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FTX faces potential hack, sees mysterious outflows totaling more than $600M
- smt88 4y agoThere's no way this is a coincidence. This is undoubtedly people who work(ed) at the company and were trusted with private keys trying to get away with some money while they can.
- alasdair_ 4y agoAgreed. It's by far the simplest answer. They already have the keys and have the code.
- paulpauper 4y agoI don't think it was insider job. If insiders wanted to steal people's assets why do it in such a public manner? If they have the keys they can just move funds discretely from the larger pooled assets without draining individual accounts. A malicious app update draws way too much undue attention.
- oliv__ 4y agoIf I were an insider, I'd want to steal the funds out in the open and add decoys such as the app update to make it look like a hack.
- bmitc 4y agoWhat's weird is, why wasn't the system turned off? They've totally collapsed, filing bankruptcy, and supposedly aren't allowing withdrawals, so what was the point of leaving the system up and vulnerable?
- 55555 4y agoThey don't have the power to pause non-FTT blockchain systems. What you're suggesting isn't really possible. Someone has to hold the keys -- and I doubt they used sufficient multi-sig -- and anyone who has the keys can always move the funds.
- bmitc 4y agoBut aren't they themselves (FTX) custodians of these funds? In that case, why not turn their services off to protect the keys from being hacked? What you say makes sense once a hack takes place, but how did the hackers get the keys? Or do they use external custodians?
- v64 4y ago> how did the hackers get the keys? It's most likely an inside job, either by disgruntled employees or SBF himself: "In a subsequent examination, FTX legal and finance teams also learned that Bankman-Fried implemented what the two people described as a "backdoor" in FTX's book-keeping system, which was built using bespoke software. They said the "backdoor" allowed Bankman-Fried to execute commands that could alter the company's financial records without alerting other people, including external auditors. This set-up meant that the movement of the $10 billion in funds to Alameda did not trigger internal compliance or accounting red flags at FTX, they said." [1] [1] https://archive.ph/YImJS https://archive.ph/YImJS
- smt88 4y agoThat is truly astonishing. How did he think he could get away with it? I kept wondering how someone who seemed smart, wanted to help others, and admitted that crypto is a Ponzi scheme could end up in crypto. It broke my brain. Now I see he was a brazen criminal all along and the world makes sense again.
- tfsh 4y agoIt's been stated that FTX can access the wallets of their customers [1], I wonder if employees or other bad actors knowing the ship is sinking have decided to - forgive me for the quip - plunder any remaining assets. 1: https://www.coindesk.com/policy/2022/11/10/ftx-violated-its-own-terms-of-service-and-misused-user-funds-lawyers-say/ https://www.coindesk.com/policy/2022/11/10/ftx-violated-its-...
- SighMagi 4y agoThat was my first thought. Not FTX related, but I just got another email from Coinbase reassuring me that they’re not gonna use customer funds without permission. I have in the past moved my shit out of Coinbase wallets because of doubts about that. Honestly though I just want to GTFO of crypto at this point…
- readthenotes1 4y ago"at some point, you are the greater fool" "If you look around the table and can't see the chump, you are the chump"
- perryizgr8 4y ago> Coinbase reassuring me that they’re not gonna use customer funds without permission "Not gonna" is wildly different from "cannot". So are you sure they physically cannot use your funds? If that's not the case, their promise is worth just the price of sending that email to you.
- lottin 4y agoGet out, man. Learn investment theory. All you need is a couple of index funds and bonds. Investing isn't supposed to be exciting or make you rich quick.
- hello639 4y ago> All you need is a couple of index funds and bonds. Ah, spoken like a true middle class Boglehead. VTI/VOO will not change your life, even after 30 years. Broad market ETFs are not worth the risk. You’re better off doing bonds (little to no risk) or crypto (high risk, more likely for life-changing generational wealth compared, even compared to FAANG SWE TC).
- graeme 4y agoThey’re making Madoff look good. He semi-voluntarily* turned himself in when the jig was up, and the govt eventually recovered about 2/3rd of the money FTX seems like it’s still trying to steal funds *Madoff confessed to his family, said he would turn himself in, and asked for 24 hours to get affairs in order. Family refused, called FBI immediately
- latchkey 4y agoHeck, they are making Mark Karpelès look good. https://twitter.com/MagicalTux/status/1591295272621314049 https://twitter.com/MagicalTux/status/1591295272621314049
- adastra22 4y agoI’m getting my mtgox claim paid out, finally. Never would have picked that for my 2022 bingo card.
- fortran77 4y agoMadoff recovery is 88.35%. See: https://www.justice.gov/opa/pr/justice-department-announces-total-distribution-over-4-billion-victims-madoff-ponzi-scheme#:~:text=Madoff%20Investment%20Securities%20LLC%20(BLMIS,their%20total%20recovery%20to%2088.35%25 https://www.justice.gov/opa/pr/justice-department-announces-.... Many of Madoff's victims exaggerated their loses. If they invested $1MM at a claimed return of 15% for 6 years, they would claim they lost $2MM, not the $1MM principal. (I just hope our Government doesn't try to bail out crypto speculators!)
- graeme 4y agoThanks! Wow even better than I recalled To be fair there’s something to that idea. Market returns about 7% on average. Over six years that would be an opportunity cost of 50%. But, as you say there’s got to be some loss for choosing to put one’s money with a con artist I doubt there will be a crypto bailout as it seemingly didn’t get big enough to blow up anything outside itself. It also had an anti public relations campaign for years
- zeven7 4y ago> Investigating abnormalities with wallet movements related to consolidation of ftx balances across exchanges - unclear facts as other movements not clear. Will share more info as soon as we have it. From FTX's general counsel[1], retweeted by FTX_Official. So that indicates it's not being sold off legitimately under some sort of liquidation proceedings. It could be insiders or it could be hackers. [1] https://twitter.com/_Ryne_Miller/status/1591281729125613570 https://twitter.com/_Ryne_Miller/status/1591281729125613570 Rumors on Twitter[2] are there was also an update just pushed to the FTX app. Concerns are the update may contain malware. It makes sense to uninstall the FTX app if you have it. [2] https://twitter.com/zachxbt/status/1591295039946493952 https://twitter.com/zachxbt/status/1591295039946493952
- DavidSJ 4y ago> Reports on crypto Twitter are that this is a hack Is that based on some evidence, or is it speculation?
- jmathai 4y agoGreed drives all of us to do things we normally wouldn’t. Given the nature of crypto, unless there’s a good reason to have the FTX app (say as opposed to using their website), then uninstalling it seems like very sound advice.
- zeven7 4y agoI reworded things to separate the first hand information (FTX_Official indicating they don't know what's going on) from speculation (app hacker rumors).
- ackbar03 4y agoI saw an update on coindesk that they confirmed it was a hack on their official telegram channel? What a dumpster fire. But let's be honest, I think retail investors weren't getting anything back anyways. Probably only impacts creditors
- ww520 4y agoIt's wild. The place is brazenly being robbed in public eyes. Is it under the Bahamas laws? What can anyone do?
- mcast 4y agoBahamas has an extradition treaty with the US. If SBF doesn’t flee he will definitely get indicted in US court
- TedDoesntTalk 4y agoI don’t think SBF would be dumb enough to steal $400m right now when the whole world is watching his every move.
