[HN Gopher] Celsius Execs Cashed Out $40M in Crypto Before Halti...
___________________________________________________________________
Celsius Execs Cashed Out $40M in Crypto Before Halting Withdrawals
for Customers
Author : ekpyrotic
Score : 351 points
Date : 2022-10-06 15:00 UTC (8 hours ago)
(HTM) web link (gizmodo.com)
(TXT) w3m dump (gizmodo.com)
| outside1234 wrote:
| Its almost like we need regulation for it
| aaroninsf wrote:
| That rug really tied the room together, man.
| black_13 wrote:
| arcticbull wrote:
| I suspect "Celsius execs" are about to get a tour of US
| bankruptcy law's clawbacks policy.
|
| Anyone who withdrew money from Celsius in the 90 days leading up
| to the bankruptcy can be ordered by the judge to put it back in,
| and that timeline is extended to 1 year for insiders. [1]
|
| A bunch of the folks who thought they got out of Madoff's fund
| learned that lesson last time.
|
| [1] https://www.lowenstein.com/media/3095/beware-of-
| bankruptcy-c...
| jeffwask wrote:
| Ponzi scheme gonna ponzi
| hahaxdxd123 wrote:
| JaggerFoo wrote:
| Yeah, decentralization is the cornerstone of crypto. The reality
| of it all is that it is not. But don't tell that to the zealots.
|
| I'm pro-crypto, I think the innovation and paradigm are brilliant
| - I am developing a small project in crypto. I don't fool myself
| into believing the hype that exceeds it's capabilities, project
| organization or true architecture at hand.
|
| Cheers
| wnevets wrote:
| People being burned by Crypto has to stop being so funny
| intrasight wrote:
| Why?
| wnevets wrote:
| because of empathy.
| syntaxing wrote:
| Crypto is pretty much speed running our existing financial
| institutions' past history.
| dpkirchner wrote:
| What's the next scam on the list?
| datadata wrote:
| Are you implying that existing financial institutions have put
| this type of scam entirely in the past? Because they certainly
| have not.
| dan_quixote wrote:
| I don't feel like that's implied in the comment at all.
| datadata wrote:
| Doesn't "past history" imply something that is no longer
| happening?
| jqpabc123 wrote:
| What it's doing is giving techno nerds a free crash course in
| government, monetary policy and regulation --- or rather the
| lack thereof.
| kranke155 wrote:
| Pretty much. Every piece of financial regulation is being
| justified by crypto scams in record speed.
| woodruffw wrote:
| Free, for some definitions of free :-)
| umeshunni wrote:
| "techno nerds"
|
| what does this have to do with EDM?
| qzx_pierri wrote:
| I wouldn't lump Techno in with 'EDM'
|
| Techno = A movement that is largely an exercise in pushing
| computers/midi to their limit while creating inventive
| music.
|
| EDM = event driven marketing. pop music with a 4x4 kick
| drum.
|
| ...Yeah I know, semantics.
| 3np wrote:
| Can you point me to any "crypto nerds" affected by this? The
| article is precisely about how the insiders still come out on
| top. It's precisely the blindsided non-nerds that are
| (hopefully) learning now and custodied their funds with
| Celsius.
| anm89 wrote:
| Seriously. The "nerds" aren't the ones dumping their keys
| into other peoples custody to yield farm obvious ponzi
| schemes
| snarf21 wrote:
| At this point, I see crypto as nothing more than digital penny
| stocks. It isn't all scams, just mostly.
| dleslie wrote:
| any% noreg tas
| jkingsman wrote:
| [INFINITE MONEY GLITCH -- WORKING!!!]
| fourstar wrote:
| Celsius is not crypto. It's the equivalent of using a
| centralized service. Luddites gonna luddite.
| hn_throwaway_99 wrote:
| What's hilarious to me is that crypto boosters would often
| cheer about how crypto doesn't "suffer" from the same things as
| our existing financial system (e.g. potential run on the bank
| in a fractional reserve system) - but then they went and built
| up all the same things they originally said crypto was immune
| from, this time with no regulations or legal framework.
| cowtools wrote:
| I use cryptocurrency, however I don't remember ever working
| on, particiapting in, or endorsing Celcius.
|
| Celcius is not decentralized, it is not a community led-
| project, it is not free/open source software.
|
| So who is "they"? It's obvious to me that the type of person
| who endorses something like celcius just sees cryptocurrency
| as a free money machine, and does not actually have real
| princples regarding decentralization and whatnot.
|
| Cryptocurrency can be strong against censorship etc. But it
| is clearly not sufficient in itself for censorship resistance
| etc (e.g. what value is being secured? from who? how?) It is
| analagous to saying that encryption is good for security but
| the presence of encryption is not sufficient for security
| (e.g. what data is being secured? from who? how?).
|
| The fact that celcius can steal your deposit despite the fact
| that cryptocurrency is involved is analagous to the fact that
| GMail can read your emails despite the fact that HTTPS is
| involved.
| MichaelCollins wrote:
| People surprised by this might be the sort of people who try to
| cuddle a porcupine and are surprised when they get stabbed. That
| said, we have laws designed to protect stupid people from those
| who prey on the stupid, so I hope these execs get the book thrown
| at them.
| [deleted]
| daniel-cussen wrote:
| omgomgomgomg wrote:
| This was an incredibly bold operation from the begining. They
| planned to exit one way or another, using the incorporated in the
| US to gain trust and the plan was not to just disappear, but file
| for bankruptcy as in "it happens".
|
| It is remarkable how they used the depositors or investors money
| to pay for their lawyers and yet the government considers this a
| chapter 11 instead of 7, as if there is any way to conduct
| business going forward. Reputation gone, money gone, the owners
| gone.
|
| Every time something like this happens, on such a scale, makes
| you wonder, how can so many people fall for this?
|
| I am not sure greed is the only factor, there must be more behind
| it, some shrinks will have a field day.
|
| And all the victims are now asking for a government intervention.
|
| There is no free lunch, even mashinkis money will come at a large
| cost. From what I read, many lost over 100k and some lost 7
| digits, certainly some shady people amongst these.
|
| In conclusion, this was planned from the very beginning. If they
| could run this profitable, fine, if not, they hiding money
| followed by chapter 11 was the backup plan.
| onlyrealcuzzo wrote:
| > Every time something like this happens, on such a scale,
| makes you wonder, how can so many people fall for this?
|
| Does it?
|
| If you're going to work every day to make a dollar, and your
| friend just sits on his ass and plays video games and makes a
| dollar every day off his CryptoKitty investments - and you can
| see the actual money in your friend's account - after a certain
| period of time, it's hard for anyone to resist, no matter how
| dumb it sounds.
|
| Even Newton lost all his money in the South Sea Bubble...
| Twice!
| potamic wrote:
| It's one thing to pull some elaborate and complex fraud, but
| you'd have to be really stupid to do such blatant insider trading
| in broad daylight. Are they taking calculated risks in doing this
| because surely they're getting prosecuted and having all their
| money taken away as well?
| jqpabc123 wrote:
| _but you 'd have to be really stupid to do such blatant insider
| trading in broad daylight._
|
| LOL!
|
| Either really stupid --- or really smart.
