This is a story of a corrupt CEO. The main crypto part of it is that FTT was seen as actual money on its balance sheets.
This individual stealing people's money sheds light on how regulations exist for a reason, especially when handling billions of USD. Doesn't really speak positively or poorly on cryptocurrency as a technology though.
> This is a story of a corrupt CEO. The main crypto part of it is that FTT was seen as actual money on its balance sheets.
The main crypto part is that it's the person who dictated the upcoming crypto exchange legislation.
That corrupt CEO was greasing politicians (to the tune of $40m), was using an ex-CFTC commissioner to lobby a law regulating exchanges (which, by chance, would have made FTX legal and Binance and decentralized exchanges illegal) --ex-CFTC commissioner who just deleted his Twitter account by the way--, had nomimated has CEO of his Alameda Research fund the daughter of a colleague of the SEC's chair, etc.
Here what a US congressman has to say about the SEC's chair:
Interesting. @GaryGensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We're looking into this.
Interesting indeed.
There's much more to this story than: "we fucked up using leverage so we used a shitcoin of our creation as collateral to hide billions in losses".
We're potentially talking about a little cabal trying to regulatory capture the cryptocurrency exchange market very likely with the intent to run an ever bigger scam.
THE big argument in favor of cryptocurrency as a concept was that it freed people to store and transact value without interference or oversight by governments and institutions.
A big argument against cryptocurrency was that those governments and institutions had developed financial oversight for a reason.
There’s a weird false equivalence here. Whenever critics hear government oversight and interference, they immediately point to the governments that manage their currency relatively well and say “look, these governments do therefore no one needs to worry”.
History and contemporary geopolitics are both littered with examples of governments that absolutely ruin their population’s lives with currency problems. What if it were possible to have consumer protection regulation and also remove some of the nasty side effects of government and institutional preference in monetary policy?
And this is the idea behind crypto in a nutshell: "Some governments have been financially irresponsible in the past, so we need a tool to allow us to bypass all government regulations."
However, the rest of us have a name for "bypassing government regulations" - we call it "crime".
> What if it were possible to have consumer protection regulation and also remove some of the nasty side effects of government and institutional preference in monetary policy?
> However, the rest of us have a name for "bypassing government regulations" - we call it "crime".
I don’t think that’s what we call crime. Isn’t crime the direct violation of government regulations?
By your argument, the use of _any_ currency other than your own government’s would be a crime. Or, is the use of every currency a crime in every other country? When I exchange Euros for JPY in the US, have I committed a crime?
As far as I’m aware, there are no laws against the use of cryptocurrency. There are plenty of laws against things like securities fraud and fraud in general, and those are all generally well and good.
> Some governments have been financially irresponsible in the past, so we need a tool to allow us to bypass all government regulations
I think you should probably gain a clearer understanding of how the currency markets have been behaving over the last year. Many currencies have lost >30% of their value against the USD (which might not matter so much if the USD were the same status as the others).
Congratulations! You have managed to both post the same argument they just refuted ("some governments in the past were bad, therefore we need to be able to avoid all governments forever"), and invoke Godwin's Law at the same time!
FTX did not allow people to “store and transact value without interference”. It was an institution which held user funds. All FTX users who transferred the crypto they bought out to their own wallets were unaffected by this scam. It was the people who’s money was held in FTXs traditional bank accounts who were robbed.
It's basically digital cash but a whole hell of lot easier to move around in quantity. Whether that is use for good or ill is orthogonal. There are lots of people who see the direction most (all?) of the governments of the world are leaning in to fascism and control (or at least surveillance) of all areas of our lives because they think we're all children. It was a nice dream I suppose.
in a way crypto claimed you could have faith in "math" while in fact nothing should be trusted blindly, since we didn't write said "math", and regulations are one fairly known way to enforce a higher level of trust
Some of those regulations make sense when crypto or any other asset is being custodied by another firm. But with crypto it is possible to self custody. Unfortunately, not enough people do it. Most of FTX's clientele were high-risk perpetuals traders.
FTX had both a US and offshore location. US regulations do not apply to offshore entities.
SBF's parents are financial compliance lawyers and Standord professors. His dad has gone in front of Congress to argue for various tax and compliance regulations. What SBF did was criminal fraud, and he was equipped with world class compliance advice and yet here we are. A brazen theft of billions of dollars by a risk-addicted, self-delusional altruist.