- 0x5345414e 4y agoWell he was dumb enough to post a bunch of lies and nonsense to Twitter the last couple days…
- from 4y agoMaybe I'm more cynical than most but those tweets to me feel like they will be used as evidence in the future to argue that he didn't really have the full picture what was going at FTX and that it was really the Alameda people or the devs etc behind everything.
- paganel 4y ago> Alameda people or the devs etc behind everything. SBF used to have intercourse with the Alameda CEO, and if I'm not mistaken they were all in this together (FTX + Alameda, that is). Article on the intercourse thing [1]. The admins of this forum can complain about "the level of discussion getting low" as much as they want, but this is the reality, this is how billions of dollars have been stolen. [1] https://www.coindesk.com/business/2022/11/10/bankman-frieds-cabal-of-roommates-in-the-bahamas-ran-his-crypto-empire-and-dated-other-employees-have-lots-of-questions/ https://www.coindesk.com/business/2022/11/10/bankman-frieds-...
- laserbeam 4y agoKnowing little about how ftx works... Is the article talking about customer accounts at FTX being drained? Or accounts belonging to FTX being drained?
- mudrockbestgirl 4y agoFTX is a centralized entity, just like PayPal is. There is no such difference. As a centralized company, they are supposed to hold all customer funds in their own bank/wallet/whatever account(s).
- sam345 4y agoiait may be centralized but there's no comparison to PayPal. PayPal does not commingle funds
- anonymoushn 4y agoPaypal keeps separate bank accounts for each customer?
- andreareina 4y agoThe claim is that PayPal keeps user funds separately from the funds that PayPal e.g. uses to pay for operating expenses.
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- jdprgm 4y agoThis is an unreal speedrun nightmare timeline. At this rate I am half expecting to wake up to news tomorrow that SBF is dead.
- xqcgrek2 4y ago
- dang 4y agoPlease don't do this here.
- deleted 4y ago[deleted]
- can16358p 4y agoHe'll probably play a Leauge of Legends match before though.
- dang 4y agoPlease keep this sort of nastiness off HN. We're trying for something else here, as you'll see if you review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html.
- joshmn 4y agoNew speedrun world-best? I realize this doesn’t add much by way of substance but this has been an incredible watch. I hope someone is keeping an eye on SBF.
- Gatsky 4y agoIf this is real, most likely an inside job. I mean FTX staff probably had a lot of their own crypto on the exchange, so now that it appears Bankman stole it from them, why not steal it back.
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- manholio 4y agoThis sounds like a great insider action to cover the fraud and mismanagement: leak the keys to the kingdom in a dark web forum, so that in the resulting commotion you can blame the hackers who had access all along and obviously made your platform fail. Something, anything that your lawyers can grasp at.
- Gatsky 4y agoI doubt that Bankman would have sanctioned that though, since he’s already admitted to malfeasance. An insider could leak the keys and arrange for a cut of the proceeds, was my line of thinking.
- manholio 4y agoBankman would have not sanctioned it because he's got much more to lose the greater the hole is. Someone around Bankman though, that has no substantial stake in FTX and suddenly realizes he was an accessory to financial fraud, has strong incentives to burn the house down. From a secure and audited system where only a handful of people had access and the actions of each are recorded (if we dismiss Bankman's "backdoor" for a moment), all of a sudden we have a system that was wide open to the world and raided exactly after the financial collapse. As it's easy to see, your Honor, the hackers were in the system all along, forging the so called audit trail allegedly incriminating my client; when the game was up, they pounced.
- paulpauper 4y agoI am skeptical because if insiders have access to the keys, they would not do it in such a obvious manner. They would instead drain crypto accounts that are pooled or reserved, not associated with the app directly. They would have drained these pooled assets discretely instead of a malicious app update , which draws too much attention. Of course, it's possible that said insiders had access to the app update but not the keys.
- draw_down 4y ago
- genmud 4y agoFraud. This is why banking regulation is important, almost all banking laws on the books exists because someone got screwed.
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- readthenotes1 4y agoBecause someone screwed over too many other people
- fastball 4y agoMore like because the wrong people got screwed over.
- mudrockbestgirl 4y agoHere is a view of the assets on-chain for anyone that's interested: https://debank.com/profile/0x59abf3837fa962d6853b4cc0a19513aa031fd32b https://debank.com/profile/0x59abf3837fa962d6853b4cc0a19513a... Currently at ~$390M. It looks like they're trying to swap most of the tokens they received into ETH on-chain.
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- shorthistory 4y ago1. Who is transferring the funds? a. Bankman-Fried and associates b. insiders (disgruntled) c. outsiders (hackers) 2. Is it plausible that the transferred funds be laundered? 3. Can this altruism get any more effective? This story is utterly fascinating. It keeps getting better and better. I remember thinking Mt. Gox was wild. This fraud is second only to Ponzi.
- vishnugupta 4y agoThe simplest explanation I have (occam’s razor) is a tie between 1.a and 1.b I’ve also heard rumors that inside bad actors pushed out a forced FTX app update to gain access to accounts. So the advisory is to uninstall FTX and not go anywhere near that website. Any money one has is unfortunately gone, wait for the bankruptcy proceedings to recoup it, if at all.
- vgatherps 4y ago> I’ve also heard rumors that inside bad actors pushed out a forced FTX app update to gain access to accounts. If it's an inside job with this capability you'd likely already have such access? Only way is that somebody has access to push this, doesn't have access to the keys, and rewrites the app to send them assets or something. But the mass withdrawals imply the keys are compromised, and pushing the app would very unquestionably imply you? It's quite strange that a bad update was pushed at all since it implies that the bad actor doesn't have key access, but everything else they do does.
- drewmol 4y agoDo you think it’s at all likely they were able to exfiltrate the keys or escalate privileges by pushing the malicious update? It’s not an iOS or android update from my understanding, just an update to the backend/content server.
- vgatherps 4y agoThe content server probably wouldn't be useful for getting the keys, unless they have some insane wallet manager. My best guess is simple key exfiltration?
- headsoup 4y agoWhat I don't get (well I do, lobbying and inside deals), is why these guys have run so long (especially Tether). Just because crypto is a 'decentralised' wild west opposed to government shouldn't mean they sit outside of the laws around fraud, laundering and deception, especially if they're registered companies. The lack of legal focus, given the obvious illegitimacy of it all is disgraceful and I can't even imagine the size of the wealth transfer happening through all this.
- throwawaysleep 4y agoPopular appeal? All sorts of scams, from dietary supplements to homeopathy pyramid schemes are permitted to carry on because fighting them is too unpopular. Edit: take a look at Twitter. Crypto folks are busy worried that the Us gov will overreact and regulate crypto over this.
- 1270018080 4y agoScientology, herbalife, and other obvious scams have persisted. I think crypto people love getting defrauded, and as long as they enjoy it there won't be much pressure to prosecute.
- lelanthran 4y agoI Dunn if it is fair to include Scientology in that. Other than the amounts of money involved, it clearly is a religion.
- Ekaros 4y agoAnd in general religions are in business of extracting money from people and using it for their own means. Scientology is not any different from any other. Including the mainstream Christian cults...
- e1ghtSpace 4y agoWait is the government a religion?
- Aaronstotle 4y agoThe FTX App has allegedly been hacked as well. This reeks of an inside job/coordinated attack. Edit: It is rumored that SBF is en-route to Argentina Second Edit: This is a Twitter rumor, with no verification, could be fake news. I was going to paste the Tweet, but the Tweet has been removed because it was seen as unlikely.
