4 ms·

“Stolen” This is Bitfinex we’re talking about. It’s a company run by criminals.

arcticbull 6y ago
Fun little reminder that when Bitfinex was "hacked" they took a 36% haircut, if memory serves, from all account holders, in all assets -- not just Bitcoin. [1] Except for one account. Coinbase. [2] They then issued tokens to all the accounts they skimmed, valued at $1 each redeemable for shares in Bitfinex. They effectively converted a $72 million dollar theft (at the time) into a $72 million dollar valuation for Bitfinex. One of their executives, Giancarlo, was recorded telling token holders the best way to get their money back was to sell their shares to other people before they realized. [3] > “The fastest way to get paid back, is to convert debt to shares and then sell your shares to another shareholder”. These people run Tether. This is the true magic of cryptocurrency. [1] https://www.reuters.com/article/us-bitfinex-hacked-hongkong-idUSKCN10I06H https://www.reuters.com/article/us-bitfinex-hacked-hongkong-... [2] https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ [3] https://medium.com/@bitfinexed/bitfinex-never-repaid-their-tokens-bitfinex-started-a-ponzi-scheme-86a9291add29 https://medium.com/@bitfinexed/bitfinex-never-repaid-their-t...
- plebianRube 6y ago
  Seems to me the root problem is when people decide to use Bitcoin outside of it's original intended use, and centralize it.
  - arcticbull 6y ago
    Well, that's because it's completely inadequate for it's intended use (due to its 2-3 tx/sec cap) forcing people into L2.
- rabf 6y ago
  The loss became tradable on their exchange, the swap for equity was optional, their was also a token for for representing the return of the stolen funds that was trading as well. Eventually the tokens representing the losses were trading for an equal value to the loss so if you were a little patient you were reimbursed. Alternatively if you took the gamble to buy the debt tokens at below dollar parity you made a nice return. Meanwhile MtGox users are still waiting for legal proceedings to conclude and get their money back.
  - rabf 6y ago
    After the Mtgox hack mtgox debt was breifly tradable on website called bitcoinbuilder iirc. Financial innovation at its finest.
  - arcticbull 6y ago
    The exchange of the 36% of assets for the token is a kind of fraud called conversion. [1] That it happened to work out is honestly completely irrelevant. Just as Madoff wouldn't have gotten off scott free if he'd happened to find a way to make people whole. [1] http://www.dmlp.org/legal-guide/elements-conversion http://www.dmlp.org/legal-guide/elements-conversion
- creepto 6y ago
  I love Tether. 3 Billion printed this week, back then they should've just printed 72 mil USDT.
  - arcticbull 6y ago
    Should just print a trillion or two, you know, in reserve. "Authorized but not issued" is what they call it right?

Fun little reminder that when Bitfinex was "hacked" they took a 36% haircut, if memory serves, from all account holders, in all assets -- not just Bitcoin. [1] Except for one account. Coinbase. [2] They then issued tokens to all the accounts they skimmed, valued at $1 each redeemable for shares in Bitfinex. They effectively converted a $72 million dollar theft (at the time) into a $72 million dollar valuation for Bitfinex. One of their executives, Giancarlo, was recorded telling token holders the best way to get their money back was to sell their shares to other people before they realized. [3] > “The fastest way to get paid back, is to convert debt to shares and then sell your shares to another shareholder”. These people run Tether. This is the true magic of cryptocurrency. [1] https://www.reuters.com/article/us-bitfinex-hacked-hongkong-idUSKCN10I06H https://www.reuters.com/article/us-bitfinex-hacked-hongkong-... [2] https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ [3] https://medium.com/@bitfinexed/bitfinex-never-repaid-their-tokens-bitfinex-started-a-ponzi-scheme-86a9291add29 https://medium.com/@bitfinexed/bitfinex-never-repaid-their-t...

plebianRube 6y ago
Seems to me the root problem is when people decide to use Bitcoin outside of it's original intended use, and centralize it.
- arcticbull 6y ago
  Well, that's because it's completely inadequate for it's intended use (due to its 2-3 tx/sec cap) forcing people into L2.
rabf 6y ago
The loss became tradable on their exchange, the swap for equity was optional, their was also a token for for representing the return of the stolen funds that was trading as well. Eventually the tokens representing the losses were trading for an equal value to the loss so if you were a little patient you were reimbursed. Alternatively if you took the gamble to buy the debt tokens at below dollar parity you made a nice return. Meanwhile MtGox users are still waiting for legal proceedings to conclude and get their money back.
- rabf 6y ago
  After the Mtgox hack mtgox debt was breifly tradable on website called bitcoinbuilder iirc. Financial innovation at its finest.
- arcticbull 6y ago
  The exchange of the 36% of assets for the token is a kind of fraud called conversion. [1] That it happened to work out is honestly completely irrelevant. Just as Madoff wouldn't have gotten off scott free if he'd happened to find a way to make people whole. [1] http://www.dmlp.org/legal-guide/elements-conversion http://www.dmlp.org/legal-guide/elements-conversion
creepto 6y ago
I love Tether. 3 Billion printed this week, back then they should've just printed 72 mil USDT.
- arcticbull 6y ago
  Should just print a trillion or two, you know, in reserve. "Authorized but not issued" is what they call it right?