4 ms·

I 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 optimisti

I 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 ago
That'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 ago
Armed 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 ago
  but 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 ago
        What'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 ago
        it's just how I'm picturing this scheme could work, not necessarily in FTX scenario
- milchek 4y ago
  Exactly, 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 ago
  Absolutely 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.
  - zeven7 4y ago
    They made it easy to move the funds around on purpose, so that they could move the funds around any time they wanted. "They" being a very small handful of people, maybe just SBF himself, maybe a couple others. They didn't want it to be hard to move funds because that would require more accountability. Accountability was the last thing they wanted.
- tormeh 4y ago
  And how would you ever comply? The government can hold you hostage, but absent the consent of your collaborators there’s nothing you or the government can do. Which is not a great situation to be in, to be fair.
  - starmole 4y ago
    The government can let you call your collaborators. While they torture you. Of course you picked your partners carefully to be absolute psychopaths that would rather see you suffer and die than give up their keys. That's how you picked them as trustworthy partners in the first place!
- malermeister 4y ago
  They'll hold you and go get your partner in the other place next. If he's in a different jurisdiction, they get the other country to cooperate and share the seized funds.
spenczar5 4y ago
According 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 ago
  That's not the secret sharing Shamir had in mind!

I 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 ago

That'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 ago

Armed 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 ago
but 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 ago
      What'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 ago
        it's just how I'm picturing this scheme could work, not necessarily in FTX scenario
milchek 4y ago
Exactly, 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 ago
Absolutely 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.
- zeven7 4y ago
  They made it easy to move the funds around on purpose, so that they could move the funds around any time they wanted. "They" being a very small handful of people, maybe just SBF himself, maybe a couple others. They didn't want it to be hard to move funds because that would require more accountability. Accountability was the last thing they wanted.
tormeh 4y ago
And how would you ever comply? The government can hold you hostage, but absent the consent of your collaborators there’s nothing you or the government can do. Which is not a great situation to be in, to be fair.
- starmole 4y ago
  The government can let you call your collaborators. While they torture you. Of course you picked your partners carefully to be absolute psychopaths that would rather see you suffer and die than give up their keys. That's how you picked them as trustworthy partners in the first place!
malermeister 4y ago
They'll hold you and go get your partner in the other place next. If he's in a different jurisdiction, they get the other country to cooperate and share the seized funds.

spenczar5 4y ago

According 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 ago
That's not the secret sharing Shamir had in mind!