- 1270018080 4y agoArgentina has an extradition treaty with the US though?
- Aaronstotle 4y agoYeah, I will post the link to the plane that is rumored to be his.
- notch656a 4y ago... and extremely porous borders. Doubt anybody would be dumb enough to actually fly directly to their target country. Also worth noting, due to a quirk in the way Argentina citizenship laws are written once he is in the country he can file immediately for citizenship and he won't be deportable (although he will be extraditable). I'm not an attorney but that may help him in case his passport is revoked.
- shorthistory 4y agoWhat is the source of rumor please?
- saurik 4y agohttps://twitter.com/0xfoobar/status/1591292545346473984 https://twitter.com/0xfoobar/status/1591292545346473984
- graeme 4y agoApp not updated in app store. Could popup box be edited in app to be malicious of would such a feature need to already be coded in like Epic’s non app store payments thing?
- Magi604 4y agoTether is just as if not more shady than anything coming out of this whole FTX saga. It wouldn't surprise me if people behind the scenes are working on it right now to try and bring it down and be first to claim that scalp.
- rippercushions 4y agoIt gets worse: somebody has pushed what appears to be a malicious update to the FTX app, and the official FTX telegram channel is warning people not to even browse to the website! https://twitter.com/zachxbt/status/1591293813519253504 https://twitter.com/zachxbt/status/1591293813519253504
- graeme 4y agoI’ve been trying to figure out the technicalities there. Neither the ios nor android apps have updates since the crash. The update box is clearly based on their pre existing popup used for things like 2FA. Could this popup have been modified with new text and linked to a new malicious site without an app update on ios or android? Or, could the popup only function if it was already coded into the app waiting to be activated? Meaning premeditated
- fshbbdssbbgdd 4y agoIt’s pretty common for apps to load some external content from a server to show to the user. This is useful in part because it allows you to update the content without going through the slow app review process. Potentially, if your backend got hacked, the hackers could change this content.
- graeme 4y agoSure, but your onboarding flow popup buttons? I don’t think app review allows those to be loaded from a website
- liamfd 4y agoYou can definitely serve content like that from your server and have the app render it (no website required). The review process would not block that. You could also serve a change like this with an OTA update, again no app store review required, which ios and android allow (as long as you don't fundamentally change the app, and even then they could only catch that retroactively. Not sure if they'd care if you load it in a webview as long as the UX wasn't substantially different. I seem to recall getting bounced to web auth flows pretty often.
- alasdair_ 4y agoIsn’t this just people that live in the Bahamas draining their own accounts (which is still allowed)? Plus, obviously, people who can find a random Bahamas native to KYC their account for them.
- paxys 4y agoI imagine a large chunk of FTX users in the Bahamas are FTX employees, and others associated with the company.
- 55555 4y agoAt the very least they would know someone there who is a citizen and could withdraw their funds for them. A loophole was utilized where a Bahamanian FTX user would create an NFT on FTX's NFT marketplace, and the locked user would buy it with the price equal to all of their funds. Then the Bahamanian would withdraw to fiat and take their cut. People probably made dozens of millions in a day taking 50% cuts while laundering people's money out.
- datalopers 4y agoSBF and Caroline (and probably Trabucco) probably already on their way to non-extradition countries and taking what little cash remains with them. They'll end up in prison if they don't.
- shorthistory 4y agoWho (which government agency etc.) would be expected to track their whereabouts in this scenario?
- sb057 4y agoThe problem with countries that don't extradite to the U.S. is that assassinations tend to be woefully easy.
- notch656a 4y agoAnd extraordinary rendition. TBH if you look at the data the US doesn't extradite that liberally. Even the Liberian torturer son of Charles Taylor or whatever was safe in the Caribbean despite being extraditable; as long as you didn't commit murder or do something big on the public radar or make political enemies or steal too much money I get the impression the US government doesn't try too hard. But they will definitely try to extradite this fella.
- shorthistory 4y agoGuys, don't worry: Sam has said he's sorry
- dang 4y agoPlease don't post unsubstantive comments. We're trying for something else here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
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- AndreLock 4y agoThis is absolutely wild and unprecedented. Imagine being a victim of Madoff's ponzi and - after already being traumatized by the unveiling of the fraud - discovering that the rest of the money had been stolen. Madoff's ponzi was larger, but the recovery rate was 88%. It looks like customers who didn't withdraw in time will end up with 0%.
- jl2718 4y agoSo, did Madoff's victims just end up with normal returns like they would have gotten any other way?
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- sillysaurusx 4y agoCan confirm. Lost 100% of my mtgox holdings in 2013. Theoretically my account balance is 7.73 BTC. I can still log in and see it. Maybe by the time I retire I’ll have recovered like 0.7 BTC. Which amusingly would be the sum of my original $11k investment. A lot of this is just gambling. People need to go into it with the mindset that the money will be gone tomorrow, and then be pleasantly surprised if it doesn’t. See this millionaire who is now worth $10k due to FTX: https://www.tiktok.com/t/ZTRxWq77B/ https://www.tiktok.com/t/ZTRxWq77B/
- rkagerer 4y agoIf you've been keeping up with your claim filings you should get around 1.1 to 1.25 BTC (estimate from https://blog.wizsec.jp/2021/02/mtgox-claim-calculator.html?m=1 https://blog.wizsec.jp/2021/02/mtgox-claim-calculator.html?m...)
- emadabdulrahim 4y agoIt's wild to me that he hasn't simply had a heart attack and died from the insanity of his actions and the consequences of it all. Imagine throwing a life like that and he's barely turned 30. Hubris and foolishness can lead to one's own grave. edit: I'm not wishing for his death. That's not what my comment was about. More on the psychological impact of deception at this magnitude and could any person cope with that.
- wmf 4y agoHe said the whole thing was a calculated risk. He only spent five years on crypto so he has plenty of time to try again. He probably wasn't counting on prison time though.
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- MisterBastahrd 4y agoWell, that's one way to look at it. The other way to look at it is that he's still insanely rich even though he's lost the vast majority of his fortune, and he probably has it locked away in a place that the Feds can't get it... so as long as he gets to a non-extradition country, he will probably be better off than 99.99999% of the people currently residing on this planet. I'd rather not travel because authorities are out to get me than not travel because I'm too broke to do so.
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- dang 4y agoFancifully entertaining someone's death is definitely over the line in HN comments. Please don't post like that. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Edit: I'm surprised at how many people are eager to go there: https://news.ycombinator.com/item?id=33570385 https://news.ycombinator.com/item?id=33570385 https://news.ycombinator.com/item?id=33570266 https://news.ycombinator.com/item?id=33570266 https://news.ycombinator.com/item?id=33570205 https://news.ycombinator.com/item?id=33570205 That is not what HN is for, so please don't.
- 2pEXgD0fZ5cF 4y agoCryptocurrencies are speedrunning the history of the financial system and why it is the way it is.
- smaudet 4y agoAfter 10 billion USD goes missing you can bet it won't stay unregulated for long. But yeah it became apparent a while back that some very bad actors, speculators, had become involved in crypto, so I became inactive.
- readthenotes1 4y ago10B didn't go missing, it was stolen and they know stole it and where he put it. One to two billion is missing and probably stolen.
