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Before or after they were bribing politicians for favourable regulation for FTX at the detriment of their competitors who were not fraudulent? https://prospect

Before or after they were bribing politicians for favourable regulation for FTX at the detriment of their competitors who were not fraudulent? https://prospect.org/power/sam-bankman-frieds-multimillion-dollar-game/ https://prospect.org/power/sam-bankman-frieds-multimillion-d... > Crypto’s supporters in Congress are determined to ignore the massive gap in capacity between the two agencies; in fact, they likely understand that its incapacity is part of its appeal to FTX. A bill proposed by Sens. Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) seeks to grant the CFTC “exclusive jurisdiction over any agreement, contract, or transaction involving a contract of sale of a digital asset that is offered, solicited, traded, executed, or otherwise dealt in interstate commerce, including market activities relating to ancillary assets.” Perhaps in anticipation of such a move, FTX has stocked up its ranks with former CFTC officials. Former CFTC commissioner and acting chair Mark Wetjen is FTX’s head of policy and regulatory strategy. Ryne Miller, who was legal counsel to Gensler when he led the CFTC, is FTX’s general counsel. The Tech Transparency Project has also identified 14 other cases of CFTC alumni revolving into the crypto industry. Vote these people out.

SkyMarshal 4y ago
Well FTX's competitors are not necessarily not fraudulent, especially their primary competitor Binance.
- Semaphor 4y ago
  What fraud does Binance do besides evading U.S. regulations? note: This is an actual question.
  - perlgeek 4y ago
    If the story goes like FTX, we'll only know after it's too late. Not being incorporated anywhere (which is the last thing I heard about the matter) is an extremely bright red flag, so that's some evidence (in the Bayesian sense) that something is off.
  - xiphias2 4y ago
    I'm sure they are doing (or at least were doing) fractional reserve banking as well. They have their own token just like FTX, wihch is a bad sign. Maybe right now they are working on fixing it. Kraken is one of the few exchanges that provide proof of reserves, which is basically just a Merkel tree of all user assets which users can use to check that the exchange holds their money. This is not just trivial to implement, there are open source implementations that exchanges could just use and prefer not to.
    - Semaphor 4y ago
      This is pretty cool [0] is the Kraken page, at [1] someone collected both background information, links, and PoR entities, and finally a 2014 post of Kraken’s first PoR audit [2]. [0] https://www.kraken.com/proof-of-reserves https://www.kraken.com/proof-of-reserves [1] https://niccarter.info/proof-of-reserves/ https://niccarter.info/proof-of-reserves/ [2] https://bitcointalk.org/index.php?topic=528432.0 https://bitcointalk.org/index.php?topic=528432.0 Edit: And here is CZ of Binance claiming they’ll do it soon as well: https://nitter.kavin.rocks/cz_binance/status/1590055819416330240 https://nitter.kavin.rocks/cz_binance/status/159005581941633...
      - Yizahi 4y ago
        Have you read Kraken's own page about that? Here is a quote: "The results of our most recent audit were once again verified by top-25 global accounting firm, Armanino LLP. " (1) So from this I read that Kraken has done audit themselves and then some other firm has verified it. This (if true) is called attestation, and not audit. Attestations are an empty claim with no proof in the tokenbro industry. And second issue I see (directly related to the first) - they list some tokens they are auditing. Auditing on chain. But what if the Kraken company has a completely off the chain liabilities? Like a contract where they loan money/btc to some shady person and get some worthless tokens as a collateral in return. You can't see this on chain, only a real independent audit can uncover such things. (1) https://blog.kraken.com/post/15002/kraken-proof-of-reserves-audit-expands-to-include-five-new-assets/ https://blog.kraken.com/post/15002/kraken-proof-of-reserves-...
  - anonymoushn 4y ago
    Binance regularly closes deposits or delays deposits by hours in an apparent attempt to allocate arb opportunities to their internal trading desk instead of customers. For example, in May, we sent some LUNA to Binance whole the chain was working perfectly, then waited several hours whole chatting "VIP support" about the delay while they told some implausible lies about multi-hour internal network latency (????).
- wweeeebb 4y ago
  This is a false equivalence. FTX stole customer deposits and lied about it, to the tune of billions of dollars.
- largepeepee 4y ago
  Ironically Binance's low trust makes their users especially diligent about on and off boarding their funds. Their model is closer to DeFi than their competitors who are CeFi Besides what makes FTX especially trendy to cover was how he targeted mostly American, supposedly sophisticated SV VC types. He got funded by dozens of billionaires. Funny enough SBF openly described his cynical scam months ago, explaining both how shit coins and greedy VCs operated.
  - bondarchuk 4y ago
    >* Their model is closer to DeFi than their competitors who are CeFi* CeFi is CeFi, Binance is CeFi.
- flanked-evergl 4y ago
  Vote out the politicians who are not prosecuting Binance then also. Not sure how two wrongs make it okay that FTX were ghost writing crypto regulation [1]. [1]: https://coingeek.com/ftx-sam-bankman-fried-pens-crypto-regulation-for-dummies/ https://coingeek.com/ftx-sam-bankman-fried-pens-crypto-regul...
