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And that's precisely why public ledgers are needed. These scammers are all going to be exposed thanks to people doing detective work. Meanwhile officials at t

And that's precisely why public ledgers are needed. These scammers are all going to be exposed thanks to people doing detective work. Meanwhile officials at the SEC and the CTFC were busy working on allowing regulatory capture to happen, which would have allowed FTX/BlockFi to be "regulated" entities, operating as "legit" exchanges. With BlockFi offering unrealistic APYs (supposedly not knowing the ongoing scams at Alameda Research). And FTX running a downright scam, fully knowing what was going on Alameda Research. (I'll give BlockFi the benefit of the doubt). And these crooks at FTX/Alameda and their greased officials were that close at succeeding. Pretending decentralized exchanges needed to be regulated out of existence, while putting daddy's friends' kids at the top of the crypto exchanges food chain, free to run their complete scams. Meanwhile legit centralized players like Coinbase (I take it they're legit) seems to be doing fine. So do decentralized exchanges like Uniswap. These guys were basically planning the next Enron, complete with deep ties high up in the administration (the SEC and CFTC are implicated in the ongoing scandal and have lots of explanation to do). But instead of focusing on that and how, precisely, public ledgers allowed to expose these crooks (and we may see officials falling: I hope we do for there are some who are obviously in it), let's instead, on HN, hate on crypto? I think a serious talk needs to be had here. We're talking about Bloomberg and Sequoia and many others presenting the biggest scammer since Enron as an altruistic white knight. I want excuses. And I certainly want decentralized cryptocurrencies to succeed now.

