5 ms·

This is a story of a corrupt CEO. The main crypto part of it is that FTT was seen as actual money on its balance sheets. This individual stealing people's mone

by andirk 4y ago

This is a story of a corrupt CEO. The main crypto part of it is that FTT was seen as actual money on its balance sheets. This individual stealing people's money sheds light on how regulations exist for a reason, especially when handling billions of USD. Doesn't really speak positively or poorly on cryptocurrency as a technology though.

ryanSrich 4y ago
BTC and ETH have held support considerably well through this. I think SBF backed shitcoins like SOL are probably in for a world of hurt. But overall, I don’t think these events do much damage to crypto in the long run.
ethbr0 4y ago
It speaks to the fact that in the absence of regulation, you get exactly what happened repeatedly in Eve Online -- people eventually get bored and/or things get tough, and then they decide it's easier to steal money. Banking regulations exist to counterbalance the personal incentive to abuse any authority you have and take off which what you can take. In the absence of regulations, everyone does exactly that... eventually.
- formerkrogemp 4y ago
  > In the absence of regulations, everyone does exactly that... eventually. Even with regulation we probably all have our number, our price.
snowwrestler 4y ago
THE big argument in favor of cryptocurrency as a concept was that it freed people to store and transact value without interference or oversight by governments and institutions. A big argument against cryptocurrency was that those governments and institutions had developed financial oversight for a reason.
- hailwren 4y ago
  There’s a weird false equivalence here. Whenever critics hear government oversight and interference, they immediately point to the governments that manage their currency relatively well and say “look, these governments do therefore no one needs to worry”. History and contemporary geopolitics are both littered with examples of governments that absolutely ruin their population’s lives with currency problems. What if it were possible to have consumer protection regulation and also remove some of the nasty side effects of government and institutional preference in monetary policy?
  - TomSwirly 4y ago
    And this is the idea behind crypto in a nutshell: "Some governments have been financially irresponsible in the past, so we need a tool to allow us to bypass all government regulations." However, the rest of us have a name for "bypassing government regulations" - we call it "crime". > What if it were possible to have consumer protection regulation and also remove some of the nasty side effects of government and institutional preference in monetary policy? "Crime, with extra steps".
    - lostmsu 4y ago
      > However, the rest of us have a name for "bypassing government regulations" - we call it "crime". Yeah, like hiding Jews during Holocaust was a capital offense. Pretty dumb argument.
      - danaris 4y ago
        Congratulations! You have managed to both post the same argument they just refuted ("some governments in the past were bad, therefore we need to be able to avoid all governments forever"), and invoke Godwin's Law at the same time! Pretty impressive, I'd say.
        lostmsu 4y ago
        > the same argument they just refuted They didn't refute the argument. They treated "crime" and "wrong" as an implication, and my Godwin invocation fits well to show it is absurd.
memish 4y ago
What he did is already illegal.
- andirk 4y ago
  Of course. Point is that regulatory oversight FEC/whatever would have likely seen issues with the books, and a definitely issue with that the CEO could just take all the moneys.
  - junofan 4y ago
    You’re setting yourself up for disappointment with that one. You just send them reporting forms, and then you get nailed for false entries after the fact.
chrisco255 4y ago
Some of those regulations make sense when crypto or any other asset is being custodied by another firm. But with crypto it is possible to self custody. Unfortunately, not enough people do it. Most of FTX's clientele were high-risk perpetuals traders. FTX had both a US and offshore location. US regulations do not apply to offshore entities. SBF's parents are financial compliance lawyers and Standord professors. His dad has gone in front of Congress to argue for various tax and compliance regulations. What SBF did was criminal fraud, and he was equipped with world class compliance advice and yet here we are. A brazen theft of billions of dollars by a risk-addicted, self-delusional altruist.
pdntspa 4y ago
Funny how, despite crypto bros' endless blather about freedom, people still willingly turn to centralized institutions with their crypto It seems they are learning the same lesson as the OG computer nerd power users: nontechnical people suck and they ruin everything for everyone. Making crypto easy-to-use was the beginning of its downfall.
- danans 4y ago
  > nontechnical people suck and they ruin everything for everyone. This is a naive conclusion to reach. "Non-technical" people are very much the reason that those who transact strictly in digital products and services can survive, not the other way around. Centralized institutions exist because the establishment of trust is essential to even the most basic of human societies. Yes, they can be abused to corrupt ends, but crypto clearly has the same problems, with the malfeasance often committed by "technical people" themselves.
  - pdntspa 4y ago
    I'm not so sure about that. Many products and services existed and can exist on smaller scale, and maybe that is the way things should stay. "The cloud" and all its numerous and vast expenses has inserted itself in our culture as "indispensable", but for many things operational costs can be dramatically lower if the user can be trusted to self-host and self-operate, as things once were. Yes the world would look dramatically different, it'd be more IRC/P2P than Slack/Youtube. But it would be a much better world where users are in control, and can do advanced things after skilling up in the appropriate area. I think that what is happening with Mastodon is a good example of what happens when the mainstream gets its hands on something that maybe it should learn about first. And the thing is, anyone can become technical. They just need to cross that knowledge barrier to entry. But our society, in all its dysfunctional ineptitude, has decided that this is "inaccessible," and that is evil because everyone should be able to fuck up everything at every time. Yet somehow the guilds of doctors and lawyers and engineers (and drivers of cars!) carry on.
TacticalCoder 4y ago
> This is a story of a corrupt CEO. The main crypto part of it is that FTT was seen as actual money on its balance sheets. The main crypto part is that it's the person who dictated the upcoming crypto exchange legislation. That corrupt CEO was greasing politicians (to the tune of $40m), was using an ex-CFTC commissioner to lobby a law regulating exchanges (which, by chance, would have made FTX legal and Binance and decentralized exchanges illegal) --ex-CFTC commissioner who just deleted his Twitter account by the way--, had nomimated has CEO of his Alameda Research fund the daughter of a colleague of the SEC's chair, etc. Here what a US congressman has to say about the SEC's chair: Interesting. @GaryGensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We're looking into this. Interesting indeed. There's much more to this story than: "we fucked up using leverage so we used a shitcoin of our creation as collateral to hide billions in losses". We're potentially talking about a little cabal trying to regulatory capture the cryptocurrency exchange market very likely with the intent to run an ever bigger scam.
- misiti3780 4y ago
  im not following this: "had nomimated has CEO of his Alameda Research fund the daughter of a colleague of the SEC's chair, etc." do you have a link ?
JeremyNT 4y ago
> Doesn't really speak positively or poorly on cryptocurrency as a technology though. Technology doesn't exist in a vacuum though, and the fact that so much of the ecosystem that sprung up around crypto is rotten is a hint that maybe the technology isn't all that useful. Crypto's nominal reason to exist is to have a way to transact without government oversight, but its popularity is due mostly to speculation and outright scams enabled by said lack of oversight.

