[HN Gopher] U.S. moves to seize $460M Robinhood stake linked to ...
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U.S. moves to seize $460M Robinhood stake linked to Sam Bankman-
Fried
Author : jb1991
Score : 212 points
Date : 2023-01-05 16:10 UTC (6 hours ago)
(HTM) web link (www.cnn.com)
(TXT) w3m dump (www.cnn.com)
| peter303 wrote:
| 70% of Madoff victims contributions recovered by 2022. In 14
| rounds.
|
| https://abcnews.go.com/Business/funds-recovered-victims-bern...
|
| They only get contributions back with no earnings.
| miguelazo wrote:
| Boggles the mind that they invested that much in RobinHood at
| all, but especially that late in the game. Maybe part of a
| broader scheme to access their capital as well?
| wmf wrote:
| It has been reported that Alameda made around $5B of VC
| investments. The scale of this thing is huge.
| londons_explore wrote:
| How much of that $5B was actual cash, and how much was
| various loans/swaps/promises/tokens/paper money?
| WJW wrote:
| 5 billion is definitely a large number in absolute terms and
| I would love to be that rich, but if one of the largest
| crypto VCs made ~5b in investments TOTAL then the real
| economy has nothing to worry about. The forex markets did
| over $6 trillion _per day_ in 2022, and that is just the
| currency exchanges. There are single ships in the world that
| cost more than 6 billion.
| dr-detroit wrote:
| [dead]
| SilasX wrote:
| Not really, SBF was caught in a lot of hype himself -- he was
| trying to get included on the Twitter deal as well, and the FTX
| balance sheet showed $43 million of TWTR stock near the
| acquisition, though Musk claims the offer was rejected.
|
| https://www.yahoo.com/entertainment/elon-musk-calls-report-s...
| texasbigdata wrote:
| Read the text messages (different lawsuit) between musk and
| prominent (imho) Oxford philosopher William McAskill. Musk is
| asked repeatedly to meet and take money from this brillian
| guy called SBF. It's weird bc I read wills book and really
| looked up to him, but clearly SBF can be very convincing.
| Elon seemed to not want to do it but the text messages
| suggest he did eventually take a call.
|
| So Elon must not have liked how that went since he was
| publicly encouraging others to roll over.
|
| My speculation of course.
| jessaustin wrote:
| If this episode isn't a giant warning sign for MacAskill
| and all of the rest of these characters, what would be?
| Maybe he's not as dumb as he always acts, but SBF seems
| more like a pawn of the altruism cabal than the other way
| around.
| freejazz wrote:
| All three of those people are dumb assholes. Not sure how
| that couldn't be clearer given all of their behavior. Part
| of life is being able to suss out people like these
| characters and never once did I think any of them had
| anything of value to contribute.
| adamnemecek wrote:
| It's not really an investment as much as money laundering
| scheme which tend to be 'unprofitable on paper'.
| lordfrito wrote:
| Yeah I wonder if part of his strategy was just to dilute the
| crime so much by having it's tentacles dig into and wrap
| around every small corner of the legit financial/political
| system. At some point the surgery to separate the spreading
| cancer does more harm to the patient than just leaving it.
| It's just impossible to cleanly remove all of the tendrils.
|
| The strategy would start with getting intertwined with
| crypto, then move into crypto-tangential like Robinhood,
| eventually hoping to claw his way into Washington and Wall
| Street. The FTX / Farmington State Bank investment comes to
| mind.
|
| John Ray definitely has his work cut out for him trying to
| unravel this mess. I think he'll be able to cleanly claw back
| anything in TradFi (it's a great test of the TradFi system).
| Good luck trying to clawback any of the crypto. Not like it
| matters though, anything he can claw back there is worthless.
| "Hey, here's your XYZ coin back, you've been made whole."
|
| This is just so fun to watch.
| waterhouse wrote:
| > Yeah I wonder if part of his strategy was just to dilute
| the crime so much by having it's tentacles dig into and
| wrap around every small corner of the legit
| financial/political system.
|
| Deliberately becoming "too big to fail", eh?
|
| (Which was more accurately termed "too big to _be permitted
| to_ fail ". Which then raises the question of who is doing
| the permitting, and why we would trust their judgment; but
| that would give the game away.)
| lordfrito wrote:
| > _who is doing the permitting_
|
| The "who" is just greedy connected people, who are
| everywhere. Including government and finance.
|
| Thankfully we have laws and regulations, which at least
| serve as some checks and balances to prevent these people
| from causing too much damage.
|
| The genius of checks and balances government as that it
| doesn't rely on ensuring "bad" people never get into
| positions of power. You will never be able to stamp out
| 100% of bad actors. Instead it sets things up such that
| the damage bad actors can do is minimized and/or
| identified quickly. Less collateral damage, and a chance
| for justice afterwards.
|
| "No regulations" in crypto should be a warning flag to
| people.
|
| Meanwhile, I'm really really interested if any crimes
| were committed on the "regulated" side of things. Those
| people need to be put in jail. Will be fun to watch this
| unravel.
| scottLobster wrote:
| If FTX and the pathetic Elon-simping txts from the Twitter
| lawsuit discovery have revealed anything, it's that once you
| reach a certain level of wealth you're so immune from
| consequences that losing money has zero effect on you
| personally, and since most of these guys are extremely ego-
| centric to begin with, that removes the only constraint they
| seriously cared about. There are exceptions to this, but that
| seems to be the trend.
|
| Billionaires in general aren't playing 4D chess, why would
| they? 4D chess is hard, requires sacrifice and valuing
| something bigger than oneself and one's bank account. Much
| easier to jump on popular hype trains. If it works you look
| like a genius and have a million stans to stroke you off, and
| money number go up so you can flex on other billionaires. If it
| fails nothing really happens to you personally.
|
| SBF wasn't actually at that level, but he had enough paper
| wealth that he clearly thought he was. We're watching the
| wealthy equivalent of that COVID-denier who, with their last
| breath before being intubated, calls the doctors and nurses who
| diagnosed them liars.
| spookthesunset wrote:
| > We're watching the wealthy equivalent of that COVID-denier
| who, with their last breath before being intubated, calls the
| doctors and nurses who diagnosed them liars.
|
| Which is a work of fiction. Such a thing probably happened no
| more than a few times. The only reason it gets parroted back
| is because it serves as a nice bit of propaganda to gin up
| fear and get people to fall in line.
| babypuncher wrote:
| Herman Cain's Twitter account was still tweeting COVID
| denialism _after_ he died of COVID.
| macspoofing wrote:
| Herman Cain never denied COVID. He argued against
| lockdowns, and masks. He then contracted COVID and died
| from COVID (before vaccines were available), and people
| like you use this to accost the man, making it seem like
| his death was justified. It's a very ugly and distasteful
| position which is made worse by the fact that masks don't
| prevent COVID transmission (we know that now), so him
| masking wouldn't have made a difference. Anecdotally,
| everyone I know got COVID in the last 2 years, which
| included people who strictly followed masking, lockdowns
| and vaccinations regiment and people who didn't. And as
| we get further out from the pandemic, we're seeing more
| and more evidence that masks and broad-scale lockdowns
| were actually a terrible public health policy. So what is
| Herman Cain actually guilty of?