boppo1 4y ago
>the SEC and CFTC are implicated Do we have a hard paper trail? Not that I doubt it, but I know apologists who will and it would be nice to have more than 'Gensler took a class by the Alameda CEO's dad once". I sure hope someone who knows how to dig is working on connecting these dots and just being quiet about it. Because I haven't seen anything substantive and these regulators are going to get away with no one the wiser.
- TacticalCoder 4y ago
  Well Elon Musk just tweeted that because they all democrats nothing will happen during the current administration. It's very sad if there's not even an investigation but, as usual, it's likely that the crooks at the top are going to stay free. I'm not so sure however that they'll keep the exact same jobs. > Do we have a hard paper trail? Not that I doubt it, but I know apologists who will and it would be nice to have more than 'Gensler took a class by the Alameda CEO's dad once". They're all tied. The ex-CFTC commissioner (the one who just deleted his Twitter account) used to work with Gensler too. SBF's father is a well connected Stanford professor teaching tax laws and who's on air saying he's helping FTX with regulations. These guys obviously all know each other. It's more than just one coincidence. It's many coincidences. As a sidenote Stanford as been behind quite a few very interesting characters recently: Elizabeth Holmes, SBF, SBF's two parents (one of them being implicated for sure even though he'll surely claim he had no idea what is son was doing). Maybe it's time they were to teach integrity and ethics at Stanford? Oh, wait, someone posted here on HN that SBF's parents "are Stanford lawyers who specialize in compliance and ethics.". I'm not sure there won't be some cleaning done at both Stanford and the MIT even if these people aren't indicted. It's kinda bad looking on your institution when the head of the department of Economics happen to be the dad of the CEO of the biggest scam since Enron. It's also bad looking when your tax law teachers were helping the biggest scam get licenses to operate as regulated entities. Even if nobody goes to jail, who's ever going to look at these people with any ounce of respect?
AYBABTME 4y ago
> want decentralized cryptocurrencies But what for? I think for many of the rest of us, crypto continues to be a solution in need of a problem, and a field full of crooks in general. Even if it was without crooks, it would still seem like an extremely high risk proposition with tenuously far fetched value-add.
- evronm 4y ago
  Yeah, it really looks like that in the developed world. In the developing world, however, it solves some very real problems (think remittances), maybe not 100% effectively, but much better than what it's competing with.
  - _hcuq 4y ago
    Do you have evidence that crypto is widely used for remittances?
    - jedimind 4y ago
      How is that a relevant question? It's like asking if people really widely used credit cards for payments in the early days of their development. If you study the history of credit cards there are amusing stories likes companies even mailing credit cards to households (without their request) so they are encouraged to use them. So, the better question is: are upcoming technologies doing a better job and providing benefits older technologies can't deliver? There are many factors that I personally find very appealing, like credible neutrality of the infrastructure itself.
      - _hcuq 4y ago
        [flagged]
- zeroclip 4y ago
  A lot of those affected by FTX are traders, investors. Taking bets on market. Or dumbly using FTX as a place to park their tokens, instead of self custody or multisig.
cm2187 4y ago
Public ledger doesn't mean you know the identity of every holder of every wallet.
- zeroclip 4y ago
  But you can analyze funds and flows, this is how DeFi protocols works.
hotpotamus 4y ago
You can have public accountability without crypto. My local government publishes the salary of every employee for instance. You say that BlockFi was offering unrealistic APYs - I wonder how clear that was as a sign that something fishy was afoot. I actually lost $1.32 due to their closing, which I think reflects how much confidence I had in them as a customer.
- jl2718 4y ago
  You can't prove that they are telling the truth. Cryptography is the only tool I know of that gives you this ability.
  - hotpotamus 4y ago
    Wouldn't that mean that literally every exchange of value would need to take place on a publicly auditable blockchain? Even gifts/barter?
pa7x1 4y ago
HN commenters pretty often ask what is a good use case of blockchains or cryptocurrencies. Well, the failures you are seeing now are not in the blockchain native finance. They are failures of traditional finance in an unregulated industry. Celsius, BlockFi, Crypto.com, FTX... are corporations with opaque balance sheets operating in a poorly regulated sector. While all of that crap built on greed is imploding you have DeFi (short for decentralized finance, i.e. Finance primitives built on-chain) working just as intended and with 0 risk of contagion, by design. What we are seeing is once again that traditional final is very brittle and requires very strict regulation to hope nothing breaks, when not outright requiring to be saved by socializing the losses (2008). Blockchains solve this, they do. And we are seeing a magnificent stress test of it.
- cuteboy19 4y ago
  What defi provides is completely useless in 99% of cases. You need $4 to get a "loan" of $1 in DeFi. Who in the world needs such a loan? And of course such loans are ""safe"" because they are not loans at all.
  - pa7x1 4y ago
    > What defi provides is completely useless in 99% of cases. What DeFi provides are the foundations of a publicly verifiable financial system. So either you ascribe that financial systems are useless or that public verification is useless. For the first case I will refer you to the history of the Amsterdam Stock Exchange and the economic and welfare growth that it spurred, for the second one I will refer you to 2008 and what just happened with FTX. > You need $4 to get a "loan" of $1 in DeFi. Who in the world needs such a loan? Someone that needs 5 dollars? The specific numbers are irrelevant, in fact. They are just a consequence of whatever parameters are set to ensure the safety of the loan. If your question is why do we need to constraint in any margin collateral requirements, after everything that has happened during the last 20 years... I don't know what to say to you.

boppo1 4y ago

>the SEC and CFTC are implicated Do we have a hard paper trail? Not that I doubt it, but I know apologists who will and it would be nice to have more than 'Gensler took a class by the Alameda CEO's dad once". I sure hope someone who knows how to dig is working on connecting these dots and just being quiet about it. Because I haven't seen anything substantive and these regulators are going to get away with no one the wiser.

TacticalCoder 4y ago
Well Elon Musk just tweeted that because they all democrats nothing will happen during the current administration. It's very sad if there's not even an investigation but, as usual, it's likely that the crooks at the top are going to stay free. I'm not so sure however that they'll keep the exact same jobs. > Do we have a hard paper trail? Not that I doubt it, but I know apologists who will and it would be nice to have more than 'Gensler took a class by the Alameda CEO's dad once". They're all tied. The ex-CFTC commissioner (the one who just deleted his Twitter account) used to work with Gensler too. SBF's father is a well connected Stanford professor teaching tax laws and who's on air saying he's helping FTX with regulations. These guys obviously all know each other. It's more than just one coincidence. It's many coincidences. As a sidenote Stanford as been behind quite a few very interesting characters recently: Elizabeth Holmes, SBF, SBF's two parents (one of them being implicated for sure even though he'll surely claim he had no idea what is son was doing). Maybe it's time they were to teach integrity and ethics at Stanford? Oh, wait, someone posted here on HN that SBF's parents "are Stanford lawyers who specialize in compliance and ethics.". I'm not sure there won't be some cleaning done at both Stanford and the MIT even if these people aren't indicted. It's kinda bad looking on your institution when the head of the department of Economics happen to be the dad of the CEO of the biggest scam since Enron. It's also bad looking when your tax law teachers were helping the biggest scam get licenses to operate as regulated entities. Even if nobody goes to jail, who's ever going to look at these people with any ounce of respect?

