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Question: Who was the dumper in this pump-and-dump game? Tether was clearly the pumper. Second: The claim that the they are liable for the damages of the los

Question: Who was the dumper in this pump-and-dump game? Tether was clearly the pumper. Second: The claim that the they are liable for the damages of the loss from the peak is a bit weird. IF it was a pump and dump scheme, and I at least agree with the pump side of things, then the values were all inflated falsely anyhow. There should be punishment, but basing it on the losses from peak is very strange and not realistic.

philipov 7y ago
Basing it on the peak means they get punished in proportion to how much they pumped it, which makes sense to me. The drawdown/damage they caused includes both the dump and the pump.
- saalweachter 7y ago
  I think where it loses me is that they are basing it on the nominal "market capitalization" of cryptocurrencies, which as is usually brought up on HN, are sketchy as hell. I'm not sure what a better way to compute the "volume" of the manipulation would be, however.
SI_Rob 7y ago
> There should be punishment, but basing it on the losses from peak is very strange and not realistic. Isn't this the usual protocol for damage suits in general? As I understand it, plaintiffs should plan for a 10x or even 100x reduction in damages awarded even under ideal suit outcomes, so you put as big a number on the table as possible (as big as can plausibly be derived from discovered metrics), as it is likely to be decimated anyway.
nostrademons 7y ago
Largely long-time Bitcoin holders and smart ICOs. Anyone who's a real (not paper) Bitcoin millionaire probably got that way by selling near the peak. Ditto anyone whose salary has been paid by a crypto firm that collected millions in an ICO. Most of the engineers working for companies like Consensys, Brave, Filecoin/IPFS, etc. are indirect beneficiaries of the 2017 Bitcoin bubble. The ICO boom had an interesting triple-pyramid-scheme structure that accelerated both the rise and the fall. If you bought into Ethereum in the early days, you probably paid with Bitcoin; it wasn't possible to buy ETH direct until ~2017. And similarly, if you bought into ICOs in 2017, you bought with ETH. That meant that the folks investing their money in ICOs weren't actually putting $200M into Filecoin; they were putting ETH that they had spent maybe $20M (in aggregate) in, which was likely purchased from someone who had bought it with $2M in Bitcoin. The eye-popping ICO valuations attracted more people into the market, which allowed smart ICOs to unload their ETH immediately at inflated prices and convert it into a big corporate war chest. Once the bubble popped, this mechanism worked in reverse (a bunch of dumb ICOs that had held onto their ETH all try to sell to capture the tiny pool of inflowing capital, which does nothing except force down the price of ETH), leaving folks who bought at the top of the bubble and ICOs that forgot to sell holding the bag. Ironically, this mechanism holds the basics of a functioning financial system: money was transferred from people who weren't doing anything with it to pay salaries of people doing productive but speculative work. It was transferred pretty clumsily, with a lot of people losing their shirt and a fair bit of waste and scams in the receiving projects, but if any of the receiving projects deliver, it succeeded.
- SI_Rob 7y ago
  > it wasn't possible to buy ETH direct until ~2017 not even with paper wallets? I realize this would be uncommon given the late start of, ahem, intheoreum, but this should have still been common at meetups and such. Also, mining is essentially paying for ETH with only one layer of indirection, but without passing through Bitcoin.
  - nostrademons 7y ago
    If you're doing a localbitcoins-style swap, sure. Nothing stops you from finding someone you want to trade with, sending crypto to their wallet address, and receiving cash in hand. Well, other than finding a counterparty to make the transaction. ETH didn't really get listed on exchanges that also handled fiat currency until around 2016, though.
- scg 7y ago
  > it wasn't possible to buy ETH direct until ~2017 Coinbase added ETH support in 2016: https://blog.coinbase.com/coinbase-adds-support-for-ethereum-b8046cf486d0 https://blog.coinbase.com/coinbase-adds-support-for-ethereum...
  - nostrademons 7y ago
    I stand corrected.
ceejayoz 7y ago
Tether can be both pumper and dumper. Pump up BTC price with Tether. Use Tether to buy BTC. Sell BTC for USD (or hold onto it - it's free!). Doesn't matter that the Tether either never actually existed or were seized by governments.
- semiotagonal 7y ago
  The pumper and the dumper are generally the same entity in any pump and dump. Which mode that entity is in is a matter of timing.
lightedman 7y ago
"Question: Who was the dumper in this pump-and-dump game? Tether was clearly the pumper." Look at who holds the most crypto holdings AND has the ability to manipulate the market due to sheer size of operations. China. This isn't really a big secret, either. Anyone that can read/write/speak Mandarin knows about this. Just watch their crypto boards and you'll find the manipulation very, VERY easily. Answer solved.
- bhouston 7y ago
  Seriously? Is there any accessible write ups on this with proof? I think all internet-based stock boards contain scams and minor pump and dumps. I am sort of doubtful that any large scale pump and dumb would be coordinated out in the open, even if it was in Mandarin.
deleted 7y ago
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philipov 7y ago

Basing it on the peak means they get punished in proportion to how much they pumped it, which makes sense to me. The drawdown/damage they caused includes both the dump and the pump.

saalweachter 7y ago
I think where it loses me is that they are basing it on the nominal "market capitalization" of cryptocurrencies, which as is usually brought up on HN, are sketchy as hell. I'm not sure what a better way to compute the "volume" of the manipulation would be, however.