| raverbashing wrote:
| > making it seem like his death was justified.
|
| Death by Denialism? Darwin sends his regards
|
| "The good thing about science is that it doesn't give a f
| about what you think"
| helloworld11 wrote:
| Try for a bit of reading comprehension. The comment above
| makes several very valid points and emphatically states
| that this person wasn't a COVID denier. It's an idiotic
| and frankly dishonest (but too common) thing to blithely
| lump several different intellectual positions together
| and then label them as part of the one worst possible
| position among them, even if someone doesn't subscribe to
| all of those positions. How the bloody fuck is arguing
| against mask mandates and lockdowns being a COVID denier?
| freejazz wrote:
| Because he didn't argue those positions because they were
| sensible responses to COVID, he argued those positions
| because he was reactionary. Coincidentally, at the time,
| they were the best methods we had to control against
| covid. So, maybe at best your point can be taken that he
| didn't deny covid, just the implications of it. I'm sure
| any reasonable person can see why this is a distinction
| with little meaning.
| macspoofing wrote:
| >Death by Denialism?
|
| What Denialism though? He didn't deny COVID. He made no
| statements against vaccines as he died before a vaccine
| was developed. He was skeptical of, and against, the
| public health measures at the time of large-scale masking
| and broad lockdowns ... and science is now with him on
| that.
|
| Up until very recently, there was a segment of the
| population that treated a COVID infection like a
| punishment for sin. That is, "if you got COVID, it was
| your fault". I'm hoping we are moving past this.
| scottLobster wrote:
| The science is with him how? Masking is somewhat
| effective, even the cloth masks may prevent infection in
| passing. It's only when sharing the same space for
| extended periods of time that it becomes ineffective, and
| N95s and Surgical masks remain effective in such
| environments.
|
| Before vaccines masking and lockdowns were the best
| things we could do to even blunt the death count,
| refusing to blunt the death count because you considered
| masks of all things inconvenient is still repugnant,
| selfish behavior. And validating said behavior in others
| from a position of influence is even worse. He may or may
| not have gotten COVID anyway before the vaccines, or
| perhaps he would have avoided it until vaccines were
| available and survived, like many people did. We'll never
| know, because he didn't even try and actively made the
| problem worse than it had to be.
|
| Now there were public health measures that were
| misguided, outright dumb, and completely ineffective. But
| the fact that they existed does not vindicate Herman Cain
| or anyone who agreed with him at the time. They weren't
| misjudged prophets who knew something other people
| didn't, they were selfish people making selfish decisions
| who happened to be partially correct, but also made the
| problem worse than it had to be.
| scottLobster wrote:
| How does pointing out idiots doing idiotic things "gin up
| fear"? If it gins up anything it's pity. The fearful ones
| are the people being intubated and denying the cause up to
| their last breath, they're so fearful that they might be
| even partly responsible for their circumstances, they lack
| the moral constitution to admit it. They're weak, and weak
| people do not induce fear unless they're in a mob.
|
| If I showed you a homeless person dead from a heroin
| overdose, would you fear heroin? No, because it's entirely
| within your control whether you use it or not. I think you
| need to learn how propaganda works.
| CharlesW wrote:
| > _Which is a work of fiction._
|
| Anyone who's spent time browsing r/HermanCainAward, or
| knows nurses who've been on the COVID front lines, can
| assure you that it's not. People die horrible deaths, often
| clawing harder than ever to the conspiracy theories they've
| been fed.
| jasmer wrote:
| Sam is going to jail maybe for the rest of his life, that is
| a 'consequence'.
|
| Elon is facing a $25B write-down of Twitter the moment,
| that's also a 'consequence'.
|
| They are definitely playing 2D++ chess, and a bit of
| cheating, making us think they are playing 3D sometimes, but
| they are not stupid. Most of their glib stuff is calculated
| and it works to great effect.
|
| Musk will probably pull through and still be one of the
| richest dudes ever with Tesla and Space X still floating,
| even if the rest burns, that's still way ahead.
| Octokiddie wrote:
| > Four separate entities have laid claim to the approximately 56
| million shares, worth about $460 million. FTX's new management,
| which is trying to claw back funds for investors and customers of
| the bankrupt platform, have sought to wrest control of the shares
| from an Antigua-based holding company 90% owned by Bankman-Fried.
|
| The article mentions:
|
| 1. SBF himself
|
| 2. FTX
|
| Who are the other two? This seems important because those other
| two entities may have recorded the shares as assets or even
| themselves pledged them as collateral.
| paxys wrote:
| 3. The US government, as mentioned in the title
|
| 4. Probably one of their creditors or authorities in the
| Bahamas
| cypherpunks01 wrote:
| BlockFi is one of them. They believed they were holding the
| Robinhood shares as collateral pledged for a large loan to
| Alameda Research. But when they went to liquidate the shares
| after the loan defaulted, the broker did not allow them to do
| so, as FTX/Alameda had just filed for bankruptcy and I believe
| the estate argued against it.
|
| See https://www.reuters.com/legal/ftx-opposes-blockfis-claim-
| ban...
|
| I am not sure who the 4th party is.
| throwawayapples wrote:
| What claim does the federal government have to these funds?
|
| And how is this seizure even being contemplated before a trial
| and conviction? Does the Fourth Amendment not apply to him just
| because nobody likes him?
| runnerup wrote:
| The 4th amendment doesn't "fully" apply to anyone anymore.
| Especially if the government views you as potentially guilty
| (TSA luggage checks, third party doctrine, various things
| during traffic stops), "potentially" not a U.S. citizen (e.g.
| at border crossings), or "potentially" not in the USA (e.g.
| electronic communications).
| marcinzm wrote:
| >anymore
|
| The present and historical states aren't fundamentally any
| different except in people's rose tinted rear view mirrors.
| soco wrote:
| Wouldn't it be great if people would just read the facts
| presented clearly in the referred articles, instead of making
| catastrophic but unfortunately baseless claims according to
| their alignment...
| [deleted]
| marcinzm wrote:
| I mean you could just read the article:
|
| "The Justice Department said Wednesday that has moved to seize
| millions of shares of Robinhood, the popular stock-trading app,
| whose ownership is disputed by several parties, including
| Bankman-Fried himself, his bankrupt crypto exchange FTX and
| another bankrupt crypto company.
|
| Because the competing claims, FTX filed a motion earlier this
| month to the Delaware bankruptcy court to keep the assets
| frozen until the court "can resolve the issues in a manner that
| is fair to all creditors of the debtors.""
| dehrmann wrote:
| That's still a little weird because usually personal assets
| are shielded from issues a company has (at least for LLCs).
| marcinzm wrote:
| As the quoted text notes, FTX claims these are it's assets
| and until that is resolved is asking the courts for them to
| be frozen.
| quickthrowman wrote:
| It's a bit different when you borrow $500M from your (now
| bankrupt) company to purchase the 'personal assets'.
| JumpCrisscross wrote:
| The TL; DR being the DoJ _moving_ to seize is the start of
| due process.
| peter422 wrote:
| You are right, I mean even though FTX has declared bankruptcy
| and SBF admitted that either his incompetence or malice is the
| cause, the government surely couldn't have enough probable
| cause to seize these clearly unrelated assets.