AYBABTME 4y ago

> want decentralized cryptocurrencies But what for? I think for many of the rest of us, crypto continues to be a solution in need of a problem, and a field full of crooks in general. Even if it was without crooks, it would still seem like an extremely high risk proposition with tenuously far fetched value-add.

evronm 4y ago
Yeah, it really looks like that in the developed world. In the developing world, however, it solves some very real problems (think remittances), maybe not 100% effectively, but much better than what it's competing with.
- _hcuq 4y ago
  Do you have evidence that crypto is widely used for remittances?
  - jedimind 4y ago
    How is that a relevant question? It's like asking if people really widely used credit cards for payments in the early days of their development. If you study the history of credit cards there are amusing stories likes companies even mailing credit cards to households (without their request) so they are encouraged to use them. So, the better question is: are upcoming technologies doing a better job and providing benefits older technologies can't deliver? There are many factors that I personally find very appealing, like credible neutrality of the infrastructure itself.
    - _hcuq 4y ago
      [flagged]
zeroclip 4y ago
A lot of those affected by FTX are traders, investors. Taking bets on market. Or dumbly using FTX as a place to park their tokens, instead of self custody or multisig.

cm2187 4y ago

Public ledger doesn't mean you know the identity of every holder of every wallet.

zeroclip 4y ago
But you can analyze funds and flows, this is how DeFi protocols works.

hotpotamus 4y ago

You can have public accountability without crypto. My local government publishes the salary of every employee for instance. You say that BlockFi was offering unrealistic APYs - I wonder how clear that was as a sign that something fishy was afoot. I actually lost $1.32 due to their closing, which I think reflects how much confidence I had in them as a customer.

jl2718 4y ago
You can't prove that they are telling the truth. Cryptography is the only tool I know of that gives you this ability.
- hotpotamus 4y ago
  Wouldn't that mean that literally every exchange of value would need to take place on a publicly auditable blockchain? Even gifts/barter?

pa7x1 4y ago

HN commenters pretty often ask what is a good use case of blockchains or cryptocurrencies. Well, the failures you are seeing now are not in the blockchain native finance. They are failures of traditional finance in an unregulated industry. Celsius, BlockFi, Crypto.com, FTX... are corporations with opaque balance sheets operating in a poorly regulated sector. While all of that crap built on greed is imploding you have DeFi (short for decentralized finance, i.e. Finance primitives built on-chain) working just as intended and with 0 risk of contagion, by design. What we are seeing is once again that traditional final is very brittle and requires very strict regulation to hope nothing breaks, when not outright requiring to be saved by socializing the losses (2008). Blockchains solve this, they do. And we are seeing a magnificent stress test of it.

cuteboy19 4y ago
What defi provides is completely useless in 99% of cases. You need $4 to get a "loan" of $1 in DeFi. Who in the world needs such a loan? And of course such loans are ""safe"" because they are not loans at all.
- pa7x1 4y ago
  > What defi provides is completely useless in 99% of cases. What DeFi provides are the foundations of a publicly verifiable financial system. So either you ascribe that financial systems are useless or that public verification is useless. For the first case I will refer you to the history of the Amsterdam Stock Exchange and the economic and welfare growth that it spurred, for the second one I will refer you to 2008 and what just happened with FTX. > You need $4 to get a "loan" of $1 in DeFi. Who in the world needs such a loan? Someone that needs 5 dollars? The specific numbers are irrelevant, in fact. They are just a consequence of whatever parameters are set to ensure the safety of the loan. If your question is why do we need to constraint in any margin collateral requirements, after everything that has happened during the last 20 years... I don't know what to say to you.