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Nothing here happened on a blockchain. If it had there wouldn't have been problems. This is a typical finance market scam.

77pt77 4y ago
Kind of. One-coin fits your description better.
- HN_is_for_gemes 4y ago
  SBF would have scammed with anything instrument, only the media and gov wants you to believe it had anything to do with crypto
  - maxbond 4y ago
    If people will run scams in crypto the same as they'll run scams in tradfi - shouldn't they be regulated the same, too?
    - jdminhbg 4y ago
      Well they’re being arrested and sent to jail, so that’s a form of regulation.
      - tiahura 4y ago
        Not for the crypto though. For ripping off the investors. Neither the SEC nor the CFTC have authority to regulate crypto.
  - timmytokyo 4y ago
    Cryptocurrency is, in many ways, especially useful for fraud. It's relatively anonymous, which makes transactions between individuals more difficult to track. It's unregulated, so there are fewer safeguards against fraud. It's complex, so scammers are able to prey on more people who don't fully understand it. And it's unprotected, in the sense that consumers usually have no recourse in the event that they are scammed. Can traditional financial instruments (like cash, securities or commodities) be used for fraud? Absolutely. But it's not as easy.
    - vgatherps 4y ago
      > It's unregulated, so there are fewer safeguards against fraud I work in traditional finance and this imo is a major reason why - the GP is right in that nothing about the fraud was crypto related. But today you could never run an equities brokerage with such absurd lack of anything related to operational competence and customer protections.
  - lolinder 4y ago
    If the atmosphere around crypto makes it easy to scam lots of people out of lots of money (which it does), then I think it's absolutely fair to make this story about crypto, if only so that otherwise-naive people who hear the news will think twice before investing in the next big scam. It's not necessarily that the technology inherently lends itself to scams, but the culture around it absolutely does. A startlingly large percentage of the biggest players in crypto have turned out to be scams, this isn't a one-off thing.
HN_is_for_gemes 4y ago
Exactly, crypto was only peripherally related to the legacy financial fraud. But everyone, including this site, wants you to think this was a, "crypto bro's" scam, SBF was NOT a crypto bro, he was a rich kid.
- maxbond 4y ago
  What disqualifies him as being cryptobro?
  - MacsHeadroom 4y ago
    Many things. But for one, he lobbied for a future where individuals would no longer legally be able to use blockchains directly or build businesses on them (aside from pure direct person-to-person payments). Doesn't get much less "cryptobro" than lobbying against people being able to use blockchains.
    - SV_BubbleTime 4y ago
      I think he said a lot of things; and did the complete opposite. Why would any one statement carry any weight at all?
      - whatshisface 4y ago
        Well, since crypto bros actually believe their statements about NFTs etcetera, that's another way of agreeing with the thesis.
    - deleted 4y ago
      [deleted]
  - deleted 4y ago
    [deleted]
- bmitc 4y ago
  It was traditional, centralized finance that kept this from spreading. But because it's crypto, they had effectively no auditing or reporting requirements. And part of the central grift was their FTT token. Crypto was a major factor in this scam and others. True decentralized crypto will never be integrated into society. Crypto fundamentalists can't get past these things.
lolinder 4y ago
> In its complaint, the S.E.C. said Ms. Ellison, under direction from Mr. Bankman-Fried, had manipulated the price of a digital currency that FTX created, called FTT, by buying large quantities to prop up its price. Alameda was one of the major firms that was trading FTT and had used the crypto token as collateral for loans it got from other big crypto firms to fund its trading. FTT is on the Ethereum Blockchain.
- mudrockbestgirl 4y ago
  Yes, just like the FTX website is on the internet. So, do you blame the HTTP protocol for every online scam? Anyone can put scam token on Ethereum, just like anyone can publish a website. It has no relevance to Ethereum whatsoever. What the poster meant was that the FTX, the organization, was not an Ethereum protocol, it was just a centralized financial institution that published some random token.
  - lolinder 4y ago
    That's not at all what OP said: > Nothing here happened on a blockchain. If it had there wouldn't have been problems. My response addresses their point exactly. FTT being on the blockchain did not solve the problems, and she is specifically being charged with fraudulent on-chain activity (not just fraud on the edges). As for the protocols, I don't blame the technology, I blame the culture. The culture that surrounds crypto is uniquely prone to perpetuating scams. That's not the fault of the technologists who started the movement, it's what happened when crypto became a gold rush.
Nursie 4y ago
1. A bunch of it happened "on the blockchain" 2. You can't entirely separate a thing from its effects, the effects of cryptocurrency have been to enable this massive ecosystem of frauds and scams. That may not have been the initial intent, but it's certainly a large part of the outcome.
EamonnMR 4y ago
No true crypto

77pt77 4y ago

Kind of. One-coin fits your description better.