| warinukraine wrote:
| > these clearly unrelated assets
|
| Troll.
| marcinzm wrote:
| I read the comment as sarcasm but we know how well that
| translates in pure text.
| warinukraine wrote:
| Oh ok. I see it now.
| mannykannot wrote:
| > Bankman-Fried claims ownership of the shares, seeking a source
| of payment for legal expenses, according to FTX.
|
| These shares must have completely slipped his mind when he said
| all he had left was $100k in his bank account.
|
| https://www.axios.com/2022/11/29/sam-bankman-fried-100000-ft...
| SkyMarshal wrote:
| Technically, Robinhood isn't a bank account...
| VHRanger wrote:
| He was telling the truth!
|
| The shares weren't in his bank account, they were in his
| brokerage account
| mannykannot wrote:
| SBF, from the same article: "Basically everything I had was
| just tied up in the company." Of course, he's been
| dissembling all the way down.
| britneybitch wrote:
| Carefully chosen words. A brokerage is not a bank account.
| Also, a crypto wallet is not a bank account.
| TechBro8615 wrote:
| "It's all fungible"
|
| - SBF
| [deleted]
| psychlops wrote:
| Pretty sure "he didn't have the numbers in front of him" when
| he answered.
| bmitc wrote:
| They must have been "mislabeled".
| naillo wrote:
| I wonder if they'll take the $500M or so money AnthropicAI also
| apparantely got from FTX
| jmyeet wrote:
| The Fourth Amendment quite literally has the words "unlawful
| search and seizure". I want people to remember that whenever
| they're pushing the propaganda that is the originalist or
| textualist interpretation of the Constitution by the Supreme
| Court. That propaganda is a lie.
|
| I understand the mental gymanstics used to justify this, in that
| the property is the defendant in a civil action (for a suspected
| criminal act by its owner, no less). The end result is what we
| see here: civil asset forfeiture and absolutely no protection
| against unlawful seizure.
|
| Now a lot of people won't care about this because it's SBF and it
| looks pretty likely that he's guilty. At least there's a criminal
| indictment in this case. If the government has this power (and,
| again, I think they should not) this use seems appropriate.
|
| But the government doesn't require a criminal indictment at all
| (let alone a conviction) to use this power. Consider the case of
| Amy Nelson [1]. At the behest of Amazon, the Department of
| Justice seized the bank accounts of her, her husband, a bunch of
| employees of a company and even their lawyers who worked for a
| law firm, ultimately charging nobody with anything and returning
| 85% of the money 2 years later once the Nelsons agreed not to sue
| the government.
|
| Also, SBF gave tens of millions in donations to both parties in
| the recent midterms. If the Robinhood shares are fair game, why
| aren't the donations?
|
| [1]: https://www.geekwire.com/2022/former-seattle-entrepreneur-
| an...
| jasonwatkinspdx wrote:
| The SEC is literally announcing they're pursuing the legal
| process, not doing an unlawful search and seizure.
| crazygringo wrote:
| I think you're missing the "unlawful" part. Because this is all
| totally lawful, according to bankruptcy _law_.
|
| Bankruptcy proceedings are _all about_ identify all assets and
| loans, and figuring out how to recover them maximally in order
| to distribute whatever 's left of them to creditors and owners.
|
| This isn't some arbitrary seizure. Obviously an owner can't be
| allowed to start drawing gigantic loans from a company they
| control, declare bankruptcy, and think they get to keep the
| loan money or what they've bought with it. (Same thing as how,
| in a criminal case, a thief can't sell a stolen painting for
| $10M cash, and then expect to be able to use that cash to fund
| their defense.) Bankruptcy court rightly has the power to claw
| back fraudulent transactions such as these.
|
| I'm not saying the government never abuses search and seizure,
| but in the specific case of _bankruptcy_ , retrieving assets is
| the _whole first half_ of bankruptcy (with their reallocation
| being the second). So bankruptcy is basically the worst example
| you could use for trying to claim abuse of search and seizure.
| bmitc wrote:
| I am also curious what is considered to be unlawful about
| this. This person has been charged with financial fraud,
| amongst other things. It makes perfect sense why financial
| assets would be seized.
|
| And from some other comments pointing this out, this seems to
| be related to the bankruptcy of FTX and a claim to the funds
| by FTX.
| tedunangst wrote:
| > If the Robinhood shares are fair game, why aren't the
| donations?
|
| Because SBF allegedly owns the shares. He doesn't own the
| donation. Unless you want the government to seize whatever
| goodwill the donation got him.
|
| That would be a fun sheriff's sale. "One lunch with selected
| congressman, to discuss voting in up to two bills."
| graeme wrote:
| Actually the donations may well be clawed back in the
| bankruptcy proceedings, depending how recent they are.
| kens wrote:
| > The Fourth Amendment quite literally has the words "unlawful
| search and seizure".
|
| It literally does not.
|
| https://en.wikipedia.org/wiki/Fourth_Amendment_to_the_United...
| graeme wrote:
| The article is a little unclear but it appears the assets are
| being seized because there is a reasonable claim they're part
| of the _bankruptcy_ estate of FTX, which isn't directly related
| to SBF's trial.
| twelve40 wrote:
| So the interesting thing is that he massively toned down his
| public/online presence, was that a part of the deal or what else
| has changed?
| notyourwork wrote:
| When the years of jail time start racking up you usually stop
| talking as much.
| twelve40 wrote:
| Um they were racking up a month ago just the same
| spookthesunset wrote:
| But a month ago the idea the feds would get him was just
| fantasy (in his mind). Shit probably got very real once
| somebody slapped some handcuffs on him.
| 0cf8612b2e1e wrote:
| Is there any interpretation where he is not going down for
| all of the crypto ills? That the fraud was so
| straightforward, I expect the book to be thrown at him to
| make an example. What more could he say at this point to make
| the situation any worse? His lawyers were surely telling him
| to stop shut up for the past two months and he didn't listen
| then.
| zactato wrote:
| I actually sat across the aisle from him on his way back from
| NYC -> SF this past week. He really didn't want to make eye
| contact with anyone.
| tofuahdude wrote:
| Living at your parent's house with an ankle bracelet, only out
| of jail on a $250 million bond is quite a different scenario
| than being in a Bahamian mansion.
| notch656c wrote:
| Dude is staring down the barrel of the rest of his youthful
| years in jail, meanwhile he lives close enough to a coastline
| where he could board a yacht and be well into international
| waters god knows where in an anonymous fishing boat with
| hundreds of millions in crypto before sunrise.
|
| The most baffling part of all of this is that he has never
| attempted to escape. Surely a Liberian or Somalian warlord or
| something will protect him in exchange for $1MM / annum and
| probably provide him a harem and a nice plot of desert.
| vkou wrote:
| I have doubts that the FBI are just going to let him waltz
| off onto a yacht and sail into the sunset.
|
| They might let him waltz off onto a yacht, and sail just
| far enough to slap some charges for violating his bail
| terms, though.
| lordfrito wrote:
| > _The most baffling part of all of this is that he has
| never attempted to escape._
|
| SBF is either a criminal genius, or so self-deluded he
| might be borderline psychotic.