|
| He did nothing that was technically illegal --- because it was
| only play money --- i.e. not _legal tender_.
|
| The really stupid people are those surrendering _legal tender_
| in order to play a game with "Monopoly Money".
| fourseventy wrote:
| Web3 is fine
| cowtools wrote:
| Web3 is basicially about federated social networks. Maybe
| cryptocurrency plays a role, but the idea that it takes center-
| stage is one peddled by people who clearly have money to make.
| redox99 wrote:
| Celsius has nothing to do with Web3
| geophile wrote:
| I don't follow crypto, so these are actual questions, not
| trolling:
|
| - If Celsius is a trading platform, how can Celsius itself owe
| anybody anything?
|
| - My naive understanding is that cryptocurrency, being based on
| blockchain, is a log of universally agreed upon, legitimate
| transactions. So how can there be a liquidity crisis at all, let
| alone one in the billions? How is the platform allowing
| transactions not backed by actual funds?
| cowtools wrote:
| custodially held cryptocurrency is not on the ledger. When you
| own cryptocurrency custodially with someone, what that usually
| means that they hold all the cryptocurrency and they have their
| own database of IOUs.
|
| This is why it is unsafe to keep too many funds custodially
| with untrustworthy parties and why it is a good idea to
| minimize the amount you have custudially (e.g. on exchanges see
| mt gox fiasco)
| UncleMeat wrote:
| You lend Celsius some coins. In return they promise to pay you
| some % of interest. Celsius takes those coins and sticks them
| in another lending system that pays them a higher % of
| interest. The other lending system collapses and cannot return
| the coins because of an exploit. Celsius customers demand their
| coins back and Celsius cannot return them.
| TomGullen wrote:
| > The other lending system collapses and cannot return the
| coins because of an exploit
|
| And also because the entire business model is completely
| unsustainable, preying on peoples greed.
| Nursie wrote:
| Others have answered about how Celsius got into trouble, as it
| was not a trading platform, but I'll answer the implied
| question - if it's all on a blockchain, how can a trading
| platform have a liquidity crisis?
|
| The answer is - it's not all on the blockchain. The vast
| majority of transactions involving bitcoin are nowhere near a
| blockchain, they're all on a database (or similar tech) that
| the exchange runs. Blockchain transactions only occur on
| deposit or withdrawl of funds into or out of the exchange. If
| (as in the case of an entity like Quadriga CX) somebody
| 'accidentally' removes and loses most of the cryptocurrency,
| the exchange can continue to operate for quite some time, so
| long as everyone doesn't try to withdraw at once.
| rodiger wrote:
| 1. Celsius was a _lending_ platform which allowed customers to
| earn yield on deposited crypto. It also had exchange features,
| but the blow-up is primarily due to the lending aspect.
|
| 2. The liquidity crisis happened because of off-chain financing
| which models current lender/borrower agreements.
| zapdrive wrote:
| It wasn't a trading platform, and certainly wasn't doing the
| transactions on a blockchain. It was "lending" platform, where
| you deposited your crypto and earned interst. Apparently they
| loaned out your crypto to low risk individuals/companies etc.
| But turns out it was an outright scam.
|
| By the way, there are legit decentralised blockchain based
| lending platforms like Aave.
| tedivm wrote:
| Most brokers- such as coinbase- perform their transactions
| using off chain methods. All the bitcoin in coinbase is held
| and owned directly by coinbase, and what users of coinbase
| actually have is a database table somewhere saying how much of
| coinbase's coins are marked as being owned by the user.
|
| Celsius is similar, but they also offer a loan system on top of
| it. So the coins you give to celsius are not only no longer
| owned by you, but they're also not even present in a Celsuis
| wallet.
| cube00 wrote:
| At least Coinbase has a database table, Celsius had a
| spreadsheet. [1]
|
| [1] https://www.cnbc.com/2022/09/23/celsius-has-a-hail-mary-
| bank...
| jedberg wrote:
| Oh hey look the consequences of a monetary system that isn't
| backed by a legal system (that is backed up by people with guns).
|
| The reason fiat money works is because at the end of the day if
| you run into trouble you have the legal system to make things
| right. And if the perpetrator of the crime doesn't listen to the
| legal system, there are people with guns/violence to back that
| up. That's why the whole system works -- because of the threat of
| violence.
|
| Crypto doesn't have that. It has a lot of advantages (I use
| crypto myself) but it also has a big disadvantage, for now.
|
| When the USA starts issuing it's own crypto they might solve this
| problem by requiring KYC to get the coins, but then of course you
| loose the anonymity aspect.
| Yhippa wrote:
| > When the USA starts issuing it's own crypto they might solve
| this problem by requiring KYC to get the coins, but then of
| course you loose the anonymity aspect.
|
| In my mind the advantage for a US Government-backed crypto is
| the violence you mentioned above and convenience/traceability.
| The loss of anonymity I'm sure is a feature to them, not a bug.
| noasaservice wrote:
| > That's why the whole system works -- because of the threat of
| violence.
|
| And that's what bothers me with the fetishization of "violence
| is not the answer".
|
| Violence is DEFINITELY an answer. It's what state entities do
| on a regular basis. Now, it's not wise to rely on violence
| regularly, when more peaceful methods exist and are more
| effective.
| tossl568 wrote:
| You can't steal my Bitcoin if I don't deposit them with a
| custodian. This is like blaming gold itself if the owners of a
| gold bank run off with the gold.
| strangattractor wrote:
| Sure people can. They simply have to encrypt and hold your
| data for ransom or any of the many other schemes to blackmail
| you. The crypto enables the perp to get that ransom across
| the border and evade punishment. If it wasn't for crypto such
| schemes are much harder to pull off.
| ramesh31 wrote:
| Relevant XKCD: https://xkcd.com/538/
|
| At the end of the day, any power you think you may have is an
| illusion. It all comes down to who has the monopoly on
| violence.
| smachiz wrote:
| Except that we have regulations for banks and brokerages for
| how they must operate, what sort of cash reserves they have,
| and how they must conduct audits. And they pay into an
| insurance program (FDIC/SIPC) to return money to depositors
| if they collapse.
| karamanolev wrote:
| > You can't steal my Bitcoin if I don't deposit them with a
| custodian.
|
| Many people have lost their BTC and other coins to hacks,
| phishes, hardware failures, software failures and so on. So
| in the sense of the people from the general public, yes, I
| can steal your Bitcoin.
|
| > This is like blaming gold itself if the owners of a gold
| bank run off with the gold.
|
| You can keep it under the mattress and expose yourself to one
| kind of failure mode. You can also keep it with the bank with
| the clear expectation that the owners will _not_ run off with
| the gold and also expect the state to go after the owners if
| they do. Which is not happening here.
| tcgv wrote:
| > yes, I can steal your Bitcoin
|
| Let's fix that phrase:
|
| - yes, I can steal your Bitcoin keys
|
| And then go further and transfer the bitcoins
|
| Other than that, no, you CANNOT steal "my" bitcoins
| karamanolev wrote:
| Um, no, I don't think language works like that. Let's try
| to rephrase that with gold: "You CANNOT steal the gold
| under my mattress. You can steal my keys or break my
| door, walk in and then move the gold from my house to
| your car and drive off.". Don't you agree the above is
| equivalent to me stealing your gold?