> Doesn't really speak positively or poorly on cryptocurrency as a technology though.
Technology doesn't exist in a vacuum though, and the fact that so much of the ecosystem that sprung up around crypto is rotten is a hint that maybe the technology isn't all that useful. Crypto's nominal reason to exist is to have a way to transact without government oversight, but its popularity is due mostly to speculation and outright scams enabled by said lack of oversight.
BTC and ETH have held support considerably well through this. I think SBF backed shitcoins like SOL are probably in for a world of hurt. But overall, I don’t think these events do much damage to crypto in the long run.
It speaks to the fact that in the absence of regulation, you get exactly what happened repeatedly in Eve Online -- people eventually get bored and/or things get tough, and then they decide it's easier to steal money.
Banking regulations exist to counterbalance the personal incentive to abuse any authority you have and take off which what you can take.
In the absence of regulations, everyone does exactly that... eventually.
Of course. Point is that regulatory oversight FEC/whatever would have likely seen issues with the books, and a definitely issue with that the CEO could just take all the moneys.
You’re setting yourself up for disappointment with that one. You just send them reporting forms, and then you get nailed for false entries after the fact.
Funny how, despite crypto bros' endless blather about freedom, people still willingly turn to centralized institutions with their crypto
It seems they are learning the same lesson as the OG computer nerd power users: nontechnical people suck and they ruin everything for everyone. Making crypto easy-to-use was the beginning of its downfall.
> nontechnical people suck and they ruin everything for everyone.
This is a naive conclusion to reach. "Non-technical" people are very much the reason that those who transact strictly in digital products and services can survive, not the other way around.
Centralized institutions exist because the establishment of trust is essential to even the most basic of human societies. Yes, they can be abused to corrupt ends, but crypto clearly has the same problems, with the malfeasance often committed by "technical people" themselves.
I'm not so sure about that. Many products and services existed and can exist on smaller scale, and maybe that is the way things should stay. "The cloud" and all its numerous and vast expenses has inserted itself in our culture as "indispensable", but for many things operational costs can be dramatically lower if the user can be trusted to self-host and self-operate, as things once were.
Yes the world would look dramatically different, it'd be more IRC/P2P than Slack/Youtube. But it would be a much better world where users are in control, and can do advanced things after skilling up in the appropriate area. I think that what is happening with Mastodon is a good example of what happens when the mainstream gets its hands on something that maybe it should learn about first.
And the thing is, anyone can become technical. They just need to cross that knowledge barrier to entry. But our society, in all its dysfunctional ineptitude, has decided that this is "inaccessible," and that is evil because everyone should be able to fuck up everything at every time. Yet somehow the guilds of doctors and lawyers and engineers (and drivers of cars!) carry on.
I am glad that most of HN had called this crypto/NFT/web3.0/ICO BS loong time ago. That contrasts with Mega VCs, celebrities, politicians etc who were praising this tech-glorified Ponzi scheme.
Yet every example you gave was over 10 years ago and there has been regulation enacted to prevent that kind of exploit. Meanwhile every week some crypto scam blows losing some people billions, hundreds of millions or just tens if it's a good week.
The crypto market blowups pale in comparison to even dotcom era exuberance, and the recovery from bear market conditions has been much more rapid (usually less than 3 years to recover to previous levels). Crypto rebuilds quicker, and grows more resilient with every passing year.
On-chain exchanges like Uniswap can't be hacked, can't misrepresent funds or exchange rates, and are fully open source. This is the future we're working towards. Not centralized scam operations like FTX.
Far more times? Haha. No… crypto space did a speed run of 150years of traditional finance in under a decade. For every one example you have in traditional finance, there’s 10 more in cryptocurrencies
Things blow up quicker in crypto because it's transparent and people can withdraw billions of dollars from an exchange in a single afternoon (not possible in a trad fi bank). Tradfi has had 1000x more financial scandals than crypto. You are woefully ignorant on the subject and the scale of the crises is worse in tradfi. From Railroad Panics to Prohibition to Great Depression to Savings & Loan Crisis to the Tequila Crisis to Weimar Republic to Stagflation to Enron / Worldcom to Dotcom Bubble to Japanese Lost Decade to Great Financial Crisis to the current bubble to on and on and on. Read a history book.
