11 ms·

This is how banking regulations happened, once enough people lost their money, the law had to step in.

throw_m239339 5y ago
> This is how banking regulations happened, once enough people lost their money, the law had to step in. Technically crypto corporations are already regulated the same way banks and financial businesses are. It's just that most of these exchanges exist outside US jurisdiction, and will often not accept US customers.
- papito 5y ago
  There was an article in the NYT literally a few days ago about how Kyiv, Ukraine has become an absolute unregulated wild west of crypto.
- raesene9 5y ago
  Well they'll pinkie swear they don't take US customers, whilst ignoring VPNs and other mechanisms of appearing not to be in the USA, at least...
jl2718 5y ago
My concern is that “the law” is incompetent in this domain.
- jspaetzel 5y ago
  The concern should be about how "the law" can't be applied here
- thehappypm 5y ago
  And possibly incompatible.
- toomuchtodo 5y ago
  That’s sort of humorous that the law is the problem after $10 billion+ has been lost to crypto theft and fraud. Maybe the tech is the problem? “Maybe I’m out of touch with the rest of the developed world? Impossible, it’s everyone else demanding the enforcement of laws and regulations around value transfer, storage, and ownership who are the problem.” (Not you personally, crypto folks in general)
  - vmception 5y ago
    Then its not lost and isn't a problem, to the current owners. The prior owners were hodling it wrong.
    - toomuchtodo 5y ago
      That’s not how common and property law work, and the enforcement of the law is catching up. I think that’s the real problem crypto proponents have; that the law is recognizing digital assets as assets, and the property rights that go along with that. Tangentially, I support my tax dollars being spent pursuing these threat actors for as long as it takes, with sentencing guidelines in line with the value stolen.
      - wincy 5y ago
        So for $800 they go to prison for 3 years, and for anything over $50,000,000 they get a commuted sentence and parole? That’s generally how it works in the US legal system.
        voakbasda 5y ago
        I wish this was more of a joke, but this is exactly how the US “justice” system works. You must buy your freedom, or you will suffer a disproportionate and unjust sentence. Remember, they are not courts of “truth” and “justice”; they are Courts of Law.
        toomuchtodo 5y ago
        This person below stole $1.6 million in PPP loans and is going to jail for 9 years. The system can and does work, although outliers can be unfortunate. Overall, arguably, the US justice system functions and rule of law is needed for a functioning society. https://www.mercurynews.com/2021/11/30/houston-man-spent-ppp-money-on-a-lambo-and-got-9-years/ https://www.mercurynews.com/2021/11/30/houston-man-spent-ppp...
- joenathanone 5y ago
  The law isn’t perfect but we aren’t seeing banks getting robbed or hacked and people losing their money, also I’m sure all the people with money in that exchange would be loving from FDIC insurance right now, sure it’s only $100k but a whole lot better than nothing.
  - Tenoke 5y ago
    We aren't seeing banks being hacked and people losing money? Sorry, what? Here is one comparable hack[0] I remember which followed another series of SWIFT hacks. Further, people lose money all the time to more minor exploits that target just specific accounts, credit cards are always sold (less of a fault of the banks directly but tied to how the system is set up), Robinhood had a data breach recently, etc. >also I’m sure all the people with money in that exchange would be loving from FDIC insurance right now Plenty of big exchanges like Binance and Coinbase do have similar insurance and have made users whole after a hack[1].. 0. https://en.m.wikipedia.org/wiki/Bangladesh_Bank_robbery https://en.m.wikipedia.org/wiki/Bangladesh_Bank_robbery 1. https://www.wired.com/story/hack-binance-cryptocurrency-exchange/amp https://www.wired.com/story/hack-binance-cryptocurrency-exch...
    - roywiggins 5y ago