|
| A criminal genius, knowing what they're doing is a crime,
| would have an exit strategy.
|
| The fact there wasn't an exit strategy tells me that SBF
| really believed in what he was doing. That he really was
| the genius everyone has been telling him he was. So the
| conclusion I'm drawing is this just self-delusion on a
| grand scale.
|
| I mean, there's really no other explanation for him running
| his mouth against his lawyers advice, talking about how
| everyone doesn't understand this will all work out he was
| about to close another $8B etc. He really believes he's the
| smartest guy in the room. If only we regular folk could
| understand him. He's not living in reality.
|
| Usually the worst guys like this do is con their
| friends/family out of a $100k to start some wild ass
| venture that "can't go wrong". This guy talked his way into
| how many billions? I suppose the difference is attributable
| to how well connected he was.
|
| If so, what a damning indictment on the rich, well
| connected, cultural elite in and around SBFs world. The
| right has been pointing out for a while that the cultural
| elite seem disconnected from reality. We'll, here's some
| hard evidence that supposition may in fact be correct. Call
| it an "elite" bubble, where they're so disconnected from
| reality that whatever they seem to believe works out, so
| they must all be geniuses. The people setting cultural
| policy in this country are untethered from any sort of day-
| to-day reality.
|
| I mean, SBFs mother wrote that piece about not assigning
| blame when things go wrong. [1] Parents with this kind of
| thinking raise deluded kids like SBF. And his well
| connectedness got him the $Bs needed to create this
| disaster.
|
| If my hypothesis is correct, then this guy is heading
| towards a huge mental breakdown. He's never been challenged
| by reality, and frankly won't know what to do with himself
| once the prosecution gets running and the blows start
| landing fast and furious. It was only two days ago the
| judge told him to stop accessing Alameda funds, at which
| point SBF became "animated". [2] This rich kid is in for a
| collosal wake up call.
|
| [1] https://www.businessinsider.com/sam-bankman-frieds-mom-
| wrote...
|
| [2] https://twitter.com/molcranenewman/status/1610363438748
| 02073...
|
| edit: edited to point out this is an indictment of the
| trusted people in and around SBFs world, not "wokes" or
| "elites" in general.
| nipponese wrote:
| Don't you think it could be as simple as he's just a
| gambling addict with an ivy league Rolodex who just fell
| into this moment in cryto-gambling history?
| lordfrito wrote:
| Yes I do think that's exactly what this is.
|
| I also think the system all around him his whole life let
| his unhealthy behavior go unchecked. This kid needed some
| tough love. Instead his mom pens essays writing how "the
| philosophy of personal responsibility has ruined criminal
| justice and economic policy". [1]
|
| Yeah, when your parents say personal responsibility has
| no place in economics or justice, of course you're going
| to double down on line-go-up.
|
| He's been patted on the back his whole life. Now real
| average Joe's are out a LOT of collective money. Real
| people being hurt here.
|
| This would never have happened at this scale had any sane
| adults been in the room. This is an indictment about the
| kind of people in the world that SBF spent his life
| living in.
|
| [1] https://www.bostonreview.net/forum/barbara-fried-
| beyond-blam...
| archagon wrote:
| Did you actually bother to read the article? Or is this
| just another gotcha reaction to a headline?
| sbarre wrote:
| > If so, what a damning indictment on the rich, well
| connected, "woke" cultural elite running this country.
| The right has been pointing out for a while that the
| cultural elite seem disconnected from reality. We'll,
| here's some hard evidence that supposition may in fact be
| correct. Call it an "elite" bubble, where they're so
| disconnected from reality that whatever they seem to
| believe works out, so they must all be geniuses. The
| people setting cultural policy in this country are
| untethered from any sort of day-to-day reality.
|
| Why does this have to be a left/right thing for you?
|
| There are grifters in all parts of society, and in all
| cultural groups. And there's no connection between wealth
| and intelligence, so there will always be a never-ending
| line of people with money who will fall prey to said
| grifters.
|
| Political allegiance and cultural beliefs have nothing to
| do with it.
| lordfrito wrote:
| > _Why does this have to be a left /right thing for you?_
|
| I'm looking for answers. I agree that con artists come
| from all walks of life. But this isn't your average
| greedy person and an average con. That's why we're
| talking about this.
|
| Normally when dealing with this kind of money there a lot
| of social checks and balances to prevent someone like
| this from ever having the ability to do this kind of
| damage. You just can't put untethered/unhinged people in
| positions of power. Money may help break down barriers,
| but you start with knowing who you can trust, and those
| you've vetted, and those they've vetted.
|
| SBF was clearly vetted. By trusted people. Who were
| supposed to be wiser.
|
| This isn't one persons failings, it's pretty clear that
| the people around SBF either encouraged or enabled him or
| both. They all looked the other way. How did that happen?
|
| So that's the angle I'm interested in here. How in the
| heck did the kid get this far? Whatever caused this to
| happen should be identified and contained, lest we get a
| repeat performance elsewhere.
|
| The only common denominator I see is that there is
| leftist thinking in and all around SBFs world. He's
| soaked in it.
|
| His mom wrote an essay saying "the philosophy of personal
| responsibility has ruined criminal justice and economic
| policy". [1] This is _very_ leftist thinking. This is one
| of the core people responsible for helping lay a moral
| foundation for this kid. Is it any wonder that SBF thinks
| this is all one big misunderstanding?
|
| There's all the Ivy league connections, not known for
| being particularly conservative. For example there's this
| [2]. SBFs dad taught at Stanford.
|
| His mother also started a Democratic super-PAC "Mind the
| Gap". [3] So clearly this family doesn't just lean left,
| but they feel it's their duty take their beliefs in the
| public sphere, to help push a leftist agenda in politics.
| These are True Believers if you will. I'm certain their
| circle of friends is also heavily left leaning. No one
| who starts a left leaning super-PAC has a lot of close
| right wing friends.
|
| You can say those were just his parents views. But I say
| the apple doesn't fall far from the tree. Certainly
| explained why SBF talked a lot about Effective Altruism
| and donated politically. He believed in pushing his views
| on others and wielding that kind of power politically.
| This isn't your average crime -- I think this kid is
| seriously deluded, and thought he was changing the world
| for good. So yeah, his world view, however it leans, is
| worth examining close up. Because this kid isn't living
| in reality, and the belief system that put him there, and
| enabled him to do damage to others, deserves some
| scrutiny.
|
| This kid was raised by leftists, in and around leftists,
| and their views have spilled over into his actions. The
| group of people around SBF created this monster. I'm not
| putting politics into this, I'm pointing out that he and
| those around him did. That's what I'm suggesting.
|
| And so it seems to me this group of very left leaning
| people encouraged and connect SBF to people, thereby
| enabling him commit crime at this scale. And not one of
| them raised any red flags? Not one concern? I guess
| because on the outside he looked like one of them? I can
| tell you this, the right leaning people I know have been
| sounding alarms about the crypto space for a good long
| time.
|
| Again, this isn't your average con. We're talking about
| _massive_ systemic blind spots in the thinking of those
| trusted /vetted adults sitting in the room with SBF.