| sgammon wrote:
| But you _can_ blame gold itself for that. Gold is
| inherently valuable; and one flaw of inherent physical
| value is that it can physically change hands forcibly and,
| well, the bearer of that value now controls it in complete
| and total form.
|
| Cryptographically verified exchange is a different kind of
| exchange, and it has its own benefits and drawbacks. one of
| the benefits of this kind of exchange is that mere custody
| of the currency in question does not relate to ownership.
|
| Does that make gold worse or better than bitcoin? No, it
| just makes them different.
| [deleted]
| baxtr wrote:
| But wait! I thought decentralised is sooo much better??
| aliqot wrote:
| Celsius is centralized. Was this comment sincere?
| quest88 wrote:
| It's centralized. Turns out people like centralized things
| because it's easier!
| pazimzadeh wrote:
| Huh? If that was true then it would be services like AAVE or
| Uniswap which would be bankrupt, not the centralized finance
| Celsius.
|
| The idea that the traditional legal system prevents funny
| business with money is naive.
|
| 9/10/2001: Rumsfeld says $2.3 TRILLION Missing from Pentagon
| https://www.youtube.com/watch?v=xU4GdHLUHwU
|
| The Pentagon's $35 Trillion Accounting Black Hole
| https://www.yahoo.com/video/pentagon-35-trillion-accounting-...
| https://www.bloomberg.com/news/articles/2020-01-22/pentagon-...
|
| Pentagon's Defense Logistics Agency loses track of $800m
| https://www.bbc.com/news/world-us-canada-42954050
| xani_ wrote:
| Legal system isn't preventing all of the the problems
|
| Lack of legal system is allowing for all of the problems
| Retric wrote:
| Political theater, the money isn't missing.
|
| In order to prevent fraud and obscure details from spies, the
| pentagon is setup to hand out money via multiple archaic
| systems rather than a single computer system. This limits the
| possible damages, but means audits are really slow and will
| report massive discrepancies before their complete.
| dangerlibrary wrote:
| I am not aware of a successful GAO audit of the defense
| budget in the US. Do you know of one?
|
| https://en.wikipedia.org/wiki/Military_budget_of_the_United
| _...
| Retric wrote:
| That's really outdated, referring to things in 2018 as
| occurring in the future.
|
| https://www.defense.gov/News/News-
| Stories/Article/Article/20...
| jedberg wrote:
| It doesn't prevent it, but it gives you recourse to make
| yourself whole again, and in a sense prevents a lot of funny
| business because people are afraid of getting caught and
| being put in jail.
| pazimzadeh wrote:
| Crypto is like the invention of ink that cannot be erased.
| How that technology would weaken trust and accountability
| is beyond me. It's literally perfect for finance
| (especially once multi-sig wallets become common). If
| Celsius had been more all-in on crypto tech, they would
| have had FEWER problems.
|
| Also, I don't know any law that exempts crypto companies
| from being taken to court.
| eropple wrote:
| _> How that technology would weaken trust and
| accountability is beyond me. It 's literally perfect for
| finance_
|
| Because modern legal systems and modern economies work on
| the assumption that malfeasance is a reason to un-do what
| crypto systems want to make indelible. This is an
| _obvious and obviously good_ thing to people who are not
| absorbed by this odd groupthink. That impedance mismatch
| is an excellent indicator of why this technology is
| viewed as stuff for cranks and grifters, even were there
| useful applications to be had for the public.
|
| _> Also, I don 't know any law that exempts crypto
| companies from being taken to court._
|
| ...while at the same time the crypto community is wracked
| by disposable entities fleeing into the night, beyond any
| practical legal reach.
|
| On the other hand, if somebody compromises your debit
| card, Bank of America will make you whole while they
| reverse the transactions on the backend.
| ipaddr wrote:
| The legal system can only be used to settle payment
| disputes when parties are known. Buying a tv from the
| back of a van going home to find out it doesn't work will
| leave you with little legal recourse. The legal system
| can only work with entities within it's power. Get ripped
| off from a foreign supplier can require a lawsuit if
| available to you in an unfriendly legal system. Cryto can
| solve these trustless entities problems.
|
| Bank of America can do very little for your Russian
| payment disputes.
| danans wrote:
| > Cryto can solve these trustless entities problems. >
| Bank of America can do very little for your Russian
| payment disputes.
|
| Didn't know crypto had a contract enforcement apparatus
| in Russia. How does that work?
| heylook wrote:
| > Get ripped off from a foreign supplier can require a
| lawsuit if available to you in an unfriendly legal
| system. Cryto can solve these trustless entities
| problems.
|
| Pardon the ignorance, but, how, exactly?
| scarmig wrote:
| AFAICT crypto's solution to getting screwed by a
| trustless entity is "screw you, you deserved it for not
| doing due diligence."
| seaourfreed wrote:
| DoJ shifts 150 prosectors to crypto cases. A bet at least
| one will be looking into this.
|
| https://news.bitcoin.com/doj-launches-network-of-
| over-150-fe...
| JumpCrisscross wrote:
| > _literally perfect for finance_
|
| It's useful for a cartoon version of finance. It's
| "perfect for finance" in that crypto users are willing to
| tolerate high fee burdens, which makes them profitable.
| TomSwirly wrote:
| > Crypto is like the invention of ink that cannot be
| erased.
|
| No, that was invented in the late 70s, with the Merkle
| tree.
|
| The whole wildly expensive consensus phase in
| cryptocurrencies is absolutely _not_ needed for immutable
| ledgers.
|
| > It's literally perfect for finance
|
| People have been using digital certificates in finance
| since the 80s. When there is a single source of truth,
| which is the case for almost all finance except
| cryptocurrencies, there is no need for the horrific
| expense of the blockchain.
|
| > Also, I don't know any law that exempts crypto
| companies from being taken to court.
|
| Who said that? No one. No one at all.
| pazimzadeh wrote:
| >> Also, I don't know any law that exempts crypto
| companies from being taken to court
|
| > Who said that? No one. No one at all.
|
| jedberg: "[crypto] ... prevents a lot of funny business
| because people are afraid of getting caught and being put
| in jail" https://news.ycombinator.com/item?id=33110400
| pazimzadeh wrote:
| >> Crypto is like the invention of ink that cannot be
| erased.
|
| > No, that was invented in the late 70s, with the Merkle
| tree.
|
| Ok then, crypto is like ink that cannot be erased, with
| distributed copies throughout the world.
|
| My point is that like ink it's a technology like any
| other, that can be applied to various problems by various
| entities including the government. Crypto is not
| automatically subversive or incompatible with
| law/finance.
| toomuchtodo wrote:
| It is important to understand that crypto is not an
| expression of finance (although financial transactions do
| take place on top of crypto), but an attempt to express
| law outside of the bounds of IRL legal frameworks,
| stating, "code is law", which is of course, not true. The
| legal system always takes precedence when they have a
| monopoly on force (financial and physical), which is why
| crypto is destined to be a niche system so long as it
| does not have mechanisms for the legal system to exert
| its will on it. What is business logic of traditional
| systems if not expressions of business rules operating
| within the constraints of legal frameworks?