SI_Rob 7y ago

> There should be punishment, but basing it on the losses from peak is very strange and not realistic. Isn't this the usual protocol for damage suits in general? As I understand it, plaintiffs should plan for a 10x or even 100x reduction in damages awarded even under ideal suit outcomes, so you put as big a number on the table as possible (as big as can plausibly be derived from discovered metrics), as it is likely to be decimated anyway.

nostrademons 7y ago

Largely long-time Bitcoin holders and smart ICOs. Anyone who's a real (not paper) Bitcoin millionaire probably got that way by selling near the peak. Ditto anyone whose salary has been paid by a crypto firm that collected millions in an ICO. Most of the engineers working for companies like Consensys, Brave, Filecoin/IPFS, etc. are indirect beneficiaries of the 2017 Bitcoin bubble. The ICO boom had an interesting triple-pyramid-scheme structure that accelerated both the rise and the fall. If you bought into Ethereum in the early days, you probably paid with Bitcoin; it wasn't possible to buy ETH direct until ~2017. And similarly, if you bought into ICOs in 2017, you bought with ETH. That meant that the folks investing their money in ICOs weren't actually putting $200M into Filecoin; they were putting ETH that they had spent maybe $20M (in aggregate) in, which was likely purchased from someone who had bought it with $2M in Bitcoin. The eye-popping ICO valuations attracted more people into the market, which allowed smart ICOs to unload their ETH immediately at inflated prices and convert it into a big corporate war chest. Once the bubble popped, this mechanism worked in reverse (a bunch of dumb ICOs that had held onto their ETH all try to sell to capture the tiny pool of inflowing capital, which does nothing except force down the price of ETH), leaving folks who bought at the top of the bubble and ICOs that forgot to sell holding the bag. Ironically, this mechanism holds the basics of a functioning financial system: money was transferred from people who weren't doing anything with it to pay salaries of people doing productive but speculative work. It was transferred pretty clumsily, with a lot of people losing their shirt and a fair bit of waste and scams in the receiving projects, but if any of the receiving projects deliver, it succeeded.

SI_Rob 7y ago
> it wasn't possible to buy ETH direct until ~2017 not even with paper wallets? I realize this would be uncommon given the late start of, ahem, intheoreum, but this should have still been common at meetups and such. Also, mining is essentially paying for ETH with only one layer of indirection, but without passing through Bitcoin.
- nostrademons 7y ago
  If you're doing a localbitcoins-style swap, sure. Nothing stops you from finding someone you want to trade with, sending crypto to their wallet address, and receiving cash in hand. Well, other than finding a counterparty to make the transaction. ETH didn't really get listed on exchanges that also handled fiat currency until around 2016, though.
scg 7y ago
> it wasn't possible to buy ETH direct until ~2017 Coinbase added ETH support in 2016: https://blog.coinbase.com/coinbase-adds-support-for-ethereum-b8046cf486d0 https://blog.coinbase.com/coinbase-adds-support-for-ethereum...
- nostrademons 7y ago
  I stand corrected.

ceejayoz 7y ago

Tether can be both pumper and dumper. Pump up BTC price with Tether. Use Tether to buy BTC. Sell BTC for USD (or hold onto it - it's free!). Doesn't matter that the Tether either never actually existed or were seized by governments.

semiotagonal 7y ago
The pumper and the dumper are generally the same entity in any pump and dump. Which mode that entity is in is a matter of timing.

lightedman 7y ago

"Question: Who was the dumper in this pump-and-dump game? Tether was clearly the pumper." Look at who holds the most crypto holdings AND has the ability to manipulate the market due to sheer size of operations. China. This isn't really a big secret, either. Anyone that can read/write/speak Mandarin knows about this. Just watch their crypto boards and you'll find the manipulation very, VERY easily. Answer solved.

bhouston 7y ago
Seriously? Is there any accessible write ups on this with proof? I think all internet-based stock boards contain scams and minor pump and dumps. I am sort of doubtful that any large scale pump and dumb would be coordinated out in the open, even if it was in Mandarin.

deleted 7y ago

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