|
| I'm not trying to _make_ this a left /right thing. But
| there is a lingering smell of leftism all around it. And
| I do think that's worth bringing up, because I don't want
| a repeat performance. A lot of real average people got
| hurt here. This may be one big social experiment to the
| elites SBF runs with, but it's not to the little people
| that are losing money. The blind spots in thinking here
| need to be uncovered and examined up close.
|
| [1] https://www.bostonreview.net/forum/barbara-fried-
| beyond-blam...
|
| [2] https://www.thecrimson.com/article/2022/7/13/faculty-
| survey-...
|
| [3] https://www.influencewatch.org/political-party/mind-
| the-gap/
| foolswisdom wrote:
| I think the intended point is not that there are
| grifters, but that growing up in an environment where
| there philosophy of "not being personally responsible"
| that SBF's mother wrote about, created conditions
| necessary for delusion and (leading to) crime in such
| scale.
| lordfrito wrote:
| Dang you said this better than I did. Well done.
| notahacker wrote:
| Seems like a heroic stretch of the imagination to imagine
| that his mum's essay on blame had more influence on SBF
| running crypto get rich quick schemes than the get-rich-
| quick culture of crypto itself, which tends to be right
| libertarian, often very outspokenly so. Or indeed his
| fondness for gambling.
|
| Ironically, people trying to argue Sam is a product of
| the "leftism" of his environment are expressing his mum's
| position on determinism, whilst the utilitarian moral and
| mathematical arguments Sam quoted to rationalise his
| enthusiasm for grand gambles is rooted in the exact
| opposite position...
| sbarre wrote:
| > Surely a Liberian or Somalian warlord or something will
| protect him in exchange for $1MM / annum and probably
| provide him a harem and a nice plot of desert.
|
| You watch too many movies my friend.
| notch656c wrote:
| Happened to the "white widow" from England, who was a
| fairly boring white English girl without remarkable
| connections. She had far less money and was protected in
| Somalia. She also is far more wanted as she was an actual
| terrorist who helped kill people.
|
| She is protected by various Islamic groups in the
| Somalia/Kenya border region, it is believed and evades
| determined capture by the rich Anglosphere nations.
|
| https://en.wikipedia.org/wiki/Samantha_Lewthwaite
| sbarre wrote:
| Yeah those are two completely different scenarios, don't
| you think?
|
| A rich western elite just buying protection from Islamic
| warlords in Africa sounds like a movie plot.
|
| It isn't remotely the same thing as your example of
| someone who has 20+ years of connections to a religion
| and community disappearing into its criminal underworld.
|
| Also "without remarkable connections"? The Wikipedia
| article that you linked says she was literally married to
| one of the 7/7 bombers and associated with other known
| terrorists, including one whose family is from Kenya.
|
| Anyways this is more words than I even wanted to write
| about this.
| boeingUH60 wrote:
| It's not surprising that a terrorist sought shelter with
| people of similar ideology. Will you expect SBF to go
| squat with religious extremists or warlords in remote
| locations and constantly on the run from armed -to-the-
| teeth military personnel? I think American prison might
| be better..
| [deleted]
| c7b wrote:
| There's even a recent case with far more similarities.
| Incidentally, also related to a crypto scam, one of the
| FBI's most wanted criminals is believed to have escaped
| on a yacht in the Mediterranean and has managed to stay
| hidden for five years (and counting):
| https://en.wikipedia.org/wiki/Ruja_Ignatova
| AlexandrB wrote:
| On the one hand, yes. On the other hand Epstein existed
| and fraternized with a variety of prominent political and
| business leaders. Truth is sometimes stranger than
| fiction.
| jasmer wrote:
| The CIA will find Sam wherever he goes. Nobody will stand
| up to the US Government for any amount of money. Only
| Russia or China could protect him and I don't see why they
| would.
|
| If Sam was really, really smart, he'd have found his way
| into their den, so that Xi could use him as populist
| political treasure. I mean, Sam would be eating dumplings
| for the rest of his life, but hey, China is a big and
| interesting place!
| chessgecko wrote:
| I'm a fan of the conspiracy that he's the fall guy here and it
| was on purpose to draw all the attention. Can't ham it too hard
| though or it'll get suspicious.
| WJW wrote:
| You have to be one hell of a fall guy to accept life in
| prison. What's in it for him? Who would he want to protect
| that hard to accept decades of prison time, and/or what could
| they have on him that would make life in prison preferable to
| them revealing it?
|
| It's a fun conspiracy but it doesn't make a lot of sense.
| jessaustin wrote:
| There is nothing he could say or do to stay out of prison
| right now. He will certainly receive a very long sentence.
| His handler might be dangling the possibility of an early
| release on "good" behavior, or a less appealing result on
| "bad" behavior. He'll still be young in a decade. His
| handler might be lying to him, but the Epstein case was
| very recent so for now SBF has to believe. He might be dumb
| but he's not naive enough to believe in USA justice system.
| thesausageking wrote:
| Sequoia was heavily invested in Robinhood and then backed FTX and
| promoted SBF as the next great founder, evening allowing him to
| invest in their fund as an LP with money he took out of FTX.
|
| That seems pretty suspicious.
| afrcnc wrote:
| VC bros will fund almost anything. Not that suspicious. I've
| seen them fund cybersecurity firms on the edge of legality,
| even after they were questioned in the Indian Parliament on a
| major corruption case. Nothing is too shady for these people.
| birdyrooster wrote:
| I just want to see the egghead man lose everything in
| disgrace.
| chollida1 wrote:
| One interesting thing about these shares that hasn't been
| confirmed as far as I can tell is that they were rumored to have
| been used as collateral for loans FTX took out.
|
| If this is true, then someone else(Genesis) has a $500M hole in
| their balance sheet due to this. Which will lead to knock on
| issues, just like how Luna -> 3AC -> Celsius and Voyager -> FTX
|
| In additional knock on effects, the US sized about $100M of
| crypto assets from FTX that Silvergate bank was holding.
|
| This put more stress on Silvergate bank that was already in alot
| of trouble over their loans and shrinking crypto assets.
|
| Based on the Government asking Silvergate for the HOOD shares and
| $8B in customer withdrawals they've gotten, they're down almost
| 50% today alone.
|
| We'll probably see someone acquire them for nothing or we'll have
| a bank failure pretty soon.
|
| Almost certainly people like Elizabeth Warren will use this to
| show that crypto is having a spill on effect to the real world
| economy and therefore should be under their regulatory control
| shuntress wrote:
| Crypto is as much a part of the "real world" as anything else.
| Like everything else in the real world, we need to decide at a
| societal level how we want to use it then regulate that use
| with "regulatory control".
| r00fus wrote:
| > Crypto is as much a part of the "real world" as anything
| else.
|
| I disagree. It's tulip mania all over again and serves only
| to facilitate corruption and fraud. Name any single legit use
| cases that are more than 20% of transactions.
| shuntress wrote:
| What I meant by that is that laws and regulations still
| apply. Crypto exchanges are not exempt from society just
| because they are online.
|
| And it's not _only_ corruption and fraud. That implies some
| level of intent. I 'm sure more than 20% of transactions
| are honest day traders just trying to make a quick buck
| before the speculation collapses.
| Swenrekcah wrote:
| It's all corruption and fraud.
|
| Speculative trading on known garbage is certainly some
| kind of moral corruption and ethical fraud, although not
| illegal.
