6 ms·

QuadrigaCX CEO allegedly traded millions in fake funds to fund luxury lifestyle

40 points by benmunster1 7y ago

endorphone 7y ago
"Margin trading is akin to gambling" It is no more akin to gambling than simple trading is akin to gambling. The only difference is that funds are also borrowed, which in this case means it was borrowed plus fraudulently obtained funds. And he was likely extra desperate, as most pyramid schemes usually are, taking extra risks because he really needed to make it whole again.
- CPLX 7y ago
  Margin trading in cryptocurrency makes casino gambling look positively responsible.
- Sahhaese 7y ago
  (high) Margin trading isn't just gambling, it's borrowing to gamble, which is a crazy idea. Gambling debt wasn't even enforcable in this country until recently because lending people money to gamble with is fundamentally wrong.
  - wickoff 7y ago
    There is no debt on good exchanges that offer crypto derivatives. Exchanges automatically close your positions when your margin balance nears zero. The best one - bitmex.com - has a 250 million insurance fund to cover the potential losses in case the price action becomes too volatile and there is not enough liquidity to close out everyone's positions in time. Everything is seamless for the user, they don't even need know how leverage works, it's no different from trading on any other exchange.
    - Sahhaese 7y ago
      You're right, in that situation you're not borrowing from others, you're borrowing from your own capital. That said, it is a little different, because without margin you can ride out any position, but with margin you get margin called (liq'd) at increasingly smaller deviations. Or in another view of it, it does the equivalent of turning low-return 1:1 odds into high return 100:1 odds which further attract problem gamblers. Watch the rekt bot for a while and tell me that there aren't a lot of problem gamblers on mex.
puranjay 7y ago
Crypto is filled with scammers and until these vultures are removed from the ecosystem, the field will remain a joke
- close04 7y ago
  Usually every new field sees its share of scammers until strong regulation is rolled out. But many people don’t want regulation associated with crypto which makes this a tougher nut to crack.
  - puranjay 7y ago
    Regulated crypto defeats the purpose of crypto in the first place. A regulated currency is just your actual fiat currency. But the system is filled with so many bad actors that I don't see any way out but regulation.
    - close04 7y ago
      Regulating securities didn’t turn them into fiat money so I’d say regulation isn’t incompatible with the intrinsic characteristics of crypto. And I’m sure a few tens (hundreds?) of thousands of users of QuadrigaCX’s users wouldn’t have too many qualms with regulated crypto right about now... Crypto is about decentralization and reliance on strong cryptography. There’s nothing in the definition that rejects regulation. It’s mostly people’s misconception that crypto is just a means to “fight the power”. And it’s not even the currency itself that has to be regulated, it the entities that want to deal with it, like your shady exchange that has no transparency or accountability. They didn’t play with financial instruments after all.
    - deleted 7y ago
      [deleted]
- Bakary 7y ago
  The deeper problem is that most people want to amass crypto and get rich from it, and only a minority want to actually use it as a currency or for some heartfelt ideological reason. As a corollary to that, you also have an army of people who are driven to madness because they didn't get to cash in, and seek to undermine crypto in the hopes of healing those gaping mental wounds. But it doesn't change the fact that the masses who drove the prices up wanted it to be a pyramid scheme in which they were the winners.
AMerrit 7y ago
This whole QuadrigaCX saga has certainly soured a lot of people on crypto here in Canada.
- dleslie 7y ago
  It was an awful exchange. I waited a month for Canadian funds to be transferred out and it never happened, eventually covered back to Bitcoin and now it sits in a wallet somewhere.

40 points by benmunster1 7y ago

"Margin trading is akin to gambling" It is no more akin to gambling than simple trading is akin to gambling. The only difference is that funds are also borrowed, which in this case means it was borrowed plus fraudulently obtained funds. And he was likely extra desperate, as most pyramid schemes usually are, taking extra risks because he really needed to make it whole again.

CPLX 7y ago
Margin trading in cryptocurrency makes casino gambling look positively responsible.
Sahhaese 7y ago
(high) Margin trading isn't just gambling, it's borrowing to gamble, which is a crazy idea. Gambling debt wasn't even enforcable in this country until recently because lending people money to gamble with is fundamentally wrong.
- wickoff 7y ago
  There is no debt on good exchanges that offer crypto derivatives. Exchanges automatically close your positions when your margin balance nears zero. The best one - bitmex.com - has a 250 million insurance fund to cover the potential losses in case the price action becomes too volatile and there is not enough liquidity to close out everyone's positions in time. Everything is seamless for the user, they don't even need know how leverage works, it's no different from trading on any other exchange.
  - Sahhaese 7y ago
    You're right, in that situation you're not borrowing from others, you're borrowing from your own capital. That said, it is a little different, because without margin you can ride out any position, but with margin you get margin called (liq'd) at increasingly smaller deviations. Or in another view of it, it does the equivalent of turning low-return 1:1 odds into high return 100:1 odds which further attract problem gamblers. Watch the rekt bot for a while and tell me that there aren't a lot of problem gamblers on mex.

puranjay 7y ago

Crypto is filled with scammers and until these vultures are removed from the ecosystem, the field will remain a joke

close04 7y ago
Usually every new field sees its share of scammers until strong regulation is rolled out. But many people don’t want regulation associated with crypto which makes this a tougher nut to crack.
- puranjay 7y ago
  Regulated crypto defeats the purpose of crypto in the first place. A regulated currency is just your actual fiat currency. But the system is filled with so many bad actors that I don't see any way out but regulation.
  - close04 7y ago
    Regulating securities didn’t turn them into fiat money so I’d say regulation isn’t incompatible with the intrinsic characteristics of crypto. And I’m sure a few tens (hundreds?) of thousands of users of QuadrigaCX’s users wouldn’t have too many qualms with regulated crypto right about now... Crypto is about decentralization and reliance on strong cryptography. There’s nothing in the definition that rejects regulation. It’s mostly people’s misconception that crypto is just a means to “fight the power”. And it’s not even the currency itself that has to be regulated, it the entities that want to deal with it, like your shady exchange that has no transparency or accountability. They didn’t play with financial instruments after all.
  - deleted 7y ago
    [deleted]
Bakary 7y ago
The deeper problem is that most people want to amass crypto and get rich from it, and only a minority want to actually use it as a currency or for some heartfelt ideological reason. As a corollary to that, you also have an army of people who are driven to madness because they didn't get to cash in, and seek to undermine crypto in the hopes of healing those gaping mental wounds. But it doesn't change the fact that the masses who drove the prices up wanted it to be a pyramid scheme in which they were the winners.

AMerrit 7y ago

This whole QuadrigaCX saga has certainly soured a lot of people on crypto here in Canada.

dleslie 7y ago
It was an awful exchange. I waited a month for Canadian funds to be transferred out and it never happened, eventually covered back to Bitcoin and now it sits in a wallet somewhere.