- zeven7 4y agoAre you sure? The numbers I saw that were a draft of the balance sheet showed ~$1 billion in liquid assets, and ~$9 billion in very illiquid, mostly very low volume crypto assets, such that it would likely be hard to even get an additional $1 billion out of that "$9 billion". Source: https://twitter.com/minigrogu/status/1591104167455510529 https://twitter.com/minigrogu/status/1591104167455510529
- vgatherps 4y agoA real good takeaway here is how even a single gap in compliance controls can lead to unbounded failures, here I think largely access controls and tracking. If an exec can just go and cook the books, or like sbf did, "secretly transfer 4bn to alameda", it doesn't matter if you have strict auditors. It doesn't matter if you have compliance and control rules around comingling. This will literally never be visible to anyone in your exchange since their data source is fundamentally wrong. Nothing they did was proper or legal in the first place! It's already quite regulated in that regard. But they were able to do so in the first place since the required compliance frameworks weren't completely in place.
- 4y ago
- rocket_surgeron 4y agoEvery time one of these cryptoscams matures I curse my rotten, stupid, brain. If I was smart, I too would be ripping off all of the cryptobros. Instead I dumb and do honest work.
- smaudet 4y agoA) few people can make money off of a ponsi scheme B) The unregulated crooks are making it so crypto either will be outlawed or regulated (e.g. central exchanges regulated), so you won't be able to scam for very much longer C) it's not just crypto bros, many people made the speculative investment who are relatively uninterested in it, you are mote likely to defraud your standard investor looking to trade stocks with e.g. Robinhood than any major players. So don't feel bad or think you have missed out. If you want to defraud someone go sell NFTs, those are literally nonsense sold to idiots...
- mrich 4y agoPeople will be going to jail for this. Do not take the short term view.
- quantified 4y agoLet's keep out eyes on this. It is a super lurid scenario (to use a word introduced by @dang on this posting). By "this" I don't mean the earlier bits of the FTX debacle, but specifically this draining event. The statement that "FTX apps are malware" is weird in that it implies they became malware a while back. I could see either hackers penetrating due to inadequate security, or insiders setting up for an opportune time. Until the crypto is tumbled, it will be possible to trace its movements. Perhaps it'll just get frozen somewhere to keep it inaccessible by FTX interests. Let's see how long it takes to determine and locate any suspects for this. I have no guess aa to that, but watching with interest. Who says the Binance app won't turn into a threat at some point?
- mrich 4y agoTo be clear, even the FTX bankruptcy and the way it happened, not even taking this outflow/hack here into account, is jail worthy. The question is whether it falls under US jurisdiction and whether the defense lawyers can be paid enough to somehow avoid this, or postpone for a decade or so.
- mrjin 4y agoWhy has this to be hack? Wouldn't it be much easier an inside job?
- tomashertus 4y agoIf something, this really smells like inside job. They are just draining everything out of the connected wallets. This is fucking shame.
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- moneycantbuy 4y agoto what extent can my pc/phone be compromised simply by going to a website? how would i know if malicious software is downloaded/active?
- shorthistory 4y agoMy thoughts also... can this be bigger than FTX? Can iOS/Android apps be updated without 3rd party approval?
- sgammon 4y agoThere is no evidence that a bypass occurred related to iOS or Android app review An analysis of the app update showed it disabling user features like account transfers. That makes sense for their bankruptcy steps.
- gfd 4y agoiirc someone on hn said the going rate for zero-days is just $1-2 million. there were at least 3 RCE on chrome just this year: https://www.theregister.com/2022/04/15/google-third-fix-chrome-vulnerability/ https://www.theregister.com/2022/04/15/google-third-fix-chro... the math works out for someone to spend it here given the amount of panicky crypto whales trying to get their money out of ftx. (OTOH, the math also suggest that these exchanges should've been hacked long long ago if these cheap zero days exist, so idk)
- throwawaysleep 4y agoCould be as simple as the defenders walked off the job at FTX.
- dang 4y agoAll: I know it's a bit hard but if you're going to comment on this, please review your comment to make sure it isn't shallow, lurid, or gloating. Most posts so far in this thread have been below that line. On HN we want thoughtful, substantive, and above all curious comments—where by curious is meant intellectually curious, not gawking. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- gasull 4y agoTo all the people replying that crypto isn't regulated: that's a myth. Exchanges are regulated and keep KYC info of their customers. If the FTX hack is true, then all that KYC info will be sold in the black market. Regulation didn't prevent the hack (or rug-pull?). Self-custody with DeFi does prevent it. It's shocking how some people are for tinkering hardware/software and self-hosting services like Nextcloud, but it comes to money they would rather leave their life savings with a third party (a bank or a custodial exchange) and renounce to all financial privacy.
- throwawaysleep 4y agoYou going to bet your tech skills vs a hacker when it comes to guarding your money? The reason people are comfortable tinkering with hardware and software is that it involves little to no risk. The stakes are extremely low.
- the-anarchist 4y agoYou mean a hacker that would need to enter your house, look for your hardware wallet, beat the mnemonic out of you and quickly enough steal the coins for you to not be able to transfer them yourself before he manages to find a computer with internet access that is sufficiently hidden to not be traced back?
- iakh 4y agoIs it really that surprising people would rather keep their money in a bank that has hired professional security guards rather than at home under their mattress?
- throwawaysleep 4y agoAnd the giant scam that is crypto marches on. I feel like such a schmuck for not working on ICOs when that’s as all going on. Was sure that this was all fraudulent, but you can walk off with a billion dollars now and nothing will happen.
- Ekaros 4y agoOr get on early on some of this junk. But I back then didn't believe it would go up and still don't believe it to stay up or go up more... Some many opportunities from pre-mined shit coins to ICOs and so on.
- DogOfTheGaps 4y agoElon posted about this on twitter: https://twitter.com/elonmusk/status/1591313397362352130 https://twitter.com/elonmusk/status/1591313397362352130
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- nixcraft 4y agoHe must be happy not to take the call with Sam Bankman-Fried to invest money https://twitter.com/TechEmails/status/1591107918816247808 https://twitter.com/TechEmails/status/1591107918816247808
- trophycase 4y agoWhere are the regulators and enforcers when we actually need them? How is any high up in this institution not arrested yet? What the hell are they doing? Like is this a psyop to destroy crypto? Is this preferential treatment of SBF due to his donations/regulatory capture? Imagine if there was a mass shooter in a crowd of people and they just let him continue firing until he ran out of ammo, that's analogous to what's happening right now. Absolutely insane.
- threeseed 4y ago> Like is this a psyop to destroy crypto Why would the government get their hands dirty when crypto can self-implode on its own.
- cuteboy19 4y agoI would remind you that classifying crypto to be securities would very easily make all of this illegal. Yet the crypto sphere fought tooth and nail against this.
- jl2718 4y agohttps://twitter.com/jagoecapital/status/1590751676105125888 https://twitter.com/jagoecapital/status/1590751676105125888
- paulpauper 4y agoRegulators are like the fire trucking coming after the home burned down. Regulators seem to do a poor at at stopping people from being scammed. Scammers keep coming up with new types of scams that evade regulators, and people keep falling for them.
- rchaud 4y agointeresting hypothetical with the mass shooter. crypto regulations being what they are, you would need some equivalent of a "good guy with a gun" to take out the bad one.