howmayiannoyyou 4y ago
Nobody will be voted out. You cannot get elected without cash, but if you do then you can't remain in office without it. You also won't influence legislation without money in your campaign or PAC wallets. If HN users want to impact policy and legislation, its not happening without donating a lot of money (or to a limited extent time) en masse to lobbyists and institutes that believe in whatever it is you believe in. Better to be slapped with the truth, than kissed with a lie, and having worked in politics, this is the truth.
- nisegami 4y ago
  I've wondered a lot about a hypothetical scenario where people organize and crowdfund a pool of money with the intent of disbursing it to anyone who votes for the legislation they want. For example, vote to codify Roe and you can get a slice of the pie. It's almost surely explicitly illegal though, but the absurdly wealthy are already playing this game, why can't we do it too?
  - pge 4y ago
    Isn't this essentially what a PAC is?
    - nisegami 4y ago
      My understanding is that a PAC can pay for advertising and campaign costs but I'm suggesting literally just giving it to them, straight to their bank account.
      - pjc50 4y ago
        You've got to launder it a little bit to make it look respectable.
      - danaris 4y ago
        I'm not particularly well-versed on the relevant statutes, but I strongly suspect that that would make it bribery.
williamcotton 4y ago
If the cup is half empty it's called bribing. Otherwise it's called lobbying. I don't know anything about the CFTC in particular but I'm familiar with the general idea of lobbying and the role it plays in a representative government. Elected officials have to interface with basically every industry in the country. How is any specific representative in a legislature going to have the knowledge required to vote on a banking act? Or a bill pertaining to power plants? Or cryptocurrencies? Does it make sense to allow representatives from various industries access to members of the legislative branches of government? How else could Cynthia Lummis or Kirsten Gillibrand make an informed decision when writing federal laws related to cryptocurrencies? Should there be federal laws related to cryptocurrencies? Should legislatures have a government regulatory agency that enforces federal laws? Who is going to write those laws? Should there be a federal agency like the SEC, but specifically for cryptocurrency? Is that the CFTC? Who should make up the CFTC? Who should make up the SEC? Are the people who are qualified to work for industry more or less qualified to work in the agency that regulates the industry? Who is best qualified to lobby for the industry? For the people who work for the regulatory agencies or lobby for industry, are they owners or laborers in the regulated industry? What if everyone at least wrote their name down on a big public list and said who they worked for and published when they met and who from which government position they met with? Are there easy answers to these questions? How the hell has any of this ever worked?
- deleted 4y ago
  [deleted]
- Stranger43 4y ago
  The problem is not with industry insiders leaving private enterprise to go work for the government, the problem is government regulators leaving the government to collect large paychecks from the companies they used to be tasked with regulating, i.e. that there is the appearance of personal benefits to regulate to the benefits of future employers rather then the general public. What's actually needed is government agencies staffed with industry insiders who knows that they will never ever work in the industry again and have nothing to loose from putting the general public first, but this is kind of hard to do when government work is not seen as something of particularly high status, where people go for self realization after a success career in the private sector.
nova22033 4y ago
FTX has stocked up its ranks with former CFTC officials This is regulatory capture. If you think it's bad for crypto, wait till you see how bad it is for the agencies that approve our drugs.
- deleted 4y ago
  [deleted]
- throwaway82635 4y ago
  Much of the regulation of CFTC-regulated entities is done through the NFA, and the NFA committees look like this: https://www.nfa.futures.org/about/committees/index.html https://www.nfa.futures.org/about/committees/index.html The influence of the regulated companies is entirely transparent.
jpadkins 4y ago
If voting changed anything, they'd make it illegal. https://coinpedia.org/crypto-live-news/ftx-ceo-in-connection-with-sec-chair-gary-gensler/ https://coinpedia.org/crypto-live-news/ftx-ceo-in-connection... https://www.foxbusiness.com/markets/sec-chairman-gary-gensler-met-with-head-ftx-months-before-collapse https://www.foxbusiness.com/markets/sec-chairman-gary-gensle... https://twitter.com/bof_tob/status/1592247076100112385/photo/1 https://twitter.com/bof_tob/status/1592247076100112385/photo... https://twitter.com/jchervinsky/status/1592173682687938560 https://twitter.com/jchervinsky/status/1592173682687938560 https://twitter.com/SenLummis/status/1592212987259281408 https://twitter.com/SenLummis/status/1592212987259281408 This is speculation, but this is starting to fit the classic playbook of: 1) Create / seize a crisis 2) Have new regulation already ready to "address" crisis (using voter outrage to pass under rushed conditions) 3) Incrementally increase regulatory control (regulatory capture) 4) profit / increase power concentration In this case, it's clear they are trying to establish CFTC control of eth & btc.