|
| It is not about immutability or what level of
| transparency the ledger has, it is about control and who
| can influence both business as usual contract execution
| and exception handling. It is a power struggle. Don't
| miss the forest for the trees.
| pazimzadeh wrote:
| "Code is law" is a property of Ethereum Classic, not all
| cryptocurrency. I don't really see many crypto people
| arguing that code should supersede law.
|
| I'm no expert but I understand that undo-ing transactions
| is pretty trivial if you use multi-sig. The owner and the
| bank (or government) can each have a signature, and a
| chargeback can occur when both signatories agree to
| execute it.
|
| By the way, the law already has ways of punishing
| irreversible actions (i.e. murder, destruction of
| property).
| danans wrote:
| > I don't really see many crypto people arguing that code
| should supersede law.
|
| Evading tax laws or conducting illicit transactions is a
| core appeal of crypto, and obfuscating identifiers in
| crypto to achieve those ends is what crypto tumblers are
| all about.
|
| > I'm no expert but I understand that undo-ing
| transactions is pretty trivial if you use multi-sig.
|
| Per [1] multi-sig only lets you require multiple
| signatures to create a transaction, reducing the chance
| you do something stupid, so sort of like a physical check
| that requires multiple physical signatures. Multi sig
| doesn't let you (or the other signers) reverse the
| transaction once it is complete.
|
| For that, you must contact the recipient and convince
| them to return the crypto, hopefully by asking them
| nicely.
|
| https://www.coindesk.com/tech/2020/11/10/multisignature-
| wall...
| jedberg wrote:
| > Crypto is like the invention of ink that cannot be
| erased. How that technology would weaken trust and
| accountability is beyond me.
|
| The other important aspect of a working financial system
| is the ability for a 3rd party (courts/law enforcement)
| to undo transactions. Crypto makes that impossible
| without the cooperation of the offender.
| EVa5I7bHFq9mnYK wrote:
| Many traditional types of payments, such as wire
| transfers, cash etc. are also non-undoable. Incarceration
| and a variety of other tools at law enforcement's
| disposal are used to recover funds.
| jedberg wrote:
| Those transactions are still undoable by a third party.
| Using the legal system you can file lawsuits and the
| perpetrator can have the cash or electronic debits
| removed without their participation.
|
| With crypto, you _must_ have the help of the criminal,
| because only they can unlock the wallet.
| giaour wrote:
| Those payment instruments are generally subject to fairly
| low transaction limits due to the potential for abuse.
| Cash is the exception there, but it's extremely
| inconvenient to move or store large sums of cash and
| nearly impossible to do so anonymously.
|
| Crypto is unique in that transactions are immutable and
| do not scale in difficulty with the amount being
| transferred. Ransomware gangs do not choose to accept
| cryptocurrency payments because it aligns with their
| politics; they do so because it is the only way to move
| millions of dollars across international borders in an
| undoable fashion.
| pazimzadeh wrote:
| There are many ways to implement undo-ing transactions on
| the blockchain. One is with multi-sig wallets.
|
| There are also others:
| https://www.coindesk.com/tech/2022/09/28/stanford-
| proposal-f...
| eropple wrote:
| You keep talking about "multi-sig wallets" in multiple
| posts. Are you going to have courts in every relevant
| jurisdiction have a handle on that wallet? That seems
| _unlikely to go over well_ with the sorts of people who
| take these seriously.
| pazimzadeh wrote:
| I don't know, that's a good question. That's the
| discussion we should be having, instead of flat out
| stating that it's impossible.
|
| The "sorts of people who take these seriously" will never
| be happy, so that's fine.
| lottin wrote:
| Financing requires seizable assets, which means it's
| unimplementable using blackchain-based digital assets and
| smart contracts.
| dlubarov wrote:
| There are plenty of DeFi systems where (crypto)assets are
| used as collateral - see MakerDAO, Compound, Aave, etc.
|
| (Granted, you can't deposit a house or car as collateral,
| if that's what you're getting at?)
| belltaco wrote:
| Not true.
|
| https://leadstories.com/hoax-alert/2022/09/fact-check-
| donald...
| pazimzadeh wrote:
| "according to estimates we cannot track 2.3 trillion
| dollars"
| ajross wrote:
| The quote was "According to SOME estimates ...", FWIW.
| But even your phrasing is a far cry from the attempt to
| infer that it was "stolen", which is the clear
| implication of the hyberbole above.
|
| And in fact that was spun too, because (as you read
| farther down the linked debunking) the original quote was
| "$2.3 trillion were unsupported by reliable explanatory
| information and audit trails or were made to invalid
| general ledger accounts", which doesn't even support
| "cannot track". In fact, per that statement, we can track
| it, we know where it went, we just don't know why or in
| some cases to precise recipients.
|
| Those are accounting failings. They're bad. A system with
| failings like that is certainly going to be subject to
| exploitation and fraud. For sure they should fix it (and
| to some extend did). But to claim that _all_ of that
| $2.3T was fraudulent is just a plain lie.
| pazimzadeh wrote:
| The video talks about "tracking" funds, there is no
| mention of theft or fraud.
|
| > But to claim that all of that $2.3T was fraudulent is
| just a plain lie.
|
| I didn't. But I am replying to people who may think that
| all of crypto is fraud.
| beders wrote:
| How much money have you lost from your private bank
| account...?
| papreclip wrote:
| Does loss of value via quantitative easing count?
| jamespo wrote:
| good job the value of crypto is so stable then
| pazimzadeh wrote:
| That's besides the point. I have not lost money from my
| private account or from my crypto wallets.
|
| I lost money on companies which marketed themselves as
| using crypto, but were in fact not.
| ajross wrote:
| Oh, come on. Have you never lost a check? Never seen a
| credit card bill you can't explain? Never had an argument
| with your spouse over what the $2k at Costco was for? Never
| gotten a bill and had trouble figuring out if you've paid
| it or not?
|
| Accounting failings happen to all of us. The only people
| with perfect bank accounts are either (1) accountants
| themselves or (2) never really bothered to look.
| gilrain wrote:
| No to all of that, never. I lost my debit card once along
| with, stupidly, my PIN (both were in my wallet, which was
| left somewhere). The maximum daily withdrawal was taken
| from ATMs that night. The next day, my bank made me
| whole. If that had been a crypto wallet, I'd have been
| out $1000 I couldn't afford to lose.
|
| Man, was I grateful for the human considerations built
| into traditional banking!
| notch656a wrote:
| That's nice anecdote. When a thief intercepted my credit
| card information, my bank accused me of lying and made
| sure the thief could keep all the money, including going
| through the full appeals process for fraud reporting
| where my claim was denied at every step. Then the bank
| kept insinuating that my family members must have stolen
| the money, and called into question my credibility in a
| condescending tone. Honestly I've found fraud protection
| at the bank to suck horribly.
|
| With my crypto transactions I never send the private key
| with it, unlike with credit card payments where I
| transmit the private information (CC numbers). Going off
| anecdotes, I've found crypto to be vastly safer for my
| transactions than the banking system.
| matheusmoreira wrote:
| Citizens in my country lost it all in the 90s. Inflation
| was out of control, politicians were desperate and at some
| point somebody decided to simply freeze everybody's assets.