|
| I say this having made a little under $1000 doing so
| occasionally for the past 2 years.
| yieldcrv wrote:
| Tulip mania lasted for 3 months and has been said about
| crypto for 12 years consecutively
|
| even as hyperbole it relies on a misunderstanding of tulip
| mania, eventually getting a list of a bunch of separate use
| cases and some poor soul actually getting roped into
| watching you play devil's advocate on each use case about
| how its not a "legit" one
| JacobThreeThree wrote:
| Purchasing crypto as an investment asset is the primary use
| case. Just because this asset was part of a speculative
| bubble, doesn't mean it's a fraudulent or corrupt asset.
| amanaplanacanal wrote:
| Investment implies some sort of earnings. Otherwise it's
| just speculation on prices rising. People invest in
| businesses, and speculate on commodities.
| coffeebeqn wrote:
| Silvergate is basically banking for all the crypto companies.
| Probably as big if a deal if not bigger than tether going down
| rhacker wrote:
| Without regulation, it's just a huge casino.
|
| Then again, it's not really possible to regulate.
| user3939382 wrote:
| It can easily be regulated. Enforcement is a different issue.
| The reason I'm not set for life is because when I discovered
| bitcoin at $0.25 my immediate reaction that the banking
| cartel that runs the world would get it regulated out of
| existence the second it got on their radar. In the long run
| I'm probably right but I could have made out in the meantime.
| AlexandrB wrote:
| > The reason I'm not set for life is because when I
| discovered bitcoin at $0.25 my immediate reaction that the
| banking cartel that runs the world would get it regulated
| out of existence the second it got on their radar.
|
| I think about this too, but I'm conservative enough that I
| would not held onto (all) BTC as it went past $1000, so I
| suspect my gains would have been large relative to my
| investment, but not life-changing.
| dec0dedab0de wrote:
| _I think about this too, but I 'm conservative enough
| that I would not held onto (all) BTC as it went past
| $1000, so I suspect my gains would have been large
| relative to my investment, but not life-changing._
|
| I tell myself the same thing, except I would have sold at
| $100
| spookthesunset wrote:
| If crypto becomes regulated (and actively enforced!), the
| whole thing will crater. There is absolutely no point to
| crypto besides being used as a way to bypass regulation.
|
| With regulation, crypto is a completely boring pseudo-
| investment.
|
| But hey, maybe I'm wrong and regulation will be a positive
| for crypto. I doubt it very much though.
| JumpCrisscross wrote:
| > _it 's not really possible to regulate_
|
| Hell of a lot easier than cash.
| etothepii wrote:
| This is both true and not true. Cash is notionally
| untraceable but try moving $10m in cash illegally for less
| than 10% fee, and good luck buying anything if that cash
| represents a sizeable portion of your legitimate net worth.
| A4ET8a8uTh0 wrote:
| Yep. Most people do not believe me, when I tell them that
| having even 10k USD on their person is asking for
| trouble. Sometimes I wonder if people understand the
| world they operate in.
|
| Then I remember more and more people pay with plastic or
| phone and it kinda starts to click.
| LarryMullins wrote:
| > _Cash is notionally untraceable but try moving $10m in
| cash illegally for less than 10% fee,_
|
| That's easy if you can tolerate risk; just put it in the
| back of a u-haul and obey the speed limit. Of course if
| the "cash" is actually a number in a bank account, not
| actual cash, then it's not so easy.
| [deleted]
| 1vuio0pswjnm7 wrote:
| "Almost certainly people like Elizabeth Warren will use this to
| show that crypto is having a spill on effect to the real world
| economoy and therefore should be under their regulatory
| control."
|
| Under this analysis one could argue that Madoff was having no
| effect on the "real world economy" so his conduct should not
| have been regulated. His "advisory service" made zero
| investments. All he did was accept money from clients, spend it
| on himself, his family, his employees and charitable donations.
| His advisory service was arguably "disconnected" from the real
| world economy. For example, when the real world economy was
| going into a "meltdown", when Madoff knew he could not pay all
| of his clients' withdrawals, he wanted to use the limited funds
| he did have in the Ponzi account to give bonuses to his sons.^1
|
| It was the real world economy, i.e., the 2008 conditions, that
| ultimately brought Madoff down.
|
| 1. That tipped them off, they discovered the fraud and once
| they knew about it, they had to turn him in or else risk facing
| criminal charges themselves. One of them later committed
| suicide, the other died of cancer.
|
| Madoff was not buried as is customary for his faith. He was
| cremated and his family refused to accept the ashes. They are
| allegedly in his lawyer's office.
|
| How will SBF's family react to what he has done if and when all
| the facts are revealed. Unlike Madoff's family it seems like
| they knew what he was doing. Time will tell.
| faangiq wrote:
| It's all a huge ponzi. When exiting a ponzi if you're not
| first, you're last.
| CyberDildonics wrote:
| What if you're second and there are more than two people?
| dragonwriter wrote:
| > One interesting thing about these shares that hasn't been
| confirmed as far as I can tell is that they were rumored to
| have been used as collateral for loans FTX took out.
|
| FTX in the broad sense (Alameda borrowing from BlockFi,
| specifically), which is why SBF (who nominally owned the
| shares), FTX (from whom SBF appears to have "borrowed" the
| purchase funds), and BlockFi were in litigation over ownership
| of the shares, as I understand it.
| lordfrito wrote:
| Popcorn time.
|
| Is it wrong that I'm smiling?
| smcl wrote:
| A few irritating people will get a moment of being shamed in
| public and a large amount of people ranging from "stay poor"
| cryptobros to naive people swayed by shiny advertising will
| lose a lot of money. Just savour the moment the SBFs and the
| CZs of the world get their _just deserts_ and pray that it
| isn 't the first domino of a bigger problem that spreads
| outside crypto
| jasonwatkinspdx wrote:
| The people I feel worst about are friends and family of
| someone with some tech credentials that convinced them all
| to jump in. You can say these people should have vetted
| their investment but that's being a bit absurd. Media has
| been blasting stories about crypto successes uncritically
| for a couple years now. Some of the most high profile
| investors in the world are in all this. And on top of that,
| for our elderly relative, the young tech relative is
| exactly the person they ask for help in evaluating this
| investment opportunity. So you can say they shouldn't have
| invested if they weren't 100% certain, but again I think
| that's just denying the reality of things.
| freejazz wrote:
| > Media has been blasting stories about crypto successes
|
| Really? Maybe crypto media
| lordfrito wrote:
| Plenty of people were saying crypto was nonsense for a
| long time.
|
| Yeah it sucks average Joe's got suckered. I feel the
| pain.
|
| But every generation brings a new group of greedy people
| that fall for get rich quick schemes, and they all
| usually learn there ain't no thing as a free ride the
| hard way. People like this won't listen to the warnings.
| "Have fun staying poor".
|
| I'm sorry there's collateral damage. But people like this
| are going to get conned somewhere. Best these people
| learn a lesson, then they can be smarter with the rest of
| their lives.
|
| Yeah, the media was all hype. Well guess what, the media
| isn't reality folks. And they're certainly not looking
| out for you. More timeless lessons to learn. Be careful
| who you trust.