      The Bangladesh hack would have been much worse if the Fed hadn't been custodian of much of the money: "The Federal Reserve Bank of New York blocked the remaining thirty transactions, amounting to US$850 million, due to suspicions raised by a misspelled instruction" and much of the other money was recovered: "All the money transferred to Sri Lanka has since been recovered. However, as of 2018 only around US$18 million of the US$81 million transferred to the Philippines has been recovered" Yeah, I wouldn't want to rely on the Federal Reserve Bank noticing a misspelled instruction before my billion dollars were released, but at least there's someone with a brain looking at the transfer before it happens!
      - ryanlol 5y ago
        From the BBC: >The RCBC bank branch in Manila to which the hackers tried to transfer $951m was in Jupiter Street. There are hundreds of banks in Manila that the hackers could have used, but they chose this one - and the decision cost them hundreds of millions of dollars. >"The transactions… were held up at the Fed because the address used in one of the orders included the word 'Jupiter', which is also the name of a sanctioned Iranian shipping vessel," says Carolyn Maloney. >Just the mention of the word "Jupiter" was enough to set alarm bells ringing in the Fed's automated computer systems. The payments were reviewed, and most were stopped. But not all. Five transactions, worth $101m, crossed this hurdle.
- agency 5y ago
  Unlike the crypto exchanges, which are paragons of competence.
  - gruez 5y ago
    >which are paragons of competence. Yes, actually. If I had to trust one entity to safeguard something digital, I'd trust the security team at a major crypto exchange, than the police department at a major city. The problem isn't really that they're incompetent, it's that they're the juiciest targets.
- emerged 5y ago
  Yea, the law should be programmed by random front end devs using house of card custom scripting engines instead.
- rco8786 5y ago
  By what measure??
  - jl2718 5y ago
    As in, they could have easily stopped many of these hacks, even after they were discovered, but they have zero clue about what to do about them, so they let the money escape, which means crypto to cash through the normal banking system. Short story: I had a job offer from one of these financial law enforcement agencies, specifically focused on preventing and tracking crypto hackers. It was rescinded by the new administration due to a mission change in the organization, refocusing on revenue through regulatory enforcement and surveillance rather than protecting Americans from theft and violence. In reality, calling them incompetent may be charitable. The simplest explanation is that they are profit-driven, and frankly don’t care about any actual harm. The money from these hacks often goes toward torturing the North Korean people, funding terror against American interests, or supporting violent drug cartels. One of the few things that angers me is that the only thing they are doing about it, is using it to further their surveillance agenda against Americans. That’s the measure I use.
kkjjkgjjgg 5y ago
What kind of regulation would help, exactly?
- Ansil849 5y ago
  Penalties for insufficient security controls, for starters.
  - logicalmonster 5y ago
    What exactly is “sufficient security controls”? This is the type of thing that sounds good on the surface, but becomes nightmarish when you start to think about how it might work in practice. Experts disagree on how to do security. For instance, there’s still some people who insist that complex password rules are a genius idea that makes the world far safer, yet they’re unambiguously bad for security because they knowingly decrease the number of possible password combinations. Whose idea of best practices wins? I’d hate that the decision now becomes a dictate by some bureaucracy that likely barely knows what the hell is going on.
    - Ansil849 5y ago
      You're acting like there are no established security controls for financial institutions. There are.
      - logicalmonster 5y ago
        Maybe so. But my bank still does 2 Factor Authentication only through SMS and doesn’t even offer some kind of Authentication App as an option. Additionally they have strict password rules in place, a basically broken password reset form, and a comically short maximum password limit. Color me not impressed with whatever rules do exist.
        Ansil849 5y ago
        It's not "maybe so", it's a matter of fact. And we're not talking about outdated user-facing login authentication procedures, we're talking about securing the back-end. When is the last time your bank had $150 million stolen?
agumonkey 5y ago
financial independence means not using money