- YossarianFrPrez 4y agoRegardless of whether you are pro- or anti- crypto, the collapse of FTX, SBF's bubble bursting in a rather extreme fashion, and now this hack are more nails in the coffin for mainstream support. I am no fan of crypto myself, but it's interesting to think what would have to happen for crypto to burnish its image. Would key people have to voluntarily form some sort of coordinating council and self-regulate? Would they have to invite governments to regulate them better? Whatever the solution is, I'd be highly surprised if it could be done algorithmically and reassure anyone.
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- bamboozled 4y agoIs it? Maybe this is part of the hardening of these systems? Part of the evolution which grows a thicker skin? What about all the trials of traditional currencies we all know and love? Not really a crypto fanboy, but I'm not sure this means the end of anything.
- BlueTemplar 4y agoFrom the guy that did "FTX bankruptcy explained!" : "John Law - The First Financial Engineer - A History of Paper Money and The Mississippi Bubble" : https://youtu.be/H5uKPUPQSyQ https://youtu.be/H5uKPUPQSyQ
- douglaswlance 4y agoThis isn't a crypto failure. Crypto works. This is a human failure. FTX didn't collapse because of the technology. It collapsed because of human error. The fix is rather simple. If an organization looks like a bank and quacks like a bank; it should be regulated like a bank.
- foogazi 4y ago> This is a human failure Is there any crypto out there without humans ? Is there an undo button to reverse the transaction? All financial systems involve humans
- mudrockbestgirl 4y agoAccording to the latest reports, SBF is potentially on the run on a private jet [0] from the Bahamas to (probably) Argentina. He hasn't been confirmed to be on that plane, but it seems likely. This stuff is straight out of movie. [0] https://www.flightradar24.com/LVKEB/2e2e7cfd https://www.flightradar24.com/LVKEB/2e2e7cfd
- AustinDev 4y agoIf he is in fact on the run... Does this dude really think the CIA and FBI won't find him? He's likely not safe anywhere but Russia, China, North Korea or Israel.... maybe Pakistan.
- paxys 4y agoWhy would the CIA and FBI care? It's not like they are going to send Navy SEALs after him. This is a DoJ matter, and the most they will do is file extradition requests. If the country he is in decides to ignore them, well that's about it.
- AustinDev 4y agoHe stole from rich people. Madoff made the same mistake. Parallel construction is how the CIA would be involved helping the FBI or foreign police to nab him. I'm just pointing out that his threat model has now increased by several orders of magnitude. He'll never get away from this unless he does an Epstein.
- threeseed 4y agoThey wouldn't care. At this point crypto is simply a form of gambling. And the people being hurt are more than educated about the risks they take.
- xisthesqrtof9 4y agoWhy Israel? I’d assume they’d hand him over given their close background no?
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- labrador 4y agoSo it's turned into a rug pull?
- ddorian43 4y agoThis reminds me of `OSHA laws being written in blood`. The same has been true for everything in life and the stock market. And human nature didn't change with Crypto, so it WILL be the same.
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- dehrmann 4y ago> Others speculated that the outflows could be coordinated by a member of Bankman-Fried’s inner circle They announced the hack and told users not to log in so insiders could get their funds out first, right?
- tmaly 4y agoOptics. The timing of the hack is suspicious
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- Markoff 4y agothis is mt gox all over again, one would think people will learn something over the years
- infrawhispers 4y agoFTX General Counsel confirmed unauthorized transactions: https://twitter.com/_ryne_miller/status/1591326796305530880?s=46&t=Cesem2Gdg0p2ncZWXfclwA https://twitter.com/_ryne_miller/status/1591326796305530880?...
- mywaifuismeta 4y ago> FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage What assets?
- jl2718 4y agoI would like this to be a rogue white-hat. Anybody have a theory?
- binarynate 4y agoLarry David was right: https://youtu.be/Ut3m9OK1c7Y?t=46 https://youtu.be/Ut3m9OK1c7Y?t=46
- pbourke 4y agothis is some kind of rare triple word score double-reverse irony. I love it.
- paulpauper 4y agoSo ironic. the latest comments on the official FTX one are funny https://www.youtube.com/watch?v=BH5-rSxilxo https://www.youtube.com/watch?v=BH5-rSxilxo
- googlryas 4y agoI wonder how much Larry got paid for this? Very approximately he has a net worth of $500M and makes $50M/yr on Seinfeld royalties alone. How much do you have to pay someone like that to do a commercial for you?
- yalogin 4y agoThis whole saga has done irreparable damage to crypto. It will take a lot of time for it to come out of this hole. When there is money involved, and that too this much, there will be conspiracy theories flying around and the regular retail investor will be tough to win back. It will be very interesting to see what happens from here on out. Crypto doesn’t have any uses to begin with, if it’s purely used as pump and dump schemes why bother?
- mjburgess 4y agoAll it takes is a business case: how will this business make money? Where will its cash flow come from? Where's the value-add? How easy is it to be out-competed? Who are the existing market players? How do they make money? What are you offering customers that will attract them to your business? What is the horizon for profitability? You know, absolutely fundamental questions that have never been asked or answered of crypto. Questions that were "presumed answered" by made-up market capitalisations, and the flood of teenagers and young-adults into the schemes. "This time" is never different. The route to making a sustainable profit never changes.
- dan-robertson 4y agoI don’t know what you’re suggesting here really but in general running an exchange seems like a reasonable looking business – you match someone who wants to buy with someone who wants to sell and collect a tiny fee – and FTX appeared to be well run and profitable. The risks would mostly be getting hacked, massively (unintentionally) screwing up the accounting or being outcompeted. I don’t think one could have easily predicted this from first principles and if you’d told me a year or 5 months ago that one of the big N exchanges would blow up before 2023, I wouldn’t have guessed FTX.
- knorker 4y agoI'm curious about when you thought it was anything else? I don't think this will affect its reputation noticeably. Which demographic is going to be turned off by this? The regular public won't hear about this. the FIRE investor people basically seem to use a percentage as a lottery ticket. Wall Street I would hope already saw the consistent story. Is it hard core blockchain people, who knew of all the other crashed parties, but thought surely that's all behind us for the big players, having grown up now? But then nothing seems to faze them. Maybe the whales who don't actually care about blockchain, but were sold angel investor status? Yeah, possibly.
- grammers 4y agoCrypto is a ponzy scheme and always has been. The FTX disaster is just another sign of this.
- dmichulke 4y agoFor comparison - a regulated traditional finance entity: On October 31, 2011, MF Global executives admitted that transfer of $700 million from customer accounts to the broker-dealer and a loan of $175 million in customer funds to MF Global's U.K. subsidiary to cover (or mask) liquidity shortfalls at the company occurred on October 28, 2011. https://en.wikipedia.org/wiki/MF_Global https://en.wikipedia.org/wiki/MF_Global
- YossarianFrPrez 4y agoOne key difference is the following: > In January 2013, a judge approved a settlement that would return 93 percent of customers' investments, with the prospect of additional payouts from the company's general estate.
- EdwardDiego 4y agoIs this "whataboutism"? And if so, what's your point precisely? I don't think anyone has ever claimed that financial malfeasance is impossible in traditional banking entities.
- austhrow743 4y agoI’m not seeing anything about a hack
- chatterhead 4y agoAbsolutely bullshit. Fried's parents are helping him build a defense against jail time for breach of fiduciary duty and embezzlement while his team coincidentally gets "hacked". Hacks are quickly becoming strategic fail-safes against corporate incompetence and useful as backroom data sales. The promise of cryptographic currency was that we have the power. These exchanges by design sap that power for a promise that now seems illusionary at best and a massive liability at worst. FINRA and the SEC need to charge Fried and his executive team immediately and begin the process of tearing apart that exchange.
