13 ms·
Maybe this is a stupid question, but how? Was the Bahamas' SEC holding its own copies of FTX's keys? I thought the entire point of these schemes was that this k
by woodruffw 4y ago
Maybe this is a stupid question, but how? Was the Bahamas' SEC holding its own copies of FTX's keys? I thought the entire point of these schemes was that this kind of seizure-by-force wasn't possible (absent exploits or insiders).
- gruez 4y ago>absent exploits or insiders Insiders can be press ganged with threats of violence, which the state has a monopoly on.
- woodruffw 4y agoI had assumed that they had some kind of obtuse M of N scheme with no sufficient number of parties in the same place at once, but that was perhaps too optimistic (?) of me.
- gruez 4y agoThat's can be pulled off, but actually requires planning and forethought to pull off. For instance, you'd want the keys to be on HSMs/hardware wallets in different jurisdictions (ideally rivals like US and Russia). Obviously this wasn't something they considered or planned for considering many (most?) of the higher ups were living in a shared penthouse in the Bahamas. Although, to be fair I don't fault them for not planning for this. If things get bad enough that men with guns are demanding you to do something, being able to reject their request would be pretty low on my list of priorities.
- ohbtvz 4y agoArmed government agents show up to your door asking you for half a billion dollars. You tell them "can't do it, I need this other key that's held by my partner in a different place". What do you think is going to happen next? "Understandable, have a good day" and they go home? Or they hold you in jail until you somehow find a way to comply?
- throwaway0x7E6 4y agobut that's the very purpose of such schemes, to render you unable to comply. if such an event happens in a more or less civilized country, you might eventually get some third party to confirm that you're unable to disclose the key
- uluyol 4y ago"Call your friend and convince them to hand over their key if you want out"
- throwaway0x7E6 4y ago"If I ever ask you for the key over the phone, play along and send me random bits and feign ignorance to my further requests"
- ohbtvz 4y agoWhat's your endgame here? Stay in jail with the satisfaction of knowing that the government didn't take the $500M and nobody can access them anymore?
- throwaway0x7E6 4y agoit's just how I'm picturing this scheme could work, not necessarily in FTX scenario
- milchek 4y agoExactly, and we have a recent example of this: "Mr Zhong pleaded guilty on 4 November to hacking the website and has forfeited his Bitcoin and assets to police as he awaits sentencing." https://news.yahoo.com/stolen-3bn-bitcoin-mystery-ends-170735362.html https://news.yahoo.com/stolen-3bn-bitcoin-mystery-ends-17073...
- woodruffw 4y agoAbsolutely the latter. My surprise comes more from FTX seemingly not even trying to do some kind of key protection scheme; it seems as though they made it easy for this seizure to happen. To my mind, this speaks large volumes about the quantity of misplaced confidence in these firms.
- spenczar5 4y agoAccording to some of the chapter 11 filings, the keys were stored in a shared email account with a shared password for key employees. Yeah.
- woodruffw 4y agoThat's not the secret sharing Shamir had in mind!
- saagarjha 4y agoYou think a state’s monopoly on violence is relevant when they’re beating you to steal cryptocurrency from you? Anyone off the street can do the same.
- mccorrinall 4y agoIf someone from the street does this there is a force called police which will help you. When the government does this, there is no one who will help you.
- anonymoushn 4y agoThe police will generally accept a police report and then laugh at you
- PlasticTank 4y agowhen the seconds count the police are only minutes away
- pdntspa 4y agoOh man, not in the rich, sunny SoCal city that I live in. Those princesses are still sore about that time we burned down one of their police stations in the BLM protests a few years ago. Like they refused to show up for a man stalking his ex and trying to break in, during daylight and in full view of everyone in the complex, and they continued to not show until after he murdered her.
- polygamous_bat 4y agoIt's never not gonna be funny watching "code is law" people find out that law is, indeed, law.
- aorloff 4y agoI'm assuming they walked over to the person holding the keys and handed them a court order.
- paulcole 4y agoWhy would you need to assume when there’s an article that has the answer?
- semiquaver 4y agoAccording to the article, they legally compelled SBF to provide access (he is AFAIK physically located there) > the U.S.-based bankruptcy administrators […] had “credible evidence” that officials in the Bahamas had directed FTX founder Sam Bankman-Fried to access FTX’s systems after the Chapter 11 filing, “for the purpose of obtaining digital assets of the debtors.”
- throwaway9980 4y agoGuns. Guns are how. Guns are how governments achieve their objectives. There is no crypto scheme, no algorithm, no possible arrangement of private keys and Merkle trees that can escape the reality of men with guns.
- 3a2d29 4y agoRelevant comic: https://xkcd.com/538/ https://xkcd.com/538/
- Petersipoi 4y agoAre you suggesting that the Bahamas infiltrated FTX with guns and took their keys?
- scq 4y agoNo. They just told FTX to transfer the money, and FTX complied.
- ceejayoz 4y agoNo, they're suggesting that SBF is in their jurisdiction, which gives them substantial "do what we say, or else" power.
- thrown_22 4y agoWe could call that problem something fancy like the Byzantine General Problem and try and figure out ways to solve it mathematically.
- deleted 4y ago[deleted]
- arcticbull 4y agoIt's the $5 wrench problem and unless you find a way to land adamantium bones, I suspect math won't help.
- koolba 4y agoThe keys to the local jail cells can unlock a lot of other doors as well.
- thallium205 4y agoIt says right in the article SBF did it himself because the government asked him to after declaring bankruptcy.
- deevolution 4y agoThe ol' wrench attach
- lost_tourist 4y agoI assume it's to get their bribe money before anyone else had a chance.
- hef19898 4y agoPropably not, the Bahamas have a financial safe haven reputation to preserve.
- parkingrift 4y agoSBF publicly lied about this and called it a hack. If it was all aboveboard why would he have done that?
- TheNorthman 4y agoYou're assuming SBF is a rational agent, which if he was, he wouldn't be in this position.
- parkingrift 4y agoSure, but that’s just handwaving away the question. He made an effort to reach out to a journalist and reinforced the hack narrative.
- dahdum 4y agoHe’s rational, he’s just using a different set of ethics. In the Vox interview he says he’s trying to win a jurisdictional battle with Delaware, this just part of that fight.
- walrus01 4y agoPresumably Bahamian law enforcement officials in possession of the court order offered the persons in possession of the keys the choice between making the transfer or going to Bahamian prison for contempt. Ultimately, if you foul things up enough in whatever jurisdiction you happen to be physically located in, men with guns will come to compell you to do something.
- JamesonNetworks 4y agoObligatory: https://xkcd.com/538/ https://xkcd.com/538/ We often ignore the physical realities when thinking through security scenarios
- TrackerFF 4y agoPretty accurate. I've lost count how many times I've seen self-professed crypto fundamentalists say they'd never, ever give out their keys during duress - that they'd rather die than hand over anything. (Usually in the context of some person getting kidnapped and giving their keys to their captors, has happened quite a few times around the world)
- AnAfrican 4y agoAlso : https://twitter.com/kamilkazani/status/1579147610962919425?s=61&t=B8EhDywCAxUu7Wad8uMcBw https://twitter.com/kamilkazani/status/1579147610962919425?s...
- pibechorro 4y agoFtx is not crypto. its an exchange no different than paypal. Not your keys, not your crypto.
- fortran77 4y agoWell then, I guess this means this "crypto" thing is just fine, safe, and a good place to put all my wealth.
- trompetenaccoun 4y agoIt's explained in the article for those who bother to read.