Here we have crypto golden child SBF worth billions of dollars. He literally never had to do anything for the rest of his life. Even if he lost billions on Alameda and/or fTX he'd still be completely fine. Instead, he seemingly stole FTX customer assets in a failed attempt to save Alameda, run by his girlfriend.
The upside here was what? More money? How much money do you need? Or is it not about the money but rather he simply values how he's perceived? So instead he's going to be a John McAfee like figure or spend a significant chunk (if not the entirety) of the rest of his life in prison because this will absolutely end in US criminal prosection.
As an aside, crypto-skeptics such as myself will point out using an exchange like this still requires trust (like TradFi). DeFi Andys will say DeFi doesn't. Crypto Andys will still argue crypto's imagined benefits but one of those "benefits" is the irreversibility of transactions, which means in cases like this where assets are stolen, backdoored, hacked (I'm being generous) or whatever, you have no recourse to get them back.
> Here we have crypto golden child SBF worth billions of dollars. He literally never had to do anything for the rest of his life. Even if he lost billions on Alameda and/or fTX he'd still be completely fine. Instead, he seemingly stole FTX customer assets in a failed attempt to save Alameda, run by his girlfriend.
You can see that the same drivers and personality traits that allow a person to succeed at such an enterprise are the same ones which would lead a person to fail at such an enterprise.
Is it possible to run a crypto exchange 'honestly'?
Ie. Actually holding all the assets you claim to hold?
I suspect the answer might be no... If you were to set up an honest exchange today, you would be outcompeted by dishonest exchanges who spend all their customer deposits on marketing schemes, referral bonuses, liquidity incentives, etc.
Yes but the problem is that in these heavily regulated sectors it is impossible to build a startup organically. If there were carveouts for startups with low quantities per customer and low total volume then we would have seen a lot more regulated exchanges. Also, existing banks or exchanges must provide white label services to those startups because if there are only two companies that can comply with the regulations, then those must act as regulated utilities.
There is no doubt that the executive team at FTX should be investigated and pay for what they have done to their users, but let me tell you one thing, they did not force you lazy greedy humans to put a dime into FTX without reading what is an exchange and why everything you have inside there is not yours.
Given this, the fact that some of you believe that this is a flaw in blockchain technology worries me because: either you just hate (stupid position, it's like hating toasters) and you're taking pleasure in other people's misery or you really don't know what blockchain is and you don't understand the value it can add.
The saddest? That tomorrow another Ivy League graduate with trouble understanding a Ponzi scheme will go to a VC and be given millions to create nothing.
Your attitude toward your fellow humans isn't so good, and comes out in each line of what you write. Maybe you should rethink your contempt for humanity? You don't see very happy.
> they did not force you lazy greedy humans
No, if a CEO lies and commits fraud to steal from investors, it is the CEO's moral and ethical fault.
> the fact that some of you believe that this is a flaw in blockchain technology worries me
All of blockchain technology is "a flaw". And thousands of lines of my C++ are in one of the top five blockchains, so it isn't ignorance on my part to say this.
So far, no application of the blockchain has appeared that isn't cryptocurrencies. The consensus phase is wildly expensive, and yet not at all useful for anything else. And cryptocurrencies are almost as old as the smartphone, and yet the only applications so far are "evading government regulations" (what most people call "crime") and wild, unsupported speculation.
Don't get me wrong. Strong cryptography is great. Digital signatures are great. Merkle trees are great. Just not the blockchain.
I'll pass the personal stuff, I hope you realize you're calling another human unhappy when you're saying I have a bad attitude towards others. Interesting at least.
So in your opinion (correct me if I've misunderstood), having a tool that decentralizes power isn't worth the energy it consumes? Is that why you call it "flawed technology"? With infinite clean energy, would you agree that this is actually a good idea or not?
There’s also the matter of the hacked funds last night, and the juicy theory that SBF used his back door to steal even more cash. You can’t make it up!
To the ones who are saying this is a failure of crypto currencies.
FTX was a regulated exchange, so your alternative to crypto currencies is then broken as well, the regulators didn't then do their job, this scammer Sam Bankman-Fried was allowed to create fake money out of thin air and the regulators were not able to stop them.