by andirk 4y ago

ryanSrich 4y ago

BTC and ETH have held support considerably well through this. I think SBF backed shitcoins like SOL are probably in for a world of hurt. But overall, I don’t think these events do much damage to crypto in the long run.

ethbr0 4y ago

It speaks to the fact that in the absence of regulation, you get exactly what happened repeatedly in Eve Online -- people eventually get bored and/or things get tough, and then they decide it's easier to steal money. Banking regulations exist to counterbalance the personal incentive to abuse any authority you have and take off which what you can take. In the absence of regulations, everyone does exactly that... eventually.

formerkrogemp 4y ago
> In the absence of regulations, everyone does exactly that... eventually. Even with regulation we probably all have our number, our price.

snowwrestler 4y ago

THE big argument in favor of cryptocurrency as a concept was that it freed people to store and transact value without interference or oversight by governments and institutions. A big argument against cryptocurrency was that those governments and institutions had developed financial oversight for a reason.

hailwren 4y ago
There’s a weird false equivalence here. Whenever critics hear government oversight and interference, they immediately point to the governments that manage their currency relatively well and say “look, these governments do therefore no one needs to worry”. History and contemporary geopolitics are both littered with examples of governments that absolutely ruin their population’s lives with currency problems. What if it were possible to have consumer protection regulation and also remove some of the nasty side effects of government and institutional preference in monetary policy?
- TomSwirly 4y ago
  And this is the idea behind crypto in a nutshell: "Some governments have been financially irresponsible in the past, so we need a tool to allow us to bypass all government regulations." However, the rest of us have a name for "bypassing government regulations" - we call it "crime". > What if it were possible to have consumer protection regulation and also remove some of the nasty side effects of government and institutional preference in monetary policy? "Crime, with extra steps".
  - lostmsu 4y ago
    > However, the rest of us have a name for "bypassing government regulations" - we call it "crime". Yeah, like hiding Jews during Holocaust was a capital offense. Pretty dumb argument.
    - danaris 4y ago
      Congratulations! You have managed to both post the same argument they just refuted ("some governments in the past were bad, therefore we need to be able to avoid all governments forever"), and invoke Godwin's Law at the same time! Pretty impressive, I'd say.
      - lostmsu 4y ago
        > the same argument they just refuted They didn't refute the argument. They treated "crime" and "wrong" as an implication, and my Godwin invocation fits well to show it is absurd.

