16 ms·

Seeing SBF and saying 'look how corrupt America/NYT is' feels like deflection from the more obvious 'look how corrupt Crypto is.'

throwaway1777 4y ago
Don’t know why this is downvoted, it could be true.
siftrics 4y ago
If FTX was on chain, SBF could not have absconded with users' deposits. Crypto mathematically prevents fraud. The problem here is that business was conducted in the fiat world and on a "trust me" basis.
- scottLobster 4y ago
  Sure he could have, it just might have been spotted sooner. How many pump-and-dump shitcoins have there been to date? If "Crypto" has proven anything over the last few years the only thing it mathematically prevents is reversing transactions, which is really useful when you want to steal money.
- ip26 4y ago
  I’m a crypto skeptic so I may be missing something. This sounds impossible. If users deposit to a wallet SBF has control of, he can fraud all he likes. It’s mathematically his money now. If users deposit but retain control of the wallet, it axiomatically isn’t a deposit.
  - squirtlebonflow 4y ago
    It is possible to have: * A contract (a piece of software) hosted on the network * This contract is immutable (its code cannot be changed) * This contract defines rules such as allowing deposits, withdrawals, and trades, and those functions of withdrawing deposits or enacting trades require transactions signed by the depositor In that scenario, it is a deposit, is controlled (and thus owned, both legally and cryptographically) by the users. In real life, these contracts are generally mutable, so there is the possibility that users can still get fucked over.
    - mrbombastic 4y ago
      Contracts and law being mutable and open to interpretation by squishy brained humans is a feature not a bug. Yeah too much mutability you get room for corruption and selective enforcement/application, too little you have a contract that might do what it says or it might accidentally empty your bank account with no recourse because a flawed human implemented it and the world is complicated.
  - siftrics 4y ago
    Smart contracts have existed for more than 5 years now. You can retain fully custody of funds deposited into DEXs.
- VHRanger 4y ago
  yes, rugpulls are known to be very uncommon in the crypto world
  - andirk 4y ago
    There's no rugpulling possible if you don't give someone else your private keys. What is everyone missing about this? That's the entire glory of crypto. No one owns your coins but you... unless you use an intermediary. I'm guessing by far most transactions are done via centralized exchanges so that autonomy is lost both in practice and in headlines. I'm fine with highly regulated exchanges despite that being counter to that glory of crypto. Also, move your large bags to cold storage.
  - siftrics 4y ago
    You can't rugpull if you don't have their private keys.
- freejazz 4y ago
  "Crypto mathematically prevents fraud" Uh what? How could it do that. Fraud isn't even a technical layer issue. It's an identity issue and identity is pretty much entirely abstracted out of the crypto ecosystem. So, if you think about it that way, it's actually impossible for crypto to "mathematically prevent fraud". That you even said something so ridiculous without any reflection speaks to your intuitions in this space.
  - andirk 4y ago
    If you are the one with a password aka private key to an address that holds the coins on whatever reputable chain, then you are the sole owner of said coins. It's that simple. Things get complicated, ironically for the sake of being less complicated, when there is a centralized authority in the middle who holds control of those addresses and their respective private keys. I use centralized exchanges plenty, and I am also aware that it defeats a large portion of the whole trustless money thing. Therefore, I also keep crypto offline in cold storage. Those addresses and the coins involved will go with me to the grave or until someone threatens me with a hammer.
  - dysarray 4y ago
    People really think "cryptocurrencies are based on code" means no fraud can happen with them. The decentralized nature of most cryptocurrencies makes it difficult for a single entity to manipulate the market or falsify transactions, but it does not completely eliminate the possibility of fraud. In addition, the anonymity of many cryptocurrencies can make it difficult to trace the source of fraudulent activity, which can make it harder to prevent or prosecute.
    - PaulHoule 4y ago
      And you don’t have the culture of controls that exist at real financial institutions. Often you hear a story of some firm like Amaranth or M.F. Global that blew up and what you always find is that the basic controls that prevent an organization from taking on disasterous positions are not in place. It’s a simple truth that an investment fund that is getting more deposits from withdrawals can vaporize the money and not have any problems until people ask for the money back. That is why financial institutions need strict controls.
olalonde 4y ago
Who is Crypto and how are they supposed to put SBF behind bars?
photochemsyn 4y ago
Crypto exchanges certainly seem to be geared towards fraudulent activities, and they've lured investors in with promises of high returns. The whole so-called 'decentralized finance' world (DeFi) seems to be full of shady actors and money-launderers, but cryptocurrencies themselves - when no used in the way, say, that subprime mortgages were - as vehicles for gambling - don't seem to be inherently corrupt. FTX/Alameda is now the poster child for Defi, isn't it? Good overview here: https://blockcast.cc/news/revealing-the-new-defi-gang-ftx-and-the-expansion-of-alameda/ https://blockcast.cc/news/revealing-the-new-defi-gang-ftx-an...
- ditonal 4y ago
  The poster child for DeFi was never a CEX. The obvious poster child for decentralized finance would be the biggest decentralized exchange in the world , Uniswap. I recognize there are tons of fraudsters who latch onto the vocabulary of cryptocurrency and twist it to trick naive consumers who don’t know the difference. Another example would be “staking” where the original intent meant earning proof of stake rewards without giving up your keys, but was frequently used as a marketing term for things like Blockfi where you literally transferred ownership if your coins. Despite the manipulation around the terms, it’s unfortunate how a fairly technical audience like Hacker News refuses to have good faith discussions around this. This crowd should know better than to call FTX DeFi. This crowd should know better than to call fractional reserve interest programs staking. I think this crowd does know the difference but chooses to ignore it in bad faith because of a general dislike of cryptocurrencies. By all means call out the swindlers but a site called hacker news deserves better when it comes to using technical terms accurate and in good faith. And by calling FTX DeFi you’re doing neither.
  - bb88 4y ago
    FTX was working on DeFi with their Serum protocol. [1], [2] Serum was meant to compete with Uniswap. [6] Oxygen and Solana DeFi tokens were working with FTX on Serum. [3], [4] Now that FTX has failed, people are saying "FTX was never a De-Fi". We should stop calling it that because if we do we're now "dishonest". [you and 5] [1] https://www.projectserum.com https://www.projectserum.com [2] https://cryptopotato.com/serum-srm-backs-community-hard-fork-plans-after-ftx-collapse/ https://cryptopotato.com/serum-srm-backs-community-hard-fork... [3] https://decrypt.co/116652/ftx-solana-defi-serum-starting-over https://decrypt.co/116652/ftx-solana-defi-serum-starting-ove... [4] https://cryptoslate.com/defi-protocol-oxygen-held-95-of-supply-on-ftx/ https://cryptoslate.com/defi-protocol-oxygen-held-95-of-supp... [5] https://www.rebellionresearch.com/is-ftx-a-defi https://www.rebellionresearch.com/is-ftx-a-defi [6] https://www.coindesk.com/markets/2021/04/28/serum-token-becomes-latest-project-in-bankman-fried-empire-to-turn-heads/ https://www.coindesk.com/markets/2021/04/28/serum-token-beco...
ralston3 4y ago
What does this have at all to do with crypto as a whole? SBF is a single individual. This was a centralized exchange. I'd say CeFI is not really crypto at all. After 2008 was every single U.S. bank corrupt? Downvote.
RestlessMind 4y ago
Judging the entire Crypto based on SBF / Luna is like judging the entire Silicon Valley based on a handful of big-name adtech scums. Sure, they dominate the zeitgeist but there is a lot more to those ecosystems.
eric_cc 4y ago
What is corrupt about bitcoin, exactly?