If you can't follow the mantra "not your keys not your crypto currencies" or if you don't have the technical ability to hold your own keys then don't take part in it.
You let someone else hold your crypto currencies, don't take the time to check if the said people holding your money has any validity and then you lose all your money? it unfortunately is your fault for trusting a scammer, you got duped by a scammer, just because someone can run a Superbowl advert, get main stream media to call them an amazing vegan who's such an amazing role models to us all, or hire a few celebrities to say good about their company doesn't make them someone you can trust.
Crypto currencies and block-chains are still a very young and developing industry, its risky, there are thieves like Sam Bankman-Fried and then there are politicians and other special interest groups who will get in to bed with these scammers and try to take your hard earned money from you. Don't be a victim to this kind of scum.
Crypto currencies and blockchains are here to stay.
> You let someone else hold your crypto currencies, don't take the time to check if the said people holding your money has any validity and then you lose all your money? it unfortunately is your fault for trusting a scammer
Sequoia and their team of analysts, lawyers, etc did not see anything wrong with FTX. You expect individual investors to be able to research and see something wrong?
Well goes to show Sam Bankman-Fried was a world class con-man, or Sequoia and their team of analysts, lawyers, etc are no better than the folks who fall for scammers and con men then.
In a lot of crypto currency circles people were questioning FTX, many warned about leverage.
* There can only be 21 million btc.
* If someone says you can leverage BTC they are selling you
something that probably doesn't exist.
* If you don't hold your own BTC you don't own any BTC.
take away retail and these coins will have much much less demand which deflates the whole bubble. so you keys-coins people need all the clueless civilians, it seems to me. it's their desperate speculating that make you wealthy.
It's an alternative system that helps people store value.
>>take away retail and these coins will have much much less demand
I was talking about people who don't do due diligence and get caught in scams. Are you implying that retails is somehow the only ones that get duped by scammers like Sam Bankman-Fried ? There's plenty of people in retail who have done better than some so called institutions both in the crypto currency markets and the stock market.
Plenty of people in the crypto currency space were not so quick to trust that conman Sam Bankman-Fried. Many were even warning about him.
p.s Not everyone wants to take part in crypto currency markets to get rich fast. There's plenty of legit reasons for people to be in these markets. Its the get rich quick crowd, the scammers like Sam Bankman-Fried and the folk sitting in the sidelines critiquing it without offering a better valid alternative who are actually the problem.
institutions dont lose at the same rate that even smart retail traders do, its a cold fact.
the idea that crypto exists for reasons significantly other than speculation seems hopeful in the extreme given all the overwhelming evidence. maybe someday!
It's tempting to say he did it or inside job, but things never are as obvious as they seem. Why not just quietly siphon off funds from a cold wallet to his personal wallet? Why use a malicious app at all? This leads me to believe it was not an inside job.
> It's tempting to say he did it or inside job, but things never are as obvious as they seem.
Then again, sometimes the kid standing in the kitchen with the chocolate on his face and his hands behind his back looking guilty actually did steal the cookies from the cookie jar...
I have no opinion on the inside job, but if someone were to drain the funds I'd expect it to be more deniably than directly transferring to one's own wallet.
it would be impossible to know whose wallet it belongs to. He could just make a transfer to an address in which he controls the key and then many years later access it once safe in Dubai or wherever.
Does anyone know what these $2Billion, $10bb, etc actual are? Is that in crypto coins? Dollars? I assume it's not stocks/bonds since those can be easily traced.
The irony is that the guy didn't even plain steal and embezzle it, he was so full of himself he thought he could just increase it with his magic trading firm.
Regulation can help detect fraud, it might discourage fraud, but it can't prevent it. MF Global, Enron, Maddoff, etc. How long did Maddoff run his little scheme before being caught?
This has been some of the funniest few days in recent memory. Even my crypto true-believer HODL maximalist friends are questioning the entire ecosystem and its value.
I think it’s funny that so many people have been hypnotized by get-rich-quick schemes and promises of a utopian monetary system while forgetting what the original —actual— value proposition of crypto was: Buying heroin.
