15th itself, ethereum’s price moved at around 4PM, falling a bit from $130 to $124. ChainSecurity’s¬†article so published, whoever knew presumably thought it would not be insider trading as it is unlikely traders were aware so quickly considering ChainSecurity is a fairly obscure company.

The main question, however, is whether the price movement on January the 10th was insider trading. A question raised because on January 15th itself, there wasn’t much price movement.

Arguably the market doesn’t care about these technical matters, but it may also be because yesterday’s events were priced-in on January 10th.

Thus the rest weren’t left with much to play despite the pretty unexpected decision to delay an upgrade that has been in development now and ready to launch for some two years.

Copyrights Trustnodes.com

 

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Ken Raphael

Thanks! Keep shining the light on these matters. We call this decentralization, but somehow a bunch of poobars still make all the call. How is this decentralized? I held this project in great regards and liked their foresight in attempting a DAO, but looks like VB or someone needs to straighten things out before they run one of the most promising projects aground.