- pbourke 4y ago> The promise of cryptographic currency was that we have the power. As usual, we don’t. The question is, do you want the power to be in a condo in the Bahamas or in a building with the company’s logo on it, within walking distance of the SEC and SDNY?
- smoldesu 4y agoWell, if you take the exchanges away nobody has access to convenient liquidity. It's unlikely that mainstream cryptocurrency will have a future after we've seen so many failures at such a large scale.
- paulpauper 4y agoHow is $ftt still at $2? What will happen to it in bankruptcy proceedings? $2 is still higher than it was in 2019.
- adam_arthur 4y agoThe fact that it’s not 0 is kind of amazing. Demonstrates the vast ignorance of most in the crypto space
- yalogin 4y agoDoes anyone know what the state of fintech is now? Haven’t heard much about them. There are a lot of companies like chime that received investments but not sure how much they can survive in a downturn
- usednet 4y agoDeleted - Recent developments proved me wrong.
- cheeze 4y agoGo for it.
- paulpauper 4y agoCrypto's performance is worse than even banking/housing stocks in 2008. No end in sight to the selling. People are blaming FTX, when it more likely crypto was going to keep falling anyway as the fad/bubble bursts. FTX is just more salt on the wound. BTC was already down 70% YOY when FTX failed. S&P 500 and Nasdaq up huge this week. I dunno why anyone would waste their time with crypto anyway when far superior investments exist.
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- ojr 4y agoprice of bitcoin since 2009 doing fine
- paulpauper 4y agoThere have been so many hacks over the past 3 years. What happens to this money and the people behind it? Does it get mixed or stay dormant in the wallets forever? Few arrests, AFIK despite so much $ stolen. Except Bifinex 2016 hacker and Silk Road 2012 hacker.
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- 127 4y agoOrders of magnitude more compared to 2008. Only one person went to prison after that farce. At least with crypto there's some form of public ledger.
- 0xbadc0de5 4y agoPatrick Boyle breaks down the situation with his usual eloquence and dry humor. Video is worth watching just for the chart of the corporate structure. https://youtu.be/zTFhnpf-IE0 https://youtu.be/zTFhnpf-IE0
- photochemsyn 4y agoOver 130 companies referenced in the bankruptcy filing, and 'around 77 companies' in that organizational chart! The first thought is that's an optimal structure for a money laundering outfit, as if those companies are constantly transferring funds from one to the other, dirty money can be fed in to that system and then get lost in the mix, coming out as fairly clean on the other end. See Nick Kochan, "The Washing Machine": https://www.goodreads.com/en/book/show/21230193-the-washing-machine https://www.goodreads.com/en/book/show/21230193-the-washing-...
- staindk 4y agoThanks for the link! Very good video indeed and I'll have to look into some more of his videos. Very funny and well presented.
- raziel414 4y agoThat video is amazing. Thanks for sharing!
- anm89 4y agoIt's pretty astounding that there was essentially no volatility in crypto markets along with this. To the point of being fishy.
- qeternity 4y agoIt shouldn’t be astounding. The entire crypto market is controlled by a handful of powerful entities. It goes up when they want it to, and it goes down when they want it to. It crashes when they lose control, as they did earlier in the year. But at this point I don’t believe there’s enough riding on FTX that they’ve lost control again. FTX is a story of retail and normies getting rinsed. But that’s zero sum. Who do you think ended up on the other side of the equation? Those people are in a decent position.
- anm89 4y agoYeah, somehow, I don't think a yearlong 80-90% down is the choice of a cabal of all powerful overlords. I did forget to wrap my doorknobs in tinfoil today so maybe I'm just not thinking straight
- crypt1d 4y agoThis last week has been a rollercoaster. I've been in crypto since a long time ago and have seen quite a bit, but this FTX implosion takes the crown. And to be honest, I don't think its over.
- rvba 4y agoWhat is the difference between this, terraluna earlier this year or MTGox?
- crypt1d 4y agoLuna was quite bad, but it was pretty straight-forward path to death that everyone saw from a mile away. Not many people predicted that FTX and SBF will fall from grace within a timespan of 48hrs. The whole thing is also so full of scandals, theft and corruption we will be reading about this in the news for weeks to come. mtGox was so early in crypto, there wasn't any institutional capital or major players, mostly retail/regular folks experimenting with shiny new tech. FTX is an intermingled web of retail, institutions and big name investors as well as having their own investments, huge donations to politicians, lobbying arm, etc. The fallout from this will set us back for years.
- unboxingelf 4y agoI suspect this will be the catalyst for “regulation clarity”.
- willmadden 4y agoIt sure is interesting how they extended their tentacles into as many other companies and projects as possible (SBF even approached Elon about financing the Twitter acquisition) while knowing they were financing these deals with customer deposits, before blowing it up in the most spectacular way possible… I can’t imagine a series of actions that would be more destructive to the industry. The actions don’t make sense unless they were taken to maximize the potential fallout. The deep regulatory and political connections are also interesting…
- drummer 4y agoNot your keys, not your crypto. Never leave funds on exchanges. When will people learn?
- Gasp0de 4y agoFTX is just an exchange right? Any sensible person only puts funds into an exchange that they want to trade. Not your keys, not your crypto.
- sgt101 4y agoI think that they said they would pay 8% interest on your funds. Which I guess makes it quite attractive. A discord server I was on in the spring had people offering advice on how to get this... I just assumed it was a scam, perhaps other people weren't so cautious.
- Gasp0de 4y agoI mean it should be obvious that anyone who offers 8% interest has to do some high-risk stuff with your funds, right?
- plasticchris 4y agoNot always, I bonds were offering more earlier this year
- theturtletalks 4y agoI Bonds are an exception since everyone is capped at $10K and the rate changes quarterly based on inflation. BlockFi and other DeFi platforms were offering 8%, but had a minimum balance needed ($100K in most cases).
- colinmhayes 4y agoThe government is losing money on I bonds
- quickthrowman 4y agoI bonds are subsidized by the US Treasury (this is why there’s a purchase limit), which has never defaulted on its debt.
- edf13 4y agoIt’s interesting that we aren’t seeing a bigger crash in overall crypto prices - generally it’s holding up ok
- zeroclip 4y agoHopeful thinking: people realize that FTX is a CEX and the true value of crypto is in DeFi and DEXes. Reality: contagion will spread next week and everything will probably crash, even if DeFi remains unaffected.
- zeroclip 4y agoRestating my comment from Celsius unwinding one month ago: Three clear and obvious outcomes of this unwinding: 1. The crypto mantra "not your keys, not your coins" rings true. 2. Entrusting your personal financial data with a private company is sure to end in disaster, either by hack or court order. Privacy should be a basic and legally protected feature of blockchains. 3. Centralized Finance or CeFi is mostly a sham and deserves to be heavily regulated. Not to be confused with on-chain and transparent Decentralized Finance or DeFi platforms like Aave that have behaved predictably through this downturn, and have never required KYC. https://news.ycombinator.com/item?id=33153865 https://news.ycombinator.com/item?id=33153865 We haven’t seen privacy and KYC be an issue yet with FTX but data breach could be next after the money goes.