|
| Keep the government away from money!! Hey FBI someone
| stole my bitcoins!
|
| So much old wisdom being re-learned right now. It's about
| time. The longer this was going to go on the more people
| were gonna get hurt.
| jasonwatkinspdx wrote:
| Yeah, you can say "they should have known it was too
| good" but I mean seriously, huge sporting events are
| plastered in cryptocoin logos. High profile papers like
| the WSJ spent years portraying cryptocoin as at least
| something as relevant as traditional finance if not its
| proximate replacement. The biggest banks and VCs are
| deeply involved and trumpeting loudly. Huge old school
| tech companies like IBM suddenly talking about the
| blockchain revolution. And my 80 year old aunt is somehow
| supposed to read that all this is just an astoundingly
| massive bubble? I just don't think it's a realistic
| expectation. This has happened many times before, which
| is why we have these regulations in the first place.
| Lessons relearned indeed.
| luckylion wrote:
| > And my 80 year old aunt is somehow supposed to read
| that all this is just an astoundingly massive bubble?
|
| No, she's supposed to read "8-18% per year guaranteed, no
| risk*" and say "there's no legal way that's possible and
| there are too many asterisks, I'll stay with Vanguard".
| befair164 wrote:
| [dead]
| lordfrito wrote:
| The way we protect 80 yo grandmas is by sounding alarms
| to anyone that will listen that this is a scam.
| Especially if that 80 yo grandma is yours.
|
| It's why the anti-crypto crowd has been so vocal. They're
| not haters. They're trying to warn others.
|
| The frustration in that crowd is that you're ridiculed
| for your lack of faith. Hence the schadenfreude.
| A4ET8a8uTh0 wrote:
| There is nothing wrong with crypto in an abstract. There
| is a reason it was brought into existence to begin with (
| onerous KYC, BSA regs and so on ). Naturally, the pieces
| that made it interesting ( pseudo-anonymity, non-
| reversibility ) made it worthwhile.
|
| The issue is that it became a defacto tool of choice for
| average fraudster to rehash old scams.
|
| I am not feeling the pain, but I am also not celebrating.
| I want balance and getting SBF should bring some
| semblance of it ( semblance, because he should be not
| connected enough to make sufficient amount of connected
| people angry and vindictive ).
| astrange wrote:
| There's a lot of things wrong with it in abstract!
| A4ET8a8uTh0 wrote:
| Could you elaborate? I do not want to assume your
| position and put words in your mouth.
| astrange wrote:
| "It's a more expensive version of Transferwise that's
| only useful for criminals, but isn't useful for them
| because their transaction history is public and forever"
| should be good enough.
|
| That and "it doesn't get any more useful as you add
| nodes, but you still have to add them or people can hack
| it".
| A4ET8a8uTh0 wrote:
| << "It's a more expensive version of Transferwise that's
| only useful for criminals, but isn't useful for them
| because their transaction history is public and forever"
|
| That is is testable. I used it and whether it is more
| expensive appears to depend a lot how/when/what you use
| to facilitate it.. not completely unlike Transferwise,
| which is basically a broker of such services, which is
| how they can offer them at a relative low cost.
|
| If I used it and found it useful, does that make me a
| criminal?
|
| << only useful for criminals, but isn't useful for them
| because their transaction history is public and forever"
| should be good enough.
|
| What you seem to be saying is that crypto has properties
| that are useful and properties that are not useful. In a
| practical sense, that means it is just like any other
| payment type ( fedwire has speed over ACH in US; Zelle
| has convenience over SWIFT in US ). All of these leave
| some of sort of trace. Crypto's differentiating factor is
| that the ledger is public. It is both good and bad
| depending on what you want to achieve.
|
| So, allow me to reframe the question, if only criminals
| use it, why do they do it if it is not useful to them.
| Your argument is a little flimsy.
|
| << That and "it doesn't get any more useful as you add
| nodes, but you still have to add them or people can hack
| it".
|
| I agree in principle, but between all the hacks we have
| seen from all the other non-crypto companies over the
| past few years, I am not willing to hold crypto to a
| higher standard.
| astrange wrote:
| > If I used it and found it useful, does that make me a
| criminal?
|
| Probably whoever's on the other side of the transaction
| is. If you bought your BTC on localbitcoins you probably
| got them from a money launderer for instance. Nootropic
| companies are the most legal crypto users I'm aware of.
|
| (And don't forget the costs of converting to/from crypto
| coins to get to the final good you purchased with the
| money you transferred.)
|
| > So, allow me to reframe the question, if only criminals
| use it, why do they do it if it is not useful to them.
| Your argument is a little flimsy.
|
| Criminals aren't very smart. If they were, they wouldn't
| be criminals, which is a very low-paying career.
|
| > I agree in principle, but between all the hacks we have
| seen from all the other non-crypto companies over the
| past few years, I am not willing to hold crypto to a
| higher standard.
|
| The regular financial system doesn't need to be 100%
| immune to hacking because it can undo transactions.
| A4ET8a8uTh0 wrote:
| << If I used it and found it useful, does that make me a
| criminal? >> Probably whoever's on the other side of the
| transaction is. If you bought your BTC on localbitcoins
| you probably got them from a money launderer for
| instance. Nootropic companies are the most legal crypto
| users I'm aware of.
|
| I did buy mine from Paypal so you might be onto
| something.
|
| << Criminals aren't very smart. If they were, they
| wouldn't be criminals, which is a very low-paying career.
|
| Um. I would maybe call it a reverse survivor bias. As for
| the low paying claim, I suppose it depends on other
| factors, but we are currently commenting on an article,
| which discusses sums upwards of millions of dollars.
| Reality is refuting that claim unless you want to include
| everyone with a felony in that circle ( technically
| accurate, but I personally think financial fraud is its
| own world that lives outside petty criminal circles ). I
| am open to rebuttal.
|
| << The regular financial system doesn't need to be 100%
| immune to hacking because it can undo transactions.
|
| Hmm. It technically _can_ , but, for example, as some
| people in fraud cases unfortunately found out, once wire
| is sent out, getting it back is not as simple as pressing
| a button even for institutions within the same
| jurisdiction. You are not exactly wrong, but you are not
| right about it either.
|
| I will admit that this is a first time I see that stated
| this way and I am a little confused. In a very practical
| sense, nothing is 100% immune if history is any
| indicator. If my router is hacked, the fact that I revert
| it to its prior state makes ok? The original issue
| remains in place. I am sorry, it is just an odd argument
| to make. Can you elaborate on what you meant?
| lordfrito wrote:
| > _The issue is that it became a defacto tool of choice
| for average fraudster to rehash old scams._
|
| You're 100% right. And in theory bitcoin is fine and will
| still work. The problem is the underlying mechanisms that
| attract fraud and crime into unregulated spaces.
|
| 1) I never thought crypto had that much utility for the
| average person. It does have a lot of utility for drug
| dealers, human traffickers, and organized crime.
|
| 2) Lack of regulation is a warning sign. Con men and
| fraudsters are probably mentally primed to spider sense
| financial spaces and loopholes LEOs are not paying
| attention to.
|
| 3) The above two points make crypto a magnet for crime.
| In retrospect it's no wonder the space is full of bad
| players. Buying drugs was bitcoins first killer app. Pump
| and dump frauds are it's second.