As a corollary to “not your keys not your coins” I submit “if you can’t confidently exchange it for illegal drugs, it’s not a currency”
The value proposition was uncensorability, irreversibility, non-inflationary nature, and permissionless nature.
It's a tool that can be used for good or evil, just like the personal automobile, which was also abused in early years for malicious ends - just as telephony, the internet, and a number of other technologies were.
Criminals are early adopters of new & emerging technologies, that doesn't make those technologies inherently evil.
Also, why lump drug transactions in with weapons / CSAM / cc fraud / assassinations? Most drug buyers are not hurting anyone.
> Also, why lump drug transactions in with weapons / CSAM / cc fraud / assassinations? Most drug buyers are not hurting anyone.
The marketplace for all of the above (except assassination) was the same - Silk Road. I remember seeing different sections for weapons, credit cards, fake ids and drugs, but I don't remember seeing a section for CSAM unless it was masquerading as something else.
That's a fair point. But what was on that platform was there because it was illegal, not necessarily immoral (drugs for responsible, personal consumption). I am simply contesting the use of drug transactions (especially small ones for personal use) as an example of an undesirable use case of a new technology.
The drug trade is definitely culpable for violence and human misery. Unless you're perhaps talking exclusively about psychedelics (and even that isn't squeaky clean, but production and distribution is less violent due to the origin and effort required in distribution), the users while not directly responsible, are absolutely funding some grotesque stuff behind the scenes that they usually brush under the rug.
None of this means that the war on drugs etc was justified or that its implementation did not have serious flaws, just that the drug trade isn't a manufacturer of purely victimless crimes.
> The value proposition was uncensorability, irreversibility, non-inflationary nature, and permissionless nature.
This boils down to two things, really: 1. To skirt the law (aka regulatory arbitrage) and 2. Act as a techno-libertarian “sound money” experiment.
Ghost guns can be used for good. But it’d be pretty silly to suggest that criminals use them because they’re early adopters. Criminals use them because they’re criminals. Sometimes the laws they’re breaking are unjust—but these are just tools for breaking the law.
And just because you can use crypto to buy things legally, there’s virtually no reason to do so, like taking a ghost gun to your local firing range.
I'd disagree on your first point. A critical component of systems that should skirt the law would be untraceability. A cryptocurrency like Monero or Zcash has this property (or attempts to, at least), and they are much stronger candidates for that use case.
Uncensorability is a desireable property for legal adult content producers, who are locked out of many payment platforms despite operating entirely within the law.
Irreversibility is a desireable property for merchants, who are the ones left holding the back when chargeback fraud occurs.
Permissionless nature is a desireable property for those at risk of discrimination from traditional financial institutions. While rare in the developed world for law-abiding customers, there are plenty of countries where people of certain races, religions, and ethnic groups are denied access to financial resources like a bank account because of such factors.
While these traits may be attractive to criminals, especially ransomware authors, they aren't only attractive to criminals, and all of them find demand in law-abiding users, as detailed above.
Why would this make someone question crypto? FTX was not a blockchain. It was a website run by one guy which (incorrectly) told you that he was holding some crypto for you. FTX could have been an exchange for anything, and it would have been the same outcome, had the CEO gambled with customer deposits like SBF did
Because “believing in crypto” (for most people) doesn’t just mean believing that the math works. It means believing that we can build a sociopolitical ecosystem that allows crypto to be a useful part of our lives in the future. To many, SBF seemed like an important visionary working to make that future happen. The fact that he turned out to be YET ANOTHER scumbag scam artist, fraudulently trading customer deposits like all the rest, will incinerate any goodwill the crypto community was starting to build in the eyes of regulators, politicians and the non-tech-world at large.
But also, it's predicting human behaviour, like a trader attempting to get in front of the trade flood. There's going to be pain as a result of further dominoes falling that were propped up against FTX, and this will result in a shark-like media feeding frenzy that will scare off, for years, any (potential) retail traders that weren't already in the game.
You're not wrong, it's just that humans are more emotion driven than logic driven. Logic requires effort and second-order thinking, emotion is passive; involuntary.
There's also the very real distinction between Bitcoin (and Ethereum) and "the rest"; the other fucking thousands of 'projects' that has VC / insider distributions and haven't had the time to decentralise and / spread themselves amongst a large group and still have the ability to be controlled by a central entity.