| strangattractor wrote:
| Laws never prevent crime they(no gender they) only provide a
| mechanism to punish people who violate them. Given that there
| isn't a lot of existing legal framework around crypto or
| crypto trading it may be difficult to punish Celsius Execs.
| I'm no lawyer I just play one on board games. In truth the
| list unscrupulous crypto firms seems to grow daily. By the
| time crypto becomes safe and energy efficient it will be just
| as cumbersome as real money.
| fullsend wrote:
| The libertarian leaning, free market lovers on HN won't
| entertain your slander. The book Debt really opened my eyes to
| a flow of logic demonstrating that in fact markets cannot exist
| without states (laws) and vice versa. That this idea of pure
| markets corrupted by governments is a complete fantasy invented
| whole cloth and worshipped by sycophants for centuries. Markets
| require contracts, which require laws and enforcement. That's
| it.
| ramesh31 wrote:
| Hobbes layed this all out 300 years ago. But apparently "this
| time it's different".
| qudat wrote:
| You aren't actually arguing again the core argument:
| contracts, laws, and enforcement don't require governments.
| Just because this is the dominant system today doesn't
| necessarily mean it's the only way.
| jankyxenon wrote:
| Aren't Bitcoin and Ethereum both pseudonymous? Once you know
| one of someone's transactions, don't you know them all?
| jedberg wrote:
| Yes, and often you can trace that back to a single person,
| but not always.
| ericd wrote:
| With BTC transactions via lightning, at least, there's simply
| a periodic net settlement.
| [deleted]
| scifibestfi wrote:
| Fiat works until it doesn't. Whether that's inflation, corrupt
| government, or the long term debt cycle which we nearing the
| end of.
|
| Ray Dalio has a good video about what that means and how this
| has played out every time over the past 500 years:
|
| https://www.youtube.com/watch?v=xguam0TKMw8
| arcticbull wrote:
| This is the same thing that William DeVane has been saying
| shilling gold for Rosland Capital at 2am to Fox viewers for
| the last decade. I'm not worried. [1]
|
| Dalio is talking his book.
|
| [1] https://www.youtube.com/watch?v=VVcdvT09qr4
| ericd wrote:
| It's his book because he believes it's true, not because
| he's trying to influence things. I'd highly recommend
| reading Big Debt Crises.
| arcticbull wrote:
| Sorry, when I said "talking his book" that's like a
| finance term for advocating for things that would benefit
| the positions you hold.
|
| > Talking your book is a phrase used to describe what
| portfolio managers are doing when they discuss their
| portfolio holdings. It is generally assumed that this
| discussion is to create interest (and buyers) of these
| securities. This will ultimately benefit the price of the
| security and the manager's portfolio.
|
| [1] https://abnormalreturns.com/2010/02/18/everybody-
| talks-their...
| matheusmoreira wrote:
| It's not a monetary system problem, it's a banking problem. The
| cryptocurrencies themselves are fine. The problem is people
| keep reinventing traditional banking on top of them. Everything
| started to go wrong as soon as exchanges showed up. All of the
| drawbacks of centralized banking with none of the regulatory
| benefits.
|
| This isn't decentralized cryptocurrency, this is sending coins
| to some centralized corporation and expecting that everything
| will be fine.
| conanbatt wrote:
| It's the exact opposite - this was done in the legal system,
| not in the defi one.
| notch656a wrote:
| The problem is the people in the government with guns tend to
| work against the people (or at least certain people, last time
| I interacted with one of them they were serving me an absurd
| perjurious warrant). I trust the crypto-anarchists with guns
| far more than the fiat-authoritarians with guns.
| moralestapia wrote:
| Why can't both exist though?
|
| Each with their own advantage/disadvantages, and you get to
| choose which one to use after considering the tradeoffs.
|
| Things I would use crypto for:
|
| * Money transfers, particularly cross border payments. Low
| fees, quick confirmation from all parties.
|
| * Any transaction that I would like to keep my privacy on (and
| this does not mean illegal things, btw).
|
| Things I would never use crypto for:
|
| * Storing wealth. For me personally it's too much of a bet,
| we're always one right (or wrong) math proof away from all of
| this becoming dust.
|
| * Smart contracts. Anything that requires a contract between me
| and someone else, I'll keep using the tried and tested way of
| common law. I'd rather have my business backed by the Delaware
| Chancery Court (which has proven to be quite effective these
| past weeks) than by the code wrote by some random upwork
| contractor.
| dale_glass wrote:
| Crypto is bad at money transfers. It's low capacity. That's
| why nobody is using BTC to pay for pizza anymore. It's also
| bad at privacy, since the architecture for most crypto
| systems relies on storing a permanent, non-modifiable public
| ledger.
|
| Your usage case doesn't really work because almost nobody
| cares about that. You'll find a few idealists interested in
| that, and a very few people that need to transact with some
| random person in Bangladesh. Pretty much everyone will just
| do a regular bank transfer or use Paypal.
|
| What got crypto to become popular is the "get rich quick"
| schemes, which not only don't require stability, but rely on
| instability and people attracted to the idea of exploiting it
| for profit.
| mountainofdeath wrote:
| This already exists though and is a technical solution to an
| economic problem. The reason the money transfer fees exist,
| slow confirmation, etc is there is no incentive to do so
| otherwise.
|
| Crypto transfers for say USD->EUR via USD->BTC->EUR are just
| adding extra foreign exchange legs in the hope that the BTC
| holders on either end will give you a better deal.
| moralestapia wrote:
| >This already exists though and is a technical solution to
| an economic problem.
|
| Immediately followed by:
|
| >The reason the money transfer fees exist, slow
| confirmation, etc is there is no incentive to do so
| otherwise.
|
| Huh? Is it solved or not? It's unclear to me where do you
| stand.
|
| _de facto_ , moving ETH->ETH is faster and cheaper than
| using the standard forex infrastructure.
| TigeriusKirk wrote:
| This story is about a filing in the United States legal system,
| under which this entity works.
| EVa5I7bHFq9mnYK wrote:
| The two are not mutually exclusive. Gold, for example, is not
| backed by people with guns. However a financial and legal
| system can be built on top of it, in fact it was build on top
| of it until 50 years ago.
| [deleted]
| tlb wrote:
| Sure it is. If someone steals your gold, you can call the
| people with guns to arrest them and get it back to you
| (often). It doesn't have to work 100% of the time to be an
| effective deterrent.
| EVa5I7bHFq9mnYK wrote:
| It's the same with coins.
|
| However fiat money must be protected by people with guns
| against forgery. With one exception: people in power are
| allowed to counterfeit it, thus robbing the common people,
| under protection of people with guns.
|
| Gold and Bitcoin are immune to both types of forgery.
| bigbillheck wrote:
| Counterfeit gold is a long-standing art, even to the
| present day
| https://www.thermofisher.com/blog/metals/buyer-and-
| seller-be...
| smachiz wrote:
| Gold is not, and has never been, immune to forgery.
| Science has made it harder, but still happens all the
| time. See: gold plating, gold alloys, etc.