HN_is_for_gemes 4y ago
SBF would have scammed with anything instrument, only the media and gov wants you to believe it had anything to do with crypto
- maxbond 4y ago
  If people will run scams in crypto the same as they'll run scams in tradfi - shouldn't they be regulated the same, too?
  - jdminhbg 4y ago
    Well they’re being arrested and sent to jail, so that’s a form of regulation.
    - tiahura 4y ago
      Not for the crypto though. For ripping off the investors. Neither the SEC nor the CFTC have authority to regulate crypto.
- timmytokyo 4y ago
  Cryptocurrency is, in many ways, especially useful for fraud. It's relatively anonymous, which makes transactions between individuals more difficult to track. It's unregulated, so there are fewer safeguards against fraud. It's complex, so scammers are able to prey on more people who don't fully understand it. And it's unprotected, in the sense that consumers usually have no recourse in the event that they are scammed. Can traditional financial instruments (like cash, securities or commodities) be used for fraud? Absolutely. But it's not as easy.
  - vgatherps 4y ago
    > It's unregulated, so there are fewer safeguards against fraud I work in traditional finance and this imo is a major reason why - the GP is right in that nothing about the fraud was crypto related. But today you could never run an equities brokerage with such absurd lack of anything related to operational competence and customer protections.
- lolinder 4y ago
  If the atmosphere around crypto makes it easy to scam lots of people out of lots of money (which it does), then I think it's absolutely fair to make this story about crypto, if only so that otherwise-naive people who hear the news will think twice before investing in the next big scam. It's not necessarily that the technology inherently lends itself to scams, but the culture around it absolutely does. A startlingly large percentage of the biggest players in crypto have turned out to be scams, this isn't a one-off thing.

HN_is_for_gemes 4y ago

Exactly, crypto was only peripherally related to the legacy financial fraud. But everyone, including this site, wants you to think this was a, "crypto bro's" scam, SBF was NOT a crypto bro, he was a rich kid.

maxbond 4y ago
What disqualifies him as being cryptobro?
- MacsHeadroom 4y ago
  Many things. But for one, he lobbied for a future where individuals would no longer legally be able to use blockchains directly or build businesses on them (aside from pure direct person-to-person payments). Doesn't get much less "cryptobro" than lobbying against people being able to use blockchains.
  - SV_BubbleTime 4y ago
    I think he said a lot of things; and did the complete opposite. Why would any one statement carry any weight at all?
    - whatshisface 4y ago
      Well, since crypto bros actually believe their statements about NFTs etcetera, that's another way of agreeing with the thesis.
  - deleted 4y ago
    [deleted]
- deleted 4y ago
  [deleted]
bmitc 4y ago
It was traditional, centralized finance that kept this from spreading. But because it's crypto, they had effectively no auditing or reporting requirements. And part of the central grift was their FTT token. Crypto was a major factor in this scam and others. True decentralized crypto will never be integrated into society. Crypto fundamentalists can't get past these things.

lolinder 4y ago

> In its complaint, the S.E.C. said Ms. Ellison, under direction from Mr. Bankman-Fried, had manipulated the price of a digital currency that FTX created, called FTT, by buying large quantities to prop up its price. Alameda was one of the major firms that was trading FTT and had used the crypto token as collateral for loans it got from other big crypto firms to fund its trading. FTT is on the Ethereum Blockchain.

mudrockbestgirl 4y ago
Yes, just like the FTX website is on the internet. So, do you blame the HTTP protocol for every online scam? Anyone can put scam token on Ethereum, just like anyone can publish a website. It has no relevance to Ethereum whatsoever. What the poster meant was that the FTX, the organization, was not an Ethereum protocol, it was just a centralized financial institution that published some random token.
- lolinder 4y ago
  That's not at all what OP said: > Nothing here happened on a blockchain. If it had there wouldn't have been problems. My response addresses their point exactly. FTT being on the blockchain did not solve the problems, and she is specifically being charged with fraudulent on-chain activity (not just fraud on the edges). As for the protocols, I don't blame the technology, I blame the culture. The culture that surrounds crypto is uniquely prone to perpetuating scams. That's not the fault of the technologists who started the movement, it's what happened when crypto became a gold rush.

Nursie 4y ago

1. A bunch of it happened "on the blockchain" 2. You can't entirely separate a thing from its effects, the effects of cryptocurrency have been to enable this massive ecosystem of frauds and scams. That may not have been the initial intent, but it's certainly a large part of the outcome.

EamonnMR 4y ago

No true crypto