> This is how banking regulations happened, once enough people lost their money, the law had to step in. Technically crypto corporations are already regulated the same way banks and financial businesses are. It's just that most of these exchanges exist outside US jurisdiction, and will often not accept US customers.

papito 5y ago
There was an article in the NYT literally a few days ago about how Kyiv, Ukraine has become an absolute unregulated wild west of crypto.
raesene9 5y ago
Well they'll pinkie swear they don't take US customers, whilst ignoring VPNs and other mechanisms of appearing not to be in the USA, at least...

jl2718 5y ago

My concern is that “the law” is incompetent in this domain.

jspaetzel 5y ago
The concern should be about how "the law" can't be applied here
thehappypm 5y ago
And possibly incompatible.
toomuchtodo 5y ago
That’s sort of humorous that the law is the problem after $10 billion+ has been lost to crypto theft and fraud. Maybe the tech is the problem? “Maybe I’m out of touch with the rest of the developed world? Impossible, it’s everyone else demanding the enforcement of laws and regulations around value transfer, storage, and ownership who are the problem.” (Not you personally, crypto folks in general)
- vmception 5y ago
  Then its not lost and isn't a problem, to the current owners. The prior owners were hodling it wrong.
  - toomuchtodo 5y ago
    That’s not how common and property law work, and the enforcement of the law is catching up. I think that’s the real problem crypto proponents have; that the law is recognizing digital assets as assets, and the property rights that go along with that. Tangentially, I support my tax dollars being spent pursuing these threat actors for as long as it takes, with sentencing guidelines in line with the value stolen.
    - wincy 5y ago
      So for $800 they go to prison for 3 years, and for anything over $50,000,000 they get a commuted sentence and parole? That’s generally how it works in the US legal system.
      - voakbasda 5y ago
        I wish this was more of a joke, but this is exactly how the US “justice” system works. You must buy your freedom, or you will suffer a disproportionate and unjust sentence. Remember, they are not courts of “truth” and “justice”; they are Courts of Law.
      - toomuchtodo 5y ago
        This person below stole $1.6 million in PPP loans and is going to jail for 9 years. The system can and does work, although outliers can be unfortunate. Overall, arguably, the US justice system functions and rule of law is needed for a functioning society. https://www.mercurynews.com/2021/11/30/houston-man-spent-ppp-money-on-a-lambo-and-got-9-years/ https://www.mercurynews.com/2021/11/30/houston-man-spent-ppp...
joenathanone 5y ago
The law isn’t perfect but we aren’t seeing banks getting robbed or hacked and people losing their money, also I’m sure all the people with money in that exchange would be loving from FDIC insurance right now, sure it’s only $100k but a whole lot better than nothing.
- Tenoke 5y ago
  We aren't seeing banks being hacked and people losing money? Sorry, what? Here is one comparable hack[0] I remember which followed another series of SWIFT hacks. Further, people lose money all the time to more minor exploits that target just specific accounts, credit cards are always sold (less of a fault of the banks directly but tied to how the system is set up), Robinhood had a data breach recently, etc. >also I’m sure all the people with money in that exchange would be loving from FDIC insurance right now Plenty of big exchanges like Binance and Coinbase do have similar insurance and have made users whole after a hack[1].. 0. https://en.m.wikipedia.org/wiki/Bangladesh_Bank_robbery https://en.m.wikipedia.org/wiki/Bangladesh_Bank_robbery 1. https://www.wired.com/story/hack-binance-cryptocurrency-exchange/amp https://www.wired.com/story/hack-binance-cryptocurrency-exch...
  - roywiggins 5y ago
    The Bangladesh hack would have been much worse if the Fed hadn't been custodian of much of the money: "The Federal Reserve Bank of New York blocked the remaining thirty transactions, amounting to US$850 million, due to suspicions raised by a misspelled instruction" and much of the other money was recovered: "All the money transferred to Sri Lanka has since been recovered. However, as of 2018 only around US$18 million of the US$81 million transferred to the Philippines has been recovered" Yeah, I wouldn't want to rely on the Federal Reserve Bank noticing a misspelled instruction before my billion dollars were released, but at least there's someone with a brain looking at the transfer before it happens!
    - ryanlol 5y ago
      From the BBC: >The RCBC bank branch in Manila to which the hackers tried to transfer $951m was in Jupiter Street. There are hundreds of banks in Manila that the hackers could have used, but they chose this one - and the decision cost them hundreds of millions of dollars. >"The transactions… were held up at the Fed because the address used in one of the orders included the word 'Jupiter', which is also the name of a sanctioned Iranian shipping vessel," says Carolyn Maloney. >Just the mention of the word "Jupiter" was enough to set alarm bells ringing in the Fed's automated computer systems. The payments were reviewed, and most were stopped. But not all. Five transactions, worth $101m, crossed this hurdle.
agency 5y ago
Unlike the crypto exchanges, which are paragons of competence.
- gruez 5y ago
  >which are paragons of competence. Yes, actually. If I had to trust one entity to safeguard something digital, I'd trust the security team at a major crypto exchange, than the police department at a major city. The problem isn't really that they're incompetent, it's that they're the juiciest targets.
emerged 5y ago
Yea, the law should be programmed by random front end devs using house of card custom scripting engines instead.
rco8786 5y ago
By what measure??
- jl2718 5y ago
  As in, they could have easily stopped many of these hacks, even after they were discovered, but they have zero clue about what to do about them, so they let the money escape, which means crypto to cash through the normal banking system. Short story: I had a job offer from one of these financial law enforcement agencies, specifically focused on preventing and tracking crypto hackers. It was rescinded by the new administration due to a mission change in the organization, refocusing on revenue through regulatory enforcement and surveillance rather than protecting Americans from theft and violence. In reality, calling them incompetent may be charitable. The simplest explanation is that they are profit-driven, and frankly don’t care about any actual harm. The money from these hacks often goes toward torturing the North Korean people, funding terror against American interests, or supporting violent drug cartels. One of the few things that angers me is that the only thing they are doing about it, is using it to further their surveillance agenda against Americans. That’s the measure I use.

kkjjkgjjgg 5y ago

What kind of regulation would help, exactly?

Ansil849 5y ago
Penalties for insufficient security controls, for starters.
- logicalmonster 5y ago
  What exactly is “sufficient security controls”? This is the type of thing that sounds good on the surface, but becomes nightmarish when you start to think about how it might work in practice. Experts disagree on how to do security. For instance, there’s still some people who insist that complex password rules are a genius idea that makes the world far safer, yet they’re unambiguously bad for security because they knowingly decrease the number of possible password combinations. Whose idea of best practices wins? I’d hate that the decision now becomes a dictate by some bureaucracy that likely barely knows what the hell is going on.
  - Ansil849 5y ago
    You're acting like there are no established security controls for financial institutions. There are.
    - logicalmonster 5y ago
      Maybe so. But my bank still does 2 Factor Authentication only through SMS and doesn’t even offer some kind of Authentication App as an option. Additionally they have strict password rules in place, a basically broken password reset form, and a comically short maximum password limit. Color me not impressed with whatever rules do exist.
      - Ansil849 5y ago
        It's not "maybe so", it's a matter of fact. And we're not talking about outdated user-facing login authentication procedures, we're talking about securing the back-end. When is the last time your bank had $150 million stolen?

agumonkey 5y ago

financial independence means not using money