Ishan wahi. A 32 year old former product manager at coinbase was arrested at the the airport on thursday. Trying to flee the us to india. Now the reason that service is very interesting is because of the charges involved a look.

This is literally the first time in history. Anyone is being charged with insider trading with respect to cryptocurrencies now. According to prosecutors why he had access to private and confidential information about currencies that would be listed on coinbase in the future. And he used that to tape off his brother and his friend to buy the cryptocurrencies before the announcements were made public.

Now. This cam ran for almost a year from june. 21 and actually they did this 14 times and made 15. Million dollars.

Now the reason i'm laughing is because i mean come on ishaan. What were you thinking getting charged with insider trading that's a rookie mistake man i mean anybody on wall street. Can tell you you never trade on inside information. You just stole the stripper and she buys.

It and you know you get a. Freebie i'm just. Kidding i'm just kidding for 15. Million.

That's small thinking bro. I mean let's do billions and of course. I'm just kidding. That's a boneheaded move and completely illegal so you know screw him.

But let's go back to the serious mode in a separate complaint. The sec actually jumped on the bandwagon as this guy was getting charged and basically went and coined base. Saying hey nine out of those 25 tokens these guys traded on are actually not commodities they're securities and if it's a security. It had to go through a public offering an ipo or ico whatever the you want to call it doesn't really matter but basically the ssc is saying hey these are regulated securities and you just listed them on you know your exchange illegally and obviously that's a huge deal and of course coinbase threw a hissy fit about this right away.

Their chief legal officer. Paul grebel actually denied the claims on a blog post a blog post by guy. What what is this a blog post. She tried to kill them with a blog post and the blog post was titled coinbase is not the securities.

And the story. Now. I actually read the blog post and it was really poorly written his main arguments basically don't make no sense. The one argument was well we have a review process.

That's good you shouldn't be the one deciding. If it's a security or not i mean that's why we have regulators my guy. He's like you want to be the defendant and the judge. It's not going to work like that the second is like we cooperated with the sec well that's great my guy.

But it has nothing to do with the definition of the security and number three is it's gonna hurt the crypto market. Number one uh. I'm not sure who knows probably or maybe or not we don't know this sometime. Regulation actually helps but even if so i mean um.

It should be in consideration actually deciding if it's a security or not i mean besides the point. If you actually look at the scc letter. They actually took a look at the law and gave us a legal analysis. Instead of this that came out of coinbase and basically.

They said hey listen admits the definition of the security. You know go look at the securities act. And it basically defines what an investment contract is if it constitutes an investment of money in a common enterprise. With the reasonable expectation of profit derived from the efforts of others.

This is literally what these projects are and of course. We already know gary gaster. Said that bitcoin is not a security because it's completely decentralized. But all these small projects hey.

I'm with the sec here. I'd love for them to regulate this and i'm sorry coinbase. But sorry no sorry you guys have done and fricked up and if you actually have an interest in coinbase you can actually head on over to tiprankscom. And you can see how the quarter went before the numbers come out click on website traffic right here and then you see what's going on with the company as far as unreported.

Periods you can see this is the website traffic for coinbasecom. And we're basically set on unique visitors and let's do quarterly. So as you can see right here the quarters for coinbase right here can be shown each of these dots is a single quarter. So q121 q21 and so forth and so forth so the less numbers.

We had were q122 and at this point. You can see the decline already beginning right so from q421 to q122 the decline is quite significant. But for what i'm seeing here it's getting worse. I mean the line is getting steeper.

They went from growing by 80 percent their total users to losing 10 of the total users in q1 and this quarter. They lost 25 of the total users. And if you actually want to do some more research and look at the fundamentals of coinbase. I use seeking alpha to get started.

And i think they're phenomenal you have the articles below the latest news and right here. You can actually take a look at the profitability for example instead of digging through the financials you get it right here in immediate fashion. Very easy to use very easy to see look the numbers are impressive i'm not gonna lie profitability is just incredibly impressive but here's the problem this is not exactly a classic structure of portability basically these numbers these percentage points are based on the price of cryptocurrencies in bitcoin. Because coinbase is essentially a toll booth.

So whatever you're seeing here in the screen is dependent on the price of bitcoin. These are numbers that talk about the previous quarter. We know that bitcoin dipped to twenty thousand dollars. So i'm assuming there's gonna be a big hit in these numbers so trading in coinbase or investing in coinbase is pretty much like looking at a commodity right because the price is going to be very very swingy very very unstable it's just their business model is based around the price of bitcoin now you can see impressive growth right here 149 percent.

But there's absolutely no way to know what's the forward revenue growth going to look like because the price of bitcoin is so volatile this number is complete mystery. So it's very hard to evaluate companies like this yeah. Things are not looking good for them. But you know sometimes that's an opportunity sometimes it's a sign of you know more pain to come.

I honestly don't know you have to research for yourself. What i will show you. Here which is one of my favorite features seeking alpha is this. 2257 short.

Interest there's a lot of short activity around this. Company. 225. Short interest is very very very high one of the most shorted companies right now that i can think of 225.

Is very high so there's a lot of shorting going on. But also this has to be taken with a grain of salt. This is usually a two week old data. So this is from 14 days ago.

The entire increase in the price of the share happened when bitcoin started to rally. So it actually went up by 24. So i'm assuming a lot of these shorts will cover and actually get out because they will be losing money. So this number might actually come down you see this with the delay of 14 days usually do i understand it so i wouldn't go all in based on just this number as always if you appreciate the video make sure you actually subscribe to the channel and comment below what you think about coinbase if you're bullish if you're bearish.

We'd love to hear opinion see in the next video you.