I'm no Bitcoin maxi, but I'm inching closer, which is not the direction that progress should be taking me, and it's due to fraudsters corrupting the ideals, and seemingly being in The majority as it relates to founding projects and services in the cryptocurrency space.
Because there's crypto, and then there's "crypto".
While FTX & co. don't match the technical blockchain-based definition of crypto, they are what people think of when they talk about the crypto ecosystem, and are part of the crypto hype chain.
If we filter the crypto market to only the true not-my-keys-not-my-coin crowd, the market wouldn't be anywhere near as large and influential as it is today.
I don’t know, I am not into crypto. I assume you might have to ask one of the many thousands of people that have lost untold quantities of money to a nearly infinite number of scams why they might question the practical value of the crypto ecosystem.
Even funnier is the fact that people don't buy heroin using Bitcoin on the darknet anymore, bitcoin's transaction fees are now too high for the average drug user.
In 2012 I found out about Bitcoin (founded 2009) and Ripplepay (founded 2004). I thought the former could go up in value a lot but I liked the latter much more as an actual peer to peer payment system.
Here is one of my posts from that time.. looking back on it , I encouraged Bitcoin as an investment back then, but cautioned at the end of my blog post about its prospects as a currency:
https://magarshak.com/blog/?p=148
My cofounder tried to get me heavily into building on crypto and smart contracts since 2014. I told him I was already building a decentralized network since 2011 (qbix.com) and so stop pestering me.
Eventually, I looked at the space and saw many problems. Including lack of real adoption as a currency. So in late 2017 we started Intercoin.org to solve them… and followed all the regulations. As a result we raised “only” $555K, filed a Reg D with the SEC, etc.
Crypto and Web3 Smart Contracts have so much potential to do to world finance what the Web 1.0 did to publishing and Web 2.0 did to communities socializing online. It has the power to enable decision making and governance and tokens and contests and much more. But first it has to grow up. NFTs and Memecoins are first-generation crap, like <blink> and <marquee> tags, and myspace profiles, or Pong / Arkanoid.
In the same time that Bitcoin and crypto has existed, WeChat has rolled out a payment system that has the most mainstream adoption of any on the planet - millions of merchants in China. Here is what a decentralized version of that would look like:
We aren’t the only ones. FileCoin is working on the FVM and MaidSAFE is next-generation. The Web 3.0 world has been corrupted by centralized privately owned entities, just like the Web 2.0 world. Some of them were actually funded by YC and the VC industry, such as OpenSea. In a world where Elon owns Twitter and Zuck owns Facebook, people are looking for viable alternatives.
I know there are inherent issues like high energy consumption in the technology. But I believe that blockchain and the decentralization has some value to it. For example where I'm coming from, I can't accept payments via PayPal, it's nothing to do with PayPal but our government is not pushing to meet the requirements to get PayPal to our country.
Also we can't hold USD due to government regulations, if we get the transfers via a bank, so every USD is converted to local currency which is getting devalued faster than USD.
Therefore for people like us the easiest way to get money is via the blockchain.
I think the problem is not with the technology but with people who used it to get rich quick by running these Ponzi schemes and used the technology to create things that doesn't improve the way we transfer wealth but instead used to invent NFTs which is again a get rich quick scheme.
I hope this does not mean the end of blockchain and crypto as a technology, but just as the bursting of the dot-com bubble, we will see some good companies and ideas emerging out of this crisis.
> people who used it to get rich quick by running these Ponzi schemes
The problem with any new currency is that unless an entire government forces it on people, there's no real reason for anyone to use it. Think about it: what use is a currency that no bank will store, no business will accept as payment, and nobody else has ever heard of?
There needs to be some incentive to "get the ball rolling". Bitcoin relied on using an artificially imposed cap on the total coins to force the currency to be deflationary, rewarding early adopters. The earlier you get it, and the more you commit, the more you are rewarded. This gets things moving, hopefully to the point where it becomes a real currency.
The hiccup with this is that it turns any currency utilising this mechanism into a giant Ponzi scheme. It's a inherent trait of deflationary currencies, and no amount of arguing will ever make that not be true. Rewarding the early adopters with the cash deposited by later adopters is the point! It's not some accidental side-effect that can be swept under the rug. It's also the literal textbook definition of a Ponzi scheme.