memish 4y ago

What he did is already illegal.

andirk 4y ago
Of course. Point is that regulatory oversight FEC/whatever would have likely seen issues with the books, and a definitely issue with that the CEO could just take all the moneys.
- junofan 4y ago
  You’re setting yourself up for disappointment with that one. You just send them reporting forms, and then you get nailed for false entries after the fact.

chrisco255 4y ago

Some of those regulations make sense when crypto or any other asset is being custodied by another firm. But with crypto it is possible to self custody. Unfortunately, not enough people do it. Most of FTX's clientele were high-risk perpetuals traders. FTX had both a US and offshore location. US regulations do not apply to offshore entities. SBF's parents are financial compliance lawyers and Standord professors. His dad has gone in front of Congress to argue for various tax and compliance regulations. What SBF did was criminal fraud, and he was equipped with world class compliance advice and yet here we are. A brazen theft of billions of dollars by a risk-addicted, self-delusional altruist.

pdntspa 4y ago

Funny how, despite crypto bros' endless blather about freedom, people still willingly turn to centralized institutions with their crypto It seems they are learning the same lesson as the OG computer nerd power users: nontechnical people suck and they ruin everything for everyone. Making crypto easy-to-use was the beginning of its downfall.

danans 4y ago
> nontechnical people suck and they ruin everything for everyone. This is a naive conclusion to reach. "Non-technical" people are very much the reason that those who transact strictly in digital products and services can survive, not the other way around. Centralized institutions exist because the establishment of trust is essential to even the most basic of human societies. Yes, they can be abused to corrupt ends, but crypto clearly has the same problems, with the malfeasance often committed by "technical people" themselves.
- pdntspa 4y ago
  I'm not so sure about that. Many products and services existed and can exist on smaller scale, and maybe that is the way things should stay. "The cloud" and all its numerous and vast expenses has inserted itself in our culture as "indispensable", but for many things operational costs can be dramatically lower if the user can be trusted to self-host and self-operate, as things once were. Yes the world would look dramatically different, it'd be more IRC/P2P than Slack/Youtube. But it would be a much better world where users are in control, and can do advanced things after skilling up in the appropriate area. I think that what is happening with Mastodon is a good example of what happens when the mainstream gets its hands on something that maybe it should learn about first. And the thing is, anyone can become technical. They just need to cross that knowledge barrier to entry. But our society, in all its dysfunctional ineptitude, has decided that this is "inaccessible," and that is evil because everyone should be able to fuck up everything at every time. Yet somehow the guilds of doctors and lawyers and engineers (and drivers of cars!) carry on.

TacticalCoder 4y ago

> This is a story of a corrupt CEO. The main crypto part of it is that FTT was seen as actual money on its balance sheets. The main crypto part is that it's the person who dictated the upcoming crypto exchange legislation. That corrupt CEO was greasing politicians (to the tune of $40m), was using an ex-CFTC commissioner to lobby a law regulating exchanges (which, by chance, would have made FTX legal and Binance and decentralized exchanges illegal) --ex-CFTC commissioner who just deleted his Twitter account by the way--, had nomimated has CEO of his Alameda Research fund the daughter of a colleague of the SEC's chair, etc. Here what a US congressman has to say about the SEC's chair: Interesting. @GaryGensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We're looking into this. Interesting indeed. There's much more to this story than: "we fucked up using leverage so we used a shitcoin of our creation as collateral to hide billions in losses". We're potentially talking about a little cabal trying to regulatory capture the cryptocurrency exchange market very likely with the intent to run an ever bigger scam.

misiti3780 4y ago
im not following this: "had nomimated has CEO of his Alameda Research fund the daughter of a colleague of the SEC's chair, etc." do you have a link ?

JeremyNT 4y ago

> Doesn't really speak positively or poorly on cryptocurrency as a technology though. Technology doesn't exist in a vacuum though, and the fact that so much of the ecosystem that sprung up around crypto is rotten is a hint that maybe the technology isn't all that useful. Crypto's nominal reason to exist is to have a way to transact without government oversight, but its popularity is due mostly to speculation and outright scams enabled by said lack of oversight.