|
| 4) At this point (as you were saying) "crypto" isn't what
| it started out as, or wanted to be. But the harsh reality
| is that it's likely irrevocably tainted, and any attempt
| to reboot would have to still contend with the above
| points.
|
| 5) Any attempt to cover the above points, and you just
| get a regular digital payment system that doesn't work
| well for criminals. Technology aside, the utility is no
| different than the dozen or so phone app instant payment
| systems already out there. What's the incentive of
| average joe using Zelle to pay his bills (at no cost) to
| jump ship into a new unproven digital currency? The
| problems being solved here are already solved.
|
| So to me crypto is just technology looking for a
| solution. Similar technology can power a fed digital
| dollar, or Bank of America tokens (which is all your
| balance there is anyway), and is arguably better in every
| way due to regulation and clawback protections.
|
| Crypto's only real utility turned out to be being the
| currency of last resort for criminals. Anyone legit has
| better options to use. So any unregulated space will
| naturally evolve towards being full of bad players and
| crime. Everyone else goes back to their FDIC banks.
|
| The key lesson here is that the primary utility of any
| extra-governmental payment systems _will always be_ being
| the currency last resort for criminals. So in my mind,
| that kills the dream of crypto-anarcho-capitalism. It was
| an interesting experiment while it lasted. I don 't see
| how it can recover.
|
| As one last point. I came to this line of thinking and
| conclusion once before, dealing with Freenet and crypto-
| information space. Freenet is arguably the crypto-anarcho
| version of the WWW. Same goals, no government
| involvement, no censorship.
|
| If you haven't followed it's history (been around over 20
| years), the space is entirely polluted with CSAM, so much
| so that many of the idealistic early adopters have fled
| the space in disgust. [1] Same analogy applies here,
| Freenet, being the storage space of last resort for data
| so repulsive no government will allow you to have it, is
| a haven for the worst kinds of data imaginable.
|
| At this point I'm convinced crypto-anarcho-anything will
| eventually simply become a magnet for crimes and
| reprehensible people. There's no place else that's safe
| for them to go, while the rest of us have safer/regulated
| spaces.
|
| It's humans that killed the crypto dream. Technology
| can't solve all of our problems. We do now, and will
| always need, human accountability in the loop.
|
| Ok my last-last point. Seeing this play out multiple
| times now, I'm convinced that total anonymity on the
| internet is a cancer that must eliminated if digital
| society wants to move forward. The real world maintains
| peace/order/justice because we have real identities and
| real reputations. A similar system is needed in the
| digital world if we're to evolve past this stage where
| average people run the daily risk of being waylaid by
| digital highwaymen. The digital world is still in the
| medieval ages. The solutions that have allowed society to
| evolve and scale in the real world need to be implemented
| in the digital world before we can take it's potential to
| the next level.
|
| [1] https://news.ycombinator.com/item?id=28587220
| A4ET8a8uTh0 wrote:
| << At this point "crypto" isn't what it started out as,
| or wanted to be. But the harsh reality is that it's
| likely irrevocably tainted, and any attempt to reboot
| would have to still contend with the above points.
|
| This is by far the most accurate and level-headed take I
| saw on HN regarding crypto. I am not completely sold on
| the remaining points, but it is hard for me to refute
| them ( and I do not have a way to see how things evolve
| from this point in time ).
|
| In short, I think I agree with you.
| jasonwatkinspdx wrote:
| Your first two paragraphs are written if the 2nd was some
| sort of exogenous tragedy, rather than the obvious
| result. Chesterton's Fence, etc.
|
| But again, I don't expect joe public to have enough
| understanding to navigate this stuff solo.
| A4ET8a8uTh0 wrote:
| Um. I don't want to sound difficult, but I would
| personally want to turn your attention to words of
| Elizebeth Rosenberg[1] about de-risking. Surely, you
| would not consider calling her Joe Public that has no
| understanding of the issues at hand? All this is a result
| of current badly outdated banking regime and that
| includes the apparent need and emergence of crypto.
|
| I agree that it is a cause and effect, but I worry that
| you may be mistaking one for the other.
|
| [1]https://home.treasury.gov/news/press-releases/jy1143
| Barrin92 wrote:
| >You can say these people should have vetted their
| investment but that's being a bit absurd.
|
| Is it? It's just plain old avarice. When someone comes to
| you and says, "give me a coffer full of money, I'll bring
| you ten coffers back, don't ask too many questions", you
| know you're gambling, don't need to be a genius to see
| that.
|
| My grandfather who had like six years of formal education
| and lived in a village of 300 people always told me to
| not invest money into anything that you don't understand.
| That's about the level of common sense required to dodge
| the crypto bullet. People got greedy, and wilfully
| ignored the shadiness because they wanted to earn
| outsized returns quickly without doing anything, that's
| about it.
| jasonwatkinspdx wrote:
| > Is it? It's just plain old avarice. When someone comes
| to you and says, "give me a coffer full of money, I'll
| bring you ten coffers back, don't ask too many
| questions", you know you're gambling, don't need to be a
| genius to see that.
|
| That's not the situation however. The situation was "My
| relative that I trust and love, that has a successful
| career doing tech stuff, says this all is a good idea.
| Also I see people on all the big tv channels and major
| papers, including the WSJ, saying similar sounding
| things.
|
| Consider that someone in that age bracket might have
| entirely not selfish reasons, like wanting to leave the
| best inheritance possible. How are they supposed to know
| all these crypto folks are different from a simple
| diversified portfolio, when apparently the same experts
| are hawking both?
|
| You people still do not seem to understand the
| fundamental point: you see things from a vantage other
| people cannot, and it's insane to demand that every
| random member of society have this degree of
| sophistication about tech meets securities fraud, doubly
| so when major media outlets have been hyping this stuff
| for years uncritically.
| lordfrito wrote:
| I get it.
|
| I don't see the contagion spreading, unless some real
| crimes were also committed on the TradFi side of things.
| But unlike 2008, these crimes aren't institutional and will
| have real names attached to them.
|
| The worst I see is crypto dying a firey death, people go to
| jail, and a new generation of avg greedy folk learn the
| hard truths about get rich quick schemes. All well
| deserved.
|
| Frankly I'm relived to finally get this experiment behind
| us. The sooner it dies the better. The bigger it got the
| more avg folk that were going to get scammed.
|
| Meanwhile the rest of us go back to our daily lives trying
| to figure out where to invest wisely.
| WillPostForFood wrote:
| _Meanwhile the rest of us go back to our daily lives
| trying to figure out where to invest wisely._
|
| fine gold coins, r/wallstreetbets, lottery tickets, and
| shares in "art masterworks"
| lordfrito wrote:
| My point being that many of the people who were "bullish"
| on some of those ideas (r/wallstreetbets), are re-
| evaluating things right now in light of crypto implosion.
| That's a positive outcome for me.
| jagthebeetle wrote:
| Financial Times reported on Silvergate's disclosure of $8.1B in
| withdrawals [1], but curiously, don't mention a $100M seizure.
| Is this new / verified?
|
| [1]:
| https://www.ft.com/content/69cd8629-278d-4cd5-a3e7-96d2f6c85...
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