- maccard 4y ago> The crypto mantra "not your keys, not your coins" rings true. Until crypto has a workable solution to this that doesn't rely on me keeping paper copies of my master key in a safe, it's not really viable for the masses without exchanges like coinbase and co. > Entrusting your personal financial data with a private company is sure to end in disaster, either by hack or court order Hard disagree here. In all my years of interacting with private companies they have always protected my money, even when it was taken from me fraudulently. > Centralized Finance or CeFi is mostly a sham and deserves to be heavily regulated. I dunno, cefi works pretty well for me. Of course the difference is that the cefi institutes and private companies are regulated traditional banks. > Privacy should be a basic and legally protected feature of blockchains. For a decentralised system that touts it's benefits as not being tamperable, a legal protection is worthless. If we require legal protections for blockchains what value does that prove over a centralised regulated system? Also, as it's decentralised and privacy focused there's nothing stopping someone in a country with a different interpretation of "legal protection" being involved. >We haven’t seen privacy and KYC be an issue yet We absolutely have, with AML checks. Try cashing out 100k of crypto and using it as a deposit for a mortgage with a bank or lender, and see how open to it they are. This has been the case for at least 3-4 years here in the UK.
- zeroclip 4y ago
- Havoc 4y agoEven by crypto standards this is looking gnarly
- dools 4y agodang wants everyone to be thoughtful and curious with our comments. It’s absurd that anyone is still giving crypto anything but derision. It’s like someone posted a flat earth website and dang is like “hey let’s hear them out”. Forget about it.
- isoprophlex 4y agoI emphasize with what you're saying but... then just don't comment, and optionally flag the submission?
- someguydave 4y ago“crypto” includes all possible electronic money? Your sentiment is vapid and tiresome.
- fmajid 4y agoIs this like the people in Lebanon who have taken to robbing their banks to get their own money out?
- fumblebee 4y agoSurely it's not a coincidence that on the day FTX announces bankruptcy, this gigantic hack occurs? Some folks in this thread are speculating this might've been an inside job. I suspect, it's likelier that hackers had been aware of a vulnerability for some time, had a plan to drain these funds, but decided to hasten the timeline on the basis of the news FTX was going under.
- stephc_int13 4y agoFrom a technical standpoint, how difficult it is to hack your own company? What would you do, if you spent years building a Crypto/Ponzi scam and that you were the first to know that it was going to crumble? Let it go and face the consequences? Or try to save a few bucks knowing that you don't have much more to lose if it fails?
- michaericalribo 4y agoThere’s as much evidence for your theory as there is for GP’s
- stephc_int13 4y agoSure. But what would you do, in this context?
- spydum 4y agoif the coins are stolen or lost in some way, they cant be liquidated and thus shouldnt devalue the coin right? could reducing the availability actually be a way of preserving the market?
- HWR_14 4y agoI mean, the "inside job" theory seems to have more evidence, because as was pointed out hackers don't normally wait months to execute their attacks. And are more likely to use automation.
- 4y ago
- socialismisok 4y agoFrom what I understand, SBF described the product as a Ponzi scheme in so many words 6 months ago, yet somehow attracted more money than Enron. Now he's fled to Argentina, and people are are missing billions. Apparently he even had a custom client built that wouldn't trigger auditing. It never ceases to amaze that this story happens again and again.
- sgammon 4y agoThis is not true. You should edit it. Reuters has it that SBF is still in Nassau.
- danans 4y ago> Now he's fled to Argentina What is it about inflationary and socialist Argentina that would attract a cryptocurrency capitalist con artist? Do they have no extradition treaty?
- Animats 4y agoYes, the US and Argentina have an extradition treaty.[1] [1] https://www.state.gov/wp-content/uploads/2019/02/12866-Argentina-Law-Enforcement-Extradition-6.10.1997.pdf https://www.state.gov/wp-content/uploads/2019/02/12866-Argen...
- lizardactivist 4y agoIs it in the US government's interest to see FTX thrive, or to see it disappear? What about crypto currency in general?
- X6S1x6Okd1st 4y agoThe hacker has spent the last 11 hours slowky and incrementally converting all the various tokens they got to ETH. They've been using a variety of different defi exchange and have eaten large slippage fees, at least once over 5M lost in slippage. We're not seeing any else, e.g. laundering through another exchange, splitting into different accounts, automating the liquidation of tokens to ETH, off loading ETH into a cold wallet etc. The on chain activity makes this look like an individual who did not prepare extensively before doing this or doesn't have the skills to use automation/operational best practices EDIT: first outflows from 0x59abf3837fa962d6853b4cc0a19513aa031fd32b have started, they still haven't liquidated all their PAXG, a stable coin pegged to gold, unclear if it's freezable. They were able to liquidate all of their USDT except 4M on avalanche, and all of their usdc both of which can be frozen. Dai is a usd pegged stable coin that can't be frozen, they have nearly 1% of it. Note that Dai is heavily exposed to USDC so authorities could pressure USDC to destroy Dai
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- FollowingTheDao 4y agoCorporate theft is not a hacking.
- seretogis 4y agoWhen you say "corporate theft" are you referring to theft from corporations or theft by corporations? I'm not sure it's clear which is relevant here.
- grumple 4y agoVerrry skeptical. They get hacked the same week that they go under and face regulators? For apps to be compromised, that means a dev was involved, either knowingly or unknowingly. And as a dev, that unknowing part would be very hard, way more difficult when dealing with an app that handles so-called financial transactions. If something got in unaudited, that's also on the devs.
- xwdv 4y agoA private plane departed from the Bahamas yesterday with an unknown destination. Ultimately it landed in Argentina.
- derwiki 4y agoDo you have a link with more information?
- FollowingTheDao 4y agoCorporate theft is not a hack.
- abakker 4y agoSo, let’s assume that this hack is not meant to preserve money, but to destroy evidence. If you spread a lot of s** around and overwrite all this stuff with malware, does it create plausible deniability?
- jmount 4y agoIt has got to be an insider's improvised "plan B."
- wly_cdgr 4y ago11/11 was an inside job
- moneywoes 4y agoLikely insiders withdrawing funds
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- arithmetiqa 4y agoHonest question. How is it that the traditional banks stay comparatively secure from hacks and the crypto scene is an endlessly reporting the next big breach? Maybe the crypto exchanges should hire some bank security experts or at least adopt their best practices
- deleted 4y ago[deleted]
- adam_arthur 4y agoBecause the crypto firms are a handful of 20 something kids with 0 security background
- maxbond 4y agoI'd wager that it's because banks are able to reverse transactions, so even though there must be hackable banks out there (on account there being thousands of them), it must be incredibly difficult to monetize. Additionally, if you hack a crypto exchange it isn't clear that law enforcement will be all that interested. If you steal from a bank, or from the people who've made deposits at that bank, it's a different story. Lastly there's an infrastructure of coin laundries to facilitate crypto heists that's accessible to everyone, but in "tradfi" that infrastructure either doesn't exist or isn't generally available.
- blamazon 4y agoI forget who, but some human described crypto as speedrunning the past century or two of financial history, which seems apt. I think the traditional banks and regulators learned similarly hard lessons too, it was just mostly before I was born.