| notch656a wrote:
| I'm not aware of any way to actually increase the total
| amount of real gold in/on the earth in any meaningful way
| in an ECONOMICAL matter (i.e. you have a net positive
| income from producing it). The government can make more
| REAL MONEY for far less than the value of the money.
| redox99 wrote:
| This isn't crypto. You didn't own any crypto. Some company
| owned your crypto. The whole point of crypto is that you can
| own it (ie you and only you have your keys).
|
| We hear stories here every now and then about how their
| bank/paypal/etc froze their money and they are fucked. Crypto
| allows you to actually own your stuff. With fiat unless you
| hold cash, you can't do that. Crypto is about being trustless.
|
| If you give away your crypto to some centralized entity and
| "trust them" that they'll keep your stuff and not steal it,
| then you don't get the point of crypto and you're using it
| wrong.
|
| Yes, I know holding your own keys is hard. There are a lot of
| things that can be done to improve the UX. And even then, I
| don't think crypto _needs_ to be easy enough for your grandma
| to use it, because I don 't think crypto _needs_ to replace
| TradFi for every transaction.
| itake wrote:
| > The whole point of crypto is that you can own it (ie you
| and only you have your keys).
|
| I've also heard stories where people were locked out of
| exchanges during crashes, preventing liquidation, because
| exchanges stopped or delayed deposits during high volume
| trading.
|
| Its super cool that you can keep your own crypto, but if you
| can't trade that crypto, whats the point?
| Jommi wrote:
| you can trade crypto you own, all the while keeping
| ownership of that crypto
|
| look into decentralized finance and you will be amazed
| __s wrote:
| You can trade crypto in person without an exchange
| strangattractor wrote:
| We have a solution for that - it is called money and it
| is anonymous. I can also use it to buy things like
| Halloween candy at the store even when the power is out.
| Truly amazing invention.
| rodgerd wrote:
| Yep. Then you can enjoy all the risks of cash, with the
| additional benefits that you have to manage digital
| security as well.
|
| Nothing like losing all your money because you can't
| unlock your wallet any more. Or sent it to the tip.
| quickthrowman wrote:
| Finding liquidity might be a problem though. At least, I
| don't have any local market makers quoting a bid/ask for
| BTC or ETH.
| vorpalhex wrote:
| Can you, with no services at all? You can share your
| keys... but you can still double spend, etc.
| tazard wrote:
| I think you missed the whole point. Celsius, centralized
| exchanges, etc, you don't actually own the crypto. You have
| an account on a site. If you want to own your crypto and
| also trade between currencies, your better off using
| something like Uniswap
| smoldesu wrote:
| I think _you 've_ missed the point as well. Nobody owns
| anything with crypto. When you give your crypto to
| Coinbase, there is no $250,000 FDIC insurance that comes
| along with it. You don't even get to know what wallet
| it's in, and if Coinbase decides to go sideways, they can
| snatch up your money with _no legal consequence_. You 're
| right that part of the problem is the US failing to
| regulate them, but there's nothing to regulate. A public
| ledger does not a currency make.
|
| Your parents will never have a custodial wallet. The fact
| that traditional banking is easier than 'doing crypto
| right' should give you all the adoption metrics you need.
| matheusmoreira wrote:
| > Nobody owns anything with crypto. When you give your
| crypto to Coinbase
|
| Don't do that if you want to actually own your coins.
| StanislavPetrov wrote:
| >I think you've missed the point as well. Nobody owns
| anything with crypto. When you give your crypto to
| Coinbase, there is no $250,000 FDIC insurance that comes
| along with it.
|
| No, it is you who missed the point yet again. If you give
| your crypto to Coinbase it isn't your crypto anymore. You
| are entrusting Coinbase with your crypto. FDIC insurance
| may be helpful if your bank has financial difficulties,
| but any money you entrust to the bank can be seized just
| as easily as Coinbase can seize your money. Ask a truck
| driver who participated in the lockdown protests in
| Ottowa how secure their fiat money was in the bank after
| it was unilaterally seized by the government.
|
| > The fact that traditional banking is easier than 'doing
| crypto right' should give you all the adoption metrics
| you need.
|
| Does anyone go into crypto because it is "easier" than
| traditional banking?
| redox99 wrote:
| That's why I think Bitcoin is outdated (yes, get your
| pitchforks), and you really need something that can do
| smart contracts.
|
| Bitcoin you can hold it, transfer it, and not much more.
| Having smart contracts (like Ethereum) allows you to have
| something like Uniswap, which is decentralized and allows
| you to trade your coins.
|
| Yes, it's not a fiat on/offramp, but if stablecoins are
| actually good and backed, in the scenarios you describe you
| would just buy/sell stablecoins and at a later point
| exchange those stables for cash.
| gobip wrote:
| Layer two on Bitcoin. Lightning network. Stablecoins
| coming soon.
| optimalsolver wrote:
| No True ScotsCoin.
| [deleted]
| cwkoss wrote:
| This is a no true scotsman fallacy. It is crypto. It is the
| shallow, lazy, dangerous way of using it it, but it is still
| cryptocurrency.
| redox99 wrote:
| People have been saying "not your keys, not your coins" for
| over a decade. This isn't anything new.
| andrewprock wrote:
| And this aphorism conflates ownership with possession.
| Crypto is a bad actors fantasy turned reality.
| Bloedcoin wrote:
| Funny how other crypto bros would say the opposite.
|
| But hey now you got my interest: if it's not for normal
| people for whom is crypto then in your opinion?
| redox99 wrote:
| I'm not sure, it depends on how good the UX and
| trustless/low trust custodial services get[1]. I don't
| think crypto will ever be for "my grandma" for example. But
| I could see it being easy and safe enough for my dad, who
| knows what phishing is, would understand what private keys
| are, etc.
|
| [1] This is too long to explain but basically something
| similar to multisig and time locks to add extra security.
| Nothing like this exists at least easy to use right now.
| browningstreet wrote:
| How do you safely use crypto?
| redox99 wrote:
| With a hardware wallet where you store your seed phrase.
| You would never type this seed anywhere. You would store
| backups of this seed in something like a metal sheet that
| you can buy. You would be extremely careful of the numerous
| phishing attempts that you will encounter. Also with
| malicious smart contracts. And you would have a hot and
| cold wallet, to minimize risk.
| ethanbond wrote:
| It's quite easy: you download this Zero Knowledge
| Confabulator utility from github and load it up into your
| TAILS instance. Make sure you pull all this over Tor and
| use a North Korean VPN and _please for the love of god_
| verify the MD5 hashes. Once you 've done this, you put your
| wallet key into the ConfabUtil which will produce a zk-
| snark. Memorize this because you will next need to go into
| an airgapped, seismically isolated room and write it down
| onto a one time pad. Now you start digging, and once you
| cannot dig any longer you can safely place this one time
| pad into the bottom of the hole, climb back out, and rest
| easy knowing Your Crypto Is Safe.
|
| I sure am glad that I can be my own bank!
| bogomipz wrote:
| >"The reason fiat money works is because at the end of the day
| if you run into trouble you have the legal system to make
| things right. And if the perpetrator of the crime doesn't
| listen to the legal system, there are people with guns/violence
| to back that up. That's why the whole system works -- because
| of the threat of violence."