SkyMarshal 4y ago

Well FTX's competitors are not necessarily not fraudulent, especially their primary competitor Binance.

Semaphor 4y ago
What fraud does Binance do besides evading U.S. regulations? note: This is an actual question.
- perlgeek 4y ago
  If the story goes like FTX, we'll only know after it's too late. Not being incorporated anywhere (which is the last thing I heard about the matter) is an extremely bright red flag, so that's some evidence (in the Bayesian sense) that something is off.
- xiphias2 4y ago
  I'm sure they are doing (or at least were doing) fractional reserve banking as well. They have their own token just like FTX, wihch is a bad sign. Maybe right now they are working on fixing it. Kraken is one of the few exchanges that provide proof of reserves, which is basically just a Merkel tree of all user assets which users can use to check that the exchange holds their money. This is not just trivial to implement, there are open source implementations that exchanges could just use and prefer not to.
  - Semaphor 4y ago
    This is pretty cool [0] is the Kraken page, at [1] someone collected both background information, links, and PoR entities, and finally a 2014 post of Kraken’s first PoR audit [2]. [0] https://www.kraken.com/proof-of-reserves https://www.kraken.com/proof-of-reserves [1] https://niccarter.info/proof-of-reserves/ https://niccarter.info/proof-of-reserves/ [2] https://bitcointalk.org/index.php?topic=528432.0 https://bitcointalk.org/index.php?topic=528432.0 Edit: And here is CZ of Binance claiming they’ll do it soon as well: https://nitter.kavin.rocks/cz_binance/status/1590055819416330240 https://nitter.kavin.rocks/cz_binance/status/159005581941633...
    - Yizahi 4y ago
      Have you read Kraken's own page about that? Here is a quote: "The results of our most recent audit were once again verified by top-25 global accounting firm, Armanino LLP. " (1) So from this I read that Kraken has done audit themselves and then some other firm has verified it. This (if true) is called attestation, and not audit. Attestations are an empty claim with no proof in the tokenbro industry. And second issue I see (directly related to the first) - they list some tokens they are auditing. Auditing on chain. But what if the Kraken company has a completely off the chain liabilities? Like a contract where they loan money/btc to some shady person and get some worthless tokens as a collateral in return. You can't see this on chain, only a real independent audit can uncover such things. (1) https://blog.kraken.com/post/15002/kraken-proof-of-reserves-audit-expands-to-include-five-new-assets/ https://blog.kraken.com/post/15002/kraken-proof-of-reserves-...
- anonymoushn 4y ago
  Binance regularly closes deposits or delays deposits by hours in an apparent attempt to allocate arb opportunities to their internal trading desk instead of customers. For example, in May, we sent some LUNA to Binance whole the chain was working perfectly, then waited several hours whole chatting "VIP support" about the delay while they told some implausible lies about multi-hour internal network latency (????).
wweeeebb 4y ago
This is a false equivalence. FTX stole customer deposits and lied about it, to the tune of billions of dollars.
largepeepee 4y ago
Ironically Binance's low trust makes their users especially diligent about on and off boarding their funds. Their model is closer to DeFi than their competitors who are CeFi Besides what makes FTX especially trendy to cover was how he targeted mostly American, supposedly sophisticated SV VC types. He got funded by dozens of billionaires. Funny enough SBF openly described his cynical scam months ago, explaining both how shit coins and greedy VCs operated.
- bondarchuk 4y ago
  >* Their model is closer to DeFi than their competitors who are CeFi* CeFi is CeFi, Binance is CeFi.
flanked-evergl 4y ago
Vote out the politicians who are not prosecuting Binance then also. Not sure how two wrongs make it okay that FTX were ghost writing crypto regulation [1]. [1]: https://coingeek.com/ftx-sam-bankman-fried-pens-crypto-regulation-for-dummies/ https://coingeek.com/ftx-sam-bankman-fried-pens-crypto-regul...