- sweetbitter 4y agoWell, you should consider what exactly would be hacked. Banks don't really hold huge amounts of gold or physical cash anymore, most of what they have is 'credit' and debt. Cryptographic currencies are not credit, they are the gold. They are what gold would be if it were easily divisible and could be transferred anywhere, instantly, for only several cents worth of transaction fees. Despite how quickly you can transfer cryptocurrencies, you could secure it as well as you physically secure gold if you really wanted to. The problem is that there are a bunch of businesses who are holding peoples' gold for them in such a way that bidirectional channels exist between front-end machines and back-end machines that have the private keys on them, and there is no regulation instructing these wannabe banks to perform cryptographic signatures on airgapped machines. It is as if Fort Knox were just leaving all of its entrances open.
- bogomipz 4y agoThe article states: >According to on-chain data, various Ethereum tokens as well as Solana and Binance Smart Chain tokens exited FTX's official wallets and moved to decentralized exchanges like 1inch. Both FTX and FTX US appear to be affected." Can someone say what the significance of moving these tokens to a decentralized exchange is? I'm guessing there's a strategic reason for doing so. Can someone explain what that it is if so?
- RadixDLT 4y agothis twitter post has more info: https://news.ycombinator.com/item?id=33571261 https://news.ycombinator.com/item?id=33571261
- tevon 4y agoThis is additionally a reminder that crypto currently holds a fairly irreconcilable catch-22. "Freezeable" tokens completely defeat the purpose of a decentralized currency. Why create nodes/verifiers etc if a wallet can be unilaterally frozen, either under pressure from gov't, community, or another entity. However NOT allowing freezeability allows for massive hacks, either by insiders, poor security, or sloppiness. Seems the solve is somewhere in the middle, a pool of trusted intermediaries.
- lupire 4y ago51% vote to freeze (by validators) is decentralized.
- jl2718 4y agoThis 51% number is not really relevant in blockchain consensus. There is Byzantine consensus, which derives from a specific set of assumptions, but those don't really apply. In reality, consensus is not at all a vote. Coinbase and Circle can accept a chain with only 1% validator support, and that will probably be the canonical chain. Apologies to the many blockchain economists and computer pseudo-scientists that spent the last decade on this, but Consensus is mostly an irrelevant concept. The good news is that new cryptographic primitives are there to fill the same role, and we're just getting started with that.
- jl2718 4y agoIt seems to me that validators aren't taking their sovereignty seriously. They are either following the exact suggested rules of the blockchain, or they are following the laws, but I have not seen the idealized consensus scenario where each node is soft-forking their rule-set to align with their own values. This was explicitly suggested in early discussions of bitcoin. There are three basic scenarios where a block participant may make a values judgement: 1. Including a transaction into a block 2. Block acceptance and propagation 3. Chain acceptance by the client Everything else is cryptographically locked, as in, a full-chain audit would reveal discrepancies, but these choices maintain internal consistency. You may hate this idea, but it is coming, and the default rule set will come from the jurisdictions. However, they will only have the power of transaction censorship by unanimous consent, total power of block censorship, and almost no control over chain censorship. I just had a half-baked idea: a chain that has the ability to hard-fork only in small differences, but essentially allows an infinite number of forks and merges in such a way that each transaction is valid if not explicitly invalid. In other words, a transaction fork does not invalidate the proof of an unrelated transaction that descends from the forked root hash. This would have to be a very different kind of hash/proof. Such a chain would greatly reduce the risk of rule modifications such as censoring transactions from an attacker, while also supporting the choice to use a chain without censorship, and enable reconciliation between the two.
- tevon 4y agoCan someone deeper in the space explain the series of transactions from "letssavecrypto.eth" to the FTX Drainer address? Seen here: https://etherscan.io/address/0xaa16547cdc32268542145d3401120399cc046fc5 https://etherscan.io/address/0xaa16547cdc32268542145d3401120... My guess is its a way to communicate a message via txn data.
- tevon 4y agoNevermind, looks like its an on-chain add for another crypto service. Haven't seen that before https://etherscan.io/tx/0x6bdd6c7d90c7f67223f7971745d5bc1f7b06c90c03e72c5bb688059c8a56570a https://etherscan.io/tx/0x6bdd6c7d90c7f67223f7971745d5bc1f7b... Text in utf-8: Check out Fringe Finance, fully decentralised/non custodial platform. It's very very important to support projects like Fringe if we don't want events like FTX to repeat. Do check :- https://www.coingecko.com/en/coins/fringe-finance https://www.coingecko.com/en/coins/fringe-finance Problem won't solve just by creating Fck FTX Token. We need to support Fully Decentralised and Non Custodial platform Fringe at any cost. Lend/Borrow/Stake/LP/Stable Coin/Collaterals etc etc Team has been burning midnight oil, putting their blood and sweat into this. Check website, Read mediums. This project can end centralised scams for ever. Let's save crypto and pledge no one ever gets burnt again. Support Decentralisation, Support Hardwork, Support Fringe Finance.
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- interleave 4y agoRelated to seeing mysterious outflows on ETH. I built a little tool that tracks the transaction networks of several top tokens. If anything: Highly entertaining, I see a LOT of weird stuff. It's called Pudding (because that's where the proof is) at https://alexisrondeau.me/pudding/ https://alexisrondeau.me/pudding/
- RadixDLT 4y agoman, everyone including major investment banks – everyone was talking about him (bankman-fried) like he's walking on water and has a zillion dollars.
- Havoc 4y agoIt's gonna be the guy that fixes the printer & its his first forray into crypto world
- deleted 4y ago[deleted]
- cokeandpepsi 4y agobetween this and twitter I'm smiling ear to ear, you love to see it
- hestefisk 4y agoAm I the only one who is worried about the potential identity theft that could emerge from the hack? Ftx would have documentation used for KYC checks for thousands of customers / users. Passports, social security etc. If the attacker is interested in more than siphoning out assets to secret wallets, this could get them more ugly. I have an Ftx account.
- fellellor 4y agoA cousin of mine, just a week ago proudly showed me his balance on FTX. He had earned close to 1 BTC through the various crypto consulting jobs he’d done this month. This was a huge deal for him as he’d been unemployed/underemployed for many years. And now this crap takes place. I’ve been unable to reach him since leading me to suspect that he has probably lost his money. I sincerely hope that is not the case but this entire fiasco breaks my heart. I hope SBF and his accomplices suffer and rot.
- fellellor 4y agoThis guy SBF has close links to China. Who knows maybe the Wang chap on his board is a CPC guy. It’s time to consider state involvement in this fiasco. Why ignore that possibility?
- mikestaub 4y agoWould issues like this even arise if it was all open-source and on-chain? I don't mean a DEX run by a DAO, I mean a Delaware C-corp with managers that simply makes every git commit public, maybe even their email servers. You could claim that this would be a competitive disadvantage but it might actually be a novel way to build a moat in this industry.
- jacksmith131313 4y agoThanks to via: Contact hacker wise @ g mail com. They were quite attentive to my circumstance and got me my money back. Excellent service. I have no hesitation in commending them to anyone else who has been scammed. A grateful client. If you have been through the same issue and know you got scammed, I strongly recommend their services.
- przeor 4y ago"I was initially a crypto skeptic, but after studying some of the more interesting crypto projects, I have come to believe that crypto can enable the formation of useful businesses and technologies that heretofore could not be created." The telephone, the internet, and crypto share one thing in common. Each technology improves on the next in terms of its ability to facilitate fraud. As such, I was initially a crypto skeptic, but after studying some of the more interesting crypto projects, I have come to - Bill Ackman (@BillAckman) November 20,