Other people saw that there was $$$ to be made, so this concept has been copied into virtually all cryptocurrencies. What would be the point of some SV startup of 10 pimply kids making a currency that didn't reward early adopters? Nobody would give a shit, not even their own friends and relatives. But if there's that sweet early-adopter profits to be made? Suddenly billionaires will dump a few million in and profit.
This is just the nature of the entire ecosystem now, and arguments against are either hopeless naive, or a waste of everyone's time.
The only way crypto can ever be legitimised is not "organically", like it is now, but by the actions of large organisations. If a bunch of banks got together to make "Terran Credits" based on a blockchain, without the deflationary aspect, that would work, perhaps used for centuries... but nobody could "get rich quick" off it, so it wouldn't be an exciting web 3.0 opportunity. It would just be... money.
Oh, and of course, the corollary is that if big banks or some governments got together to make "Earth Bux" or whatever, you can bet it would have all the same rules and restrictions around it that there are now around holding gold, USD, or whatever.
Wherever you are, the government will continue to impose their will upon you, one way or another.
> what use is a currency that no bank will store, no business will accept as payment, and nobody else has ever heard of
Apart from not stored at a traditional "bank" I think most popular cryptocurrencies have the other 2 aspects. I know it's not accepted by amazon but there are some stores that accept payments.
I think the exchanges act as the "banks" and, I maybe wrong, therefore should be regulated like banks and not the blockchain and the associated technologies because you don't need an exchange to store the currency, you can use your personal wallet or cold storage to store the money.
But on the other hand you can always convert them to standard currency when you need it, so that is not an issue. I just want to have a way to send money across borders without censorship (and not for any criminal activities) because my government and PayPal and banks are not allowing it.
RAI is basically a cryptocurrency where the central bank has been replaced with a smart contract.
It doesn't take off like other cryptocurrencies into a billion dollar market cap, it is sitting below 50 million. It has extremely low volatility. You can't make much money off something that doesn't go up or down constantly.
> For example where I'm coming from, I can't accept payments via PayPal,
Your argument is this: "Some government regulations from some governments are wrong, so we need a tool that will let us bypass all government regulations from all governments."
> Therefore for people like us the easiest way to get money is via the blockchain.
I am truly sorry that you live under an incompetent government, but instead of breaking the rest of the world's financial laws, it would be better for absolutely everyone if you simply fixed YOUR country.
Literally trillions of dollars are stolen from we the people by money laundering and tax evasion already.
I think the far simpler root cause of all this is amphetamine abuse. A prolonged state of sleep shortening (he openly talks of using amphetamines and sleeping pills in a tweet from a year ago) and mania causes psychosis.
It's likely that Sam genuinely believed his own deceptions that he created earlier to grift and the amphetamine have eroded his capacity to manage risks such as committing multiple felonies that no other CEO would dare because of its obvious consequences such as spending the rest of your life behind a prison.
I've heard a few legal experts and their take was : Sam & Caroline are going to spend the rest of their lives locked up. The reality still hasn't sunk in yet seeing Sam's wild apology that destroyed his last possible defense of alleging incompetence (he's depiction of himself as a bad coder that caused the situation) with a weird insistence that what he tweeted is not admission.
That seems unlikely - this is too blatant and, as we saw with Madoff, mismanaging your clients money tends to be taken more seriously than some other white-collar crimes.
Crypto has a strong reputation as a haven for money laundering, drug sales... So if any of the Mexican/South American drug cartels lost a lot of money Sam and the other top management of those companies could end up dead.
I can't speak to the plausibility of this actually happening here specifically, but usually it is done to set an example for future folk who might try some funny business.
To encourage their other money launderers to stay in line. Criminals can’t rely on things like contracts since they can’t take someone to court so one way to prevent cheating is the threat of violence against the person or their family.
In this case, I’d bet that he’s safe if he ends up in federal custody since being in prison is also effective punishment from this perspective. If not, it’s easy to imagine something happening to him if he tries to hide somewhere since the message “you can’t run far enough” will heard by everyone in that world.
This individual stealing people's money sheds light on how regulations exist for a reason, especially when handling billions of USD. Doesn't really speak positively or poorly on cryptocurrency as a technology though.