howmayiannoyyou 4y ago

Nobody will be voted out. You cannot get elected without cash, but if you do then you can't remain in office without it. You also won't influence legislation without money in your campaign or PAC wallets. If HN users want to impact policy and legislation, its not happening without donating a lot of money (or to a limited extent time) en masse to lobbyists and institutes that believe in whatever it is you believe in. Better to be slapped with the truth, than kissed with a lie, and having worked in politics, this is the truth.

nisegami 4y ago
I've wondered a lot about a hypothetical scenario where people organize and crowdfund a pool of money with the intent of disbursing it to anyone who votes for the legislation they want. For example, vote to codify Roe and you can get a slice of the pie. It's almost surely explicitly illegal though, but the absurdly wealthy are already playing this game, why can't we do it too?
- pge 4y ago
  Isn't this essentially what a PAC is?
  - nisegami 4y ago
    My understanding is that a PAC can pay for advertising and campaign costs but I'm suggesting literally just giving it to them, straight to their bank account.
    - pjc50 4y ago
      You've got to launder it a little bit to make it look respectable.
    - danaris 4y ago
      I'm not particularly well-versed on the relevant statutes, but I strongly suspect that that would make it bribery.

williamcotton 4y ago

If the cup is half empty it's called bribing. Otherwise it's called lobbying. I don't know anything about the CFTC in particular but I'm familiar with the general idea of lobbying and the role it plays in a representative government. Elected officials have to interface with basically every industry in the country. How is any specific representative in a legislature going to have the knowledge required to vote on a banking act? Or a bill pertaining to power plants? Or cryptocurrencies? Does it make sense to allow representatives from various industries access to members of the legislative branches of government? How else could Cynthia Lummis or Kirsten Gillibrand make an informed decision when writing federal laws related to cryptocurrencies? Should there be federal laws related to cryptocurrencies? Should legislatures have a government regulatory agency that enforces federal laws? Who is going to write those laws? Should there be a federal agency like the SEC, but specifically for cryptocurrency? Is that the CFTC? Who should make up the CFTC? Who should make up the SEC? Are the people who are qualified to work for industry more or less qualified to work in the agency that regulates the industry? Who is best qualified to lobby for the industry? For the people who work for the regulatory agencies or lobby for industry, are they owners or laborers in the regulated industry? What if everyone at least wrote their name down on a big public list and said who they worked for and published when they met and who from which government position they met with? Are there easy answers to these questions? How the hell has any of this ever worked?

deleted 4y ago
[deleted]
Stranger43 4y ago
The problem is not with industry insiders leaving private enterprise to go work for the government, the problem is government regulators leaving the government to collect large paychecks from the companies they used to be tasked with regulating, i.e. that there is the appearance of personal benefits to regulate to the benefits of future employers rather then the general public. What's actually needed is government agencies staffed with industry insiders who knows that they will never ever work in the industry again and have nothing to loose from putting the general public first, but this is kind of hard to do when government work is not seen as something of particularly high status, where people go for self realization after a success career in the private sector.

nova22033 4y ago

FTX has stocked up its ranks with former CFTC officials This is regulatory capture. If you think it's bad for crypto, wait till you see how bad it is for the agencies that approve our drugs.

deleted 4y ago
[deleted]
throwaway82635 4y ago
Much of the regulation of CFTC-regulated entities is done through the NFA, and the NFA committees look like this: https://www.nfa.futures.org/about/committees/index.html https://www.nfa.futures.org/about/committees/index.html The influence of the regulated companies is entirely transparent.

jpadkins 4y ago

If voting changed anything, they'd make it illegal. https://coinpedia.org/crypto-live-news/ftx-ceo-in-connection-with-sec-chair-gary-gensler/ https://coinpedia.org/crypto-live-news/ftx-ceo-in-connection... https://www.foxbusiness.com/markets/sec-chairman-gary-gensler-met-with-head-ftx-months-before-collapse https://www.foxbusiness.com/markets/sec-chairman-gary-gensle... https://twitter.com/bof_tob/status/1592247076100112385/photo/1 https://twitter.com/bof_tob/status/1592247076100112385/photo... https://twitter.com/jchervinsky/status/1592173682687938560 https://twitter.com/jchervinsky/status/1592173682687938560 https://twitter.com/SenLummis/status/1592212987259281408 https://twitter.com/SenLummis/status/1592212987259281408 This is speculation, but this is starting to fit the classic playbook of: 1) Create / seize a crisis 2) Have new regulation already ready to "address" crisis (using voter outrage to pass under rushed conditions) 3) Incrementally increase regulatory control (regulatory capture) 4) profit / increase power concentration In this case, it's clear they are trying to establish CFTC control of eth & btc.