throwaway1777 4y ago

Don’t know why this is downvoted, it could be true.

siftrics 4y ago

If FTX was on chain, SBF could not have absconded with users' deposits. Crypto mathematically prevents fraud. The problem here is that business was conducted in the fiat world and on a "trust me" basis.

scottLobster 4y ago
Sure he could have, it just might have been spotted sooner. How many pump-and-dump shitcoins have there been to date? If "Crypto" has proven anything over the last few years the only thing it mathematically prevents is reversing transactions, which is really useful when you want to steal money.
ip26 4y ago
I’m a crypto skeptic so I may be missing something. This sounds impossible. If users deposit to a wallet SBF has control of, he can fraud all he likes. It’s mathematically his money now. If users deposit but retain control of the wallet, it axiomatically isn’t a deposit.
- squirtlebonflow 4y ago
  It is possible to have: * A contract (a piece of software) hosted on the network * This contract is immutable (its code cannot be changed) * This contract defines rules such as allowing deposits, withdrawals, and trades, and those functions of withdrawing deposits or enacting trades require transactions signed by the depositor In that scenario, it is a deposit, is controlled (and thus owned, both legally and cryptographically) by the users. In real life, these contracts are generally mutable, so there is the possibility that users can still get fucked over.
  - mrbombastic 4y ago
    Contracts and law being mutable and open to interpretation by squishy brained humans is a feature not a bug. Yeah too much mutability you get room for corruption and selective enforcement/application, too little you have a contract that might do what it says or it might accidentally empty your bank account with no recourse because a flawed human implemented it and the world is complicated.
- siftrics 4y ago
  Smart contracts have existed for more than 5 years now. You can retain fully custody of funds deposited into DEXs.
VHRanger 4y ago
yes, rugpulls are known to be very uncommon in the crypto world
- andirk 4y ago
  There's no rugpulling possible if you don't give someone else your private keys. What is everyone missing about this? That's the entire glory of crypto. No one owns your coins but you... unless you use an intermediary. I'm guessing by far most transactions are done via centralized exchanges so that autonomy is lost both in practice and in headlines. I'm fine with highly regulated exchanges despite that being counter to that glory of crypto. Also, move your large bags to cold storage.
- siftrics 4y ago
  You can't rugpull if you don't have their private keys.
freejazz 4y ago
"Crypto mathematically prevents fraud" Uh what? How could it do that. Fraud isn't even a technical layer issue. It's an identity issue and identity is pretty much entirely abstracted out of the crypto ecosystem. So, if you think about it that way, it's actually impossible for crypto to "mathematically prevent fraud". That you even said something so ridiculous without any reflection speaks to your intuitions in this space.
- andirk 4y ago
  If you are the one with a password aka private key to an address that holds the coins on whatever reputable chain, then you are the sole owner of said coins. It's that simple. Things get complicated, ironically for the sake of being less complicated, when there is a centralized authority in the middle who holds control of those addresses and their respective private keys. I use centralized exchanges plenty, and I am also aware that it defeats a large portion of the whole trustless money thing. Therefore, I also keep crypto offline in cold storage. Those addresses and the coins involved will go with me to the grave or until someone threatens me with a hammer.
- dysarray 4y ago
  People really think "cryptocurrencies are based on code" means no fraud can happen with them. The decentralized nature of most cryptocurrencies makes it difficult for a single entity to manipulate the market or falsify transactions, but it does not completely eliminate the possibility of fraud. In addition, the anonymity of many cryptocurrencies can make it difficult to trace the source of fraudulent activity, which can make it harder to prevent or prosecute.
  - PaulHoule 4y ago
    And you don’t have the culture of controls that exist at real financial institutions. Often you hear a story of some firm like Amaranth or M.F. Global that blew up and what you always find is that the basic controls that prevent an organization from taking on disasterous positions are not in place. It’s a simple truth that an investment fund that is getting more deposits from withdrawals can vaporize the money and not have any problems until people ask for the money back. That is why financial institutions need strict controls.