|
| How many people were prosecuted for the 2008 financial crisis
| though? Neither did the "threat of violence" nor the legal
| system prevent or even deter those perpetrators.
| pazimzadeh wrote:
| Exactly. The people who benefit the most from the current
| system are the already rich, who can afford to the legal fees
| and come up with creative defenses.
|
| Crypto also benefits the rich (like everything), but not as
| disproportionately as the current legal system.
|
| This debate reminds me of the nature vs nurture debate in
| biology. It's a mirage. In reality, it's nature via nurture.
| Similarly, there is no inherent divide between government and
| crypto. One can extend the other.
| CharlesW wrote:
| > _Crypto also benefits the rich (like everything), but not
| as disproportionately as the current legal system._
|
| Are you sure? The WSJ says that 0.01% of all holders
| control 27% of Bitcoin, vs. the top 1% of households who
| control about a third of all U.S. wealth.
|
| https://www.wsj.com/articles/bitcoins-one-percent-
| controls-l...
| pazimzadeh wrote:
| You're missing the point. The point is that the poorest
| Bitcoin wallet is as secure as the richest wallet.
|
| Whereas in legal-land, the more money you have, the
| better your lawyers (and whatnot) you can hire.
| CharlesW wrote:
| > _The point is that the poorest Bitcoin wallet is as
| secure as the richest wallet._
|
| I stand by my point that crypto disproportionately
| benefits the rich far more than fiat.
|
| In my view that extends to wallet management, since the
| rich have security staff dedicated to keeping their
| Bitcoin secure.
| pcthrowaway wrote:
| That article (from the URL) appears to be about Bitcoin,
| not "crypto"
|
| And the distribution of Bitcoin might be skewed because
| one of the largest holders (Satoshi) is possibly dead,
| and many others would be custodial addresses (centralized
| exchange addresses, and large funds like microstrategy).
|
| Furthermore, many of the addresses being considered would
| be inactive addresses by people who have moved on to new
| addresses. In that case, you have many addreses with
| "dust" balances which are not claimed by anyone, perhaps
| as much of 80% of addresses which have ever been used. I
| have gone through at least 6 such addresses myself, and I
| no longer use the Bitcoin network (or have funds on it)
|
| It's a lot different than the dataset used for
| considering wealth distribution among a known population
| number, whose monetary declarations are necessarily
| exposed to a government which can publicize this kind of
| data in a more accurate way.
| xani_ wrote:
| That's trading "some people being protected better" to
| "nobody is protected"
| [deleted]
| s_ting765 wrote:
| Not sure the supporters of the Freedom Convoy over in Canada
| would agree with your strong faith in the _legal safety_ of
| fiat money.
| cronix wrote:
| > The reason fiat money works
|
| It also worked before the US went to a fiat currency in 1971
| when Nixon took us off the gold standard. It also allowed for
| massive deficits because before they couldn't spend what they
| didn't physically have and now they can just print it without
| gold backing it.
| Bloedcoin wrote:
| Which was necessary for the economic revolution.
|
| Balancing the money amount to the workforce.
| dclowd9901 wrote:
| That big disadvantage isn't just "people with guns". It's the
| value of an entire stable society. The reason the USD has
| reigned supreme for so long is because the US has been a
| relatively peaceful and stable country for so long. Their fiat
| value are 1:1.
|
| Crypto, unless it receives the backing of a country (that is,
| the US decides to switch to bitcoin for some reason), will
| _never_ have actual value.
| yieldcrv wrote:
| that copypasta you found has nothing to do with the asset
| involved.....
|
| it is not likely what Celsius did was legal (or consequence
| free via the legal system) , so that has nothing to do with the
| matter that their company held crypto assets
|
| adding clearer fiduciary duties to company's that hold crypto
| assets is entirely possible and so also has nothing to do with
| crypto
| jedberg wrote:
| Not sure why you're calling it copy pasta given that I wrote
| it.
|
| But it does have to do with crypto, because the company
| involved was holding crypto like a bank, but aren't regulated
| like a bank because it was crypto.
| yieldcrv wrote:
| I'm calling it copypasta because your response wasn't
| specifically about Celsius, it was looking for a reason to
| write your pre-existing beliefs about the entire asset
| class in a place where it wasn't relevant. A lot of people
| do this, but one of the bigger problems is that it lets
| poorly run companies get a free pass on bad business
| practices. "Our unscrupulous behavior won't matter because
| people will conflate it with crypto. They won't apply
| scrutiny to us, they'll just try to reduce access"
| cimi_ wrote:
| These are the same people that are selling 'unbankrupt yourself'
| t-shirts after going bankrupt.
|
| See this (entertaining) video :)
| https://www.youtube.com/watch?v=rTwzM0_PjPw
| scifibestfi wrote:
| There's an update at the bottom of the article disputing the
| claim:
|
| "Your report that Mr. Goldstein withdrew millions of dollars in
| advance of the "pause" is flatly mistaken. The reality is that
| Mr. Goldstein did not withdraw even one dollar in the four weeks
| prior to the pause--to the contrary, he deposited over $90,000 in
| CEL tokens in late May, just three weeks before the pause. Most
| of the supposed "withdrawals" from our client's account were, in
| fact, regular-course transfers between his accounts and involved
| corresponding deposits. Indeed, in the year before the pause, Mr.
| Goldstein had net positive deposits into Celsius (including
| interest), not withdrawals. Your account unfortunately distorts
| Mr. Goldstein's position, as he currently has millions locked up
| in Celsius, making him one of the Company's largest unsecured
| creditors. Nuke is proud of his work to create a secure platform
| for Celsius users, and has been working tirelessly day in and day
| out to help restructure the Company to the benefit of all its
| creditors."
| AtlasBarfed wrote:
| "and has been working tirelessly day in and day out"
|
| Sorry, that is garden variety PR verbiage.
|
| "regular-course transfers between his accounts and involved
| corresponding deposits"
|
| So is it accounting, or fraud? Answer: Yes to both.
|
| If that statement had any credibility, there would be
| "independent auditor" and the named auditor in it.
| a2tech wrote:
| _gasp_ I 'm shocked, absolutely SHOCKED, that people involved in
| crypto would be scam artists.
| tossl568 wrote:
| I can't even see you your horse is that high
| dvngnt_ wrote:
| would be or could be?
| MichaelCollins wrote:
| Would be; anybody _could_ be a scam artist.
| jqpabc123 wrote:
| And the most amazing part --- it's not even a scam.
|
| He really didn't cash out anything that was _legal tender_ ---
| what he cashed out was a bunch of play money. Technically, this
| isn 't a crime because it wasn't "real" money.
| toomuchtodo wrote:
| The DOJ is going after folks for front running [edit: better
| wording: insider trading, thx jcpham2 for pointing out my
| lazy language] NFTs on Coinbase. This is not a defense ("not
| real money"). Can't have it both ways, that they're digital
| assets when you want to scam, but it's play money when you
| get caught.
|
| These people will be charged with a crime, and the government
| is going to find something that sticks. Securities fraud,
| wire fraud, whatever fits.
|
| https://www.justice.gov/usao-sdny/pr/three-charged-first-
| eve...
|
| https://www.justice.gov/usao-sdny/press-
| release/file/1521186...
| jcpham2 wrote:
| Imho we should be careful of using this term front running.
| If I buy a thing (simply becqause I can) and then turn
| around and sell it at artificially high limit sell orders,
| does this mean I'm front running or market making?
| Spoofing?
| [deleted]
| jqpabc123 wrote:
| Follow along here --- the people the DOJ are going after
| were selling electrons for cash --- as in _legal tender_.
| This *is* or at least could be classified as a scam.
|
| But as I understand it, Celsius never did this. They never
| accepted any _legal tender_. People put in "funny money"
| and what they got back out was "funny money".
|
| Playing Monopoly with "funny money" isn't illegal.
|
| The title says they cashed out $40M --- but technically
| this isn't really true. All they cashed out was "funny
| money". Maybe they sold their "funny money" to someone for
| real *legal tender* and maybe they didn't --- but this is a
| separate issue; one that cuts to the core of the entire
| crypto marketplace.
| Clent wrote:
| It's as "funny money" as any other security. Just because
| you feel they may be "funnier" doesn't affect the laws
| around selling and trading securities.
| jqpabc123 wrote:
| Your post is based on an assumption --- that crypto is
| legally defined as a "security".
|
| Do you have any reference to support this?
|
| If this is true, then the crypto market is subject to
| existing security laws. And government needs to launch an
| extensive investigation of crypto exchanges who have been
| operating without the required authorization or
| oversight.
|
| As I said, this cuts to the very core of the crypto
| market.
| jakelazaroff wrote:
| What is the point that you're trying to make? People put
| in _real money_ that they won 't get back because they
| believed in Celsius. Execs made _real money_ by cashing
| out before closing the doors. That 's called a scam.
| duped wrote:
| The SEC considers some crypto as commodities and some as
| securities. In either case, it's not "funny money" - it's
| a regulated financial asset.
| jqpabc123 wrote:
| _it 's a regulated financial asset._
|
| If true, this is a cataclysmic moment for the crypto
| market --- the entirety of which has been operating
| illegally.
| toomuchtodo wrote:
| https://www.manatt.com/insights/newsletters/financial-
| servic...
|
| > As noted above, in categorizing the tokens as a
| security, the SEC's complaint makes reference to the
| Howey Test, under which a digital asset, including a
| "crypto asset security" will be deemed a security "if it
| constitutes an investment of money, in a common
| enterprise, with a reasonable expectation of profit
| derived from the efforts of others." The DOJ's complaint
| alleges that "the defendants made illegal trades in at
| least twenty-five different crypto assets and realized
| ill-gotten gains totaling approximately $1.5 million."
| The SEC's complaint claims that at least nine of the 25
| crypto assets were "crypto asset securities," and
| therefore the defendants' insider trading of securities
| fell within the SEC's "broad jurisdiction to regulate the
| securities markets and to bring actions for violations of
| the federal securities laws, including fraud and insider
| trading."
|
| > None of the issuers of the nine "crypto asset
| securities," or Coinbase itself, are named as a defendant
| in Wahi as this is an insider trading case. Issuers and
| exchanges of tokens should take caution, however, as the
| SEC's stance in Wahi reiterates the SEC's a broad view of
| digital assets as securities and its ability to regulate
| them.
|
| As duped mentions, if it's not a security, it's a
| commodity falling under the regulation of the CFTC.
|
| https://www.cftc.gov/digitalassets/index.htm
| [deleted]
| [deleted]
| woodruffw wrote:
| "I convinced them to pay real money for fake money, stole the
| fake money, and exchanged it afterwards for real money" is
| not an argument that is likely to convince the SEC (or a
| jury).
| jqpabc123 wrote:
| _not an argument that is likely to convince the SEC (or a
| jury)._
|
| Mainly because your argument is wrong all the way around.
|
| Celsius never accepted any "real money" from anyone. Any
| "fake money" they allegedly "stole" came from their own
| account, not those of their customers.
| woodruffw wrote:
| That doesn't pass the sniff test: people clearly entered
| the market with actual money (even if they didn't
| _directly_ pay Celsius), and left with none.
|
| You can argue (perhaps correctly) that they shouldn't
| have traded their real money for funny money, but it's
| ultimately no different from any other financial
| instrument.
| rzwitserloot wrote:
| Let's say my company has $400,000 in earnings left over. I
| could pay it to myself but then I have to pay income tax and
| all that jazz.
|
| So, instead I buy something fungible-ish that isn't on
| anybodys immediate radar as a 'security', say, some Black
| Lotus cards from Magic the Gathering, and I then give those
| to myself.
|
| HA! I dodged it all!
|
| .... no. The spirit of the law is that this is a financial
| transaction just the same.
|
| BitCoin and all the other crypto currencies are no different.
| It's all play money.
|
| A story as old as time. For example, in the past (and even
| today), you can buy pricey paintings. Still fraud if you use
| that to dodge taxes. Still fraud if you steal a painting, and
| not because it's a physical object. It's something that is
| considered to have value, based on the notion that it is not
| hard to sell.
| jqpabc123 wrote:
| _Still fraud if you steal a painting_
|
| Celsius didn't _steal_ anything.
| jakelazaroff wrote:
| What do you call it when you abuse your insider role to
| close your own position in your failing investment fund,
| while hanging your customers out to dry?
| vkou wrote:
| > What do you call it when you abuse your insider role to
| close your own position in your failing investment fund,
| while hanging your customers out to dry?
|
| Web3. Ask me a hard one next time.
|
| Less-flippantly: Probably fraud, regardless of how many
| disclaimers your website has in 4pt font.
| fjkdlsjflkds wrote:
| If you think that anything written in 4pt font on a
| website can turn "fraud" into "not fraud", I got some
| sweet bridgecoin I could sell you.
| atty wrote:
| The irony of the CEO's t-shirt in that photo is... staggering.
| TipiKoivisto wrote:
| I was about to write that but let me just copy-paste the first
| comment from the article: "Banks are not your friends. But
| obviously Crypto companies are not your friends either. "
| deltree7 wrote:
| Guns, Gold, Bitcoin or DuckDuckGo, VPNs, there is a planet full
| of gullible idiots whom you can sell anything to by shouting
| Government, Banks, Google, Amazon
| brink wrote:
| It's probably best to assume that most people blatantly lie on
| the regular for the sake of their agenda.
| xrd wrote:
| There is an asterisk at the end of that statement, and then in
| 8pt font it says "And neither am I, dipshit!"
| woah wrote:
| This isn't crypto, it's just a shady investment fund that
| happened to invest in crypto
| woodruffw wrote:
| This is not a useful distinction: most cryptocurrencies and
| "DeFi" startups seem to be propped up by shady, unattested
| corporate entities.
| geraldcombs wrote:
| If you have enough shady people involved in a particular
| activity, then that activity is effectively shady. Similar to
| the fact that if you add enough raw sewage to the water supply,
| you don't have a water supply any more, you just have more
| sewage.
| woah wrote:
| Lots of shady people were involved in web startups in 1999
| (and still are tbh).
| smoldesu wrote:
| And the _only thing_ keeping these creeps in check is our
| legal system. Once you remove that, the bottom falls out on
| quality.
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