olalonde 4y ago

Who is Crypto and how are they supposed to put SBF behind bars?

photochemsyn 4y ago

Crypto exchanges certainly seem to be geared towards fraudulent activities, and they've lured investors in with promises of high returns. The whole so-called 'decentralized finance' world (DeFi) seems to be full of shady actors and money-launderers, but cryptocurrencies themselves - when no used in the way, say, that subprime mortgages were - as vehicles for gambling - don't seem to be inherently corrupt. FTX/Alameda is now the poster child for Defi, isn't it? Good overview here: https://blockcast.cc/news/revealing-the-new-defi-gang-ftx-and-the-expansion-of-alameda/ https://blockcast.cc/news/revealing-the-new-defi-gang-ftx-an...

ditonal 4y ago
The poster child for DeFi was never a CEX. The obvious poster child for decentralized finance would be the biggest decentralized exchange in the world , Uniswap. I recognize there are tons of fraudsters who latch onto the vocabulary of cryptocurrency and twist it to trick naive consumers who don’t know the difference. Another example would be “staking” where the original intent meant earning proof of stake rewards without giving up your keys, but was frequently used as a marketing term for things like Blockfi where you literally transferred ownership if your coins. Despite the manipulation around the terms, it’s unfortunate how a fairly technical audience like Hacker News refuses to have good faith discussions around this. This crowd should know better than to call FTX DeFi. This crowd should know better than to call fractional reserve interest programs staking. I think this crowd does know the difference but chooses to ignore it in bad faith because of a general dislike of cryptocurrencies. By all means call out the swindlers but a site called hacker news deserves better when it comes to using technical terms accurate and in good faith. And by calling FTX DeFi you’re doing neither.
- bb88 4y ago
  FTX was working on DeFi with their Serum protocol. [1], [2] Serum was meant to compete with Uniswap. [6] Oxygen and Solana DeFi tokens were working with FTX on Serum. [3], [4] Now that FTX has failed, people are saying "FTX was never a De-Fi". We should stop calling it that because if we do we're now "dishonest". [you and 5] [1] https://www.projectserum.com https://www.projectserum.com [2] https://cryptopotato.com/serum-srm-backs-community-hard-fork-plans-after-ftx-collapse/ https://cryptopotato.com/serum-srm-backs-community-hard-fork... [3] https://decrypt.co/116652/ftx-solana-defi-serum-starting-over https://decrypt.co/116652/ftx-solana-defi-serum-starting-ove... [4] https://cryptoslate.com/defi-protocol-oxygen-held-95-of-supply-on-ftx/ https://cryptoslate.com/defi-protocol-oxygen-held-95-of-supp... [5] https://www.rebellionresearch.com/is-ftx-a-defi https://www.rebellionresearch.com/is-ftx-a-defi [6] https://www.coindesk.com/markets/2021/04/28/serum-token-becomes-latest-project-in-bankman-fried-empire-to-turn-heads/ https://www.coindesk.com/markets/2021/04/28/serum-token-beco...

ralston3 4y ago

What does this have at all to do with crypto as a whole? SBF is a single individual. This was a centralized exchange. I'd say CeFI is not really crypto at all. After 2008 was every single U.S. bank corrupt? Downvote.

RestlessMind 4y ago

Judging the entire Crypto based on SBF / Luna is like judging the entire Silicon Valley based on a handful of big-name adtech scums. Sure, they dominate the zeitgeist but there is a lot more to those ecosystems.

eric_cc 4y ago

What is corrupt about bitcoin, exactly?