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Amongst other complications, this seems like a great example of where decentralisation / extreme techno-libertarianism greatly falls short. Creating a governmen

Amongst other complications, this seems like a great example of where decentralisation / extreme techno-libertarianism greatly falls short. Creating a government-less financial system is enabling corruption in an instance when traditional finance would likely do quite well in freezing assets of an alleged criminal.

siwatanejo 4y ago
The only thing that allowed this in the first place is counterparty risk, the very problem that bitcoin actually solves. People will have to learn this the hard way, unfortunately.
- adastra22 4y ago
  You shouldn’t be downvoted. This FTX saga has nothing to do with cryptocurrency. The whole point of defi is to make these sorts of institutions unnecessary.
  - williamtrask 4y ago
    This article is about cryptocurrency facilitating SBF plausibly laundering funds.
    - siwatanejo 4y ago
      So what the DOJ should learn from this is to not allow bail to perpretaros of cryptocurrency-related scams.
      - harambae 4y ago
        In fairness to SBF (who I have no sympathy for and think should rot in prison), this could very easily just be set up to look like it's him. If I was someone else with access to that wallet, I could easily see waiting until SBF is out on bail and then moving funds to make everyone think it's him. On the flip side, if it was SBF, he maybe could have done it before. Martin Shrekli has stated how he did blockchain operations from a contraband cellphone while in jail.
    - adastra22 4y ago
      SBF would never have had any customer funds (or customers) if people actually used cryptocurrency as intended.
      - williamtrask 4y ago
        And yet he still could have committed a crime using the funds at his disposal. Crypto doesn’t prevent crime. On the contrary it tends to make crime net easier via facilitating money laundering.
        siwatanejo 4y ago
        You don't seem to understand what "counterparty risk" means. If all FTX users had used a non custodial exchange to purchase crypto, the CEO of that non-custodial exchange would not have access to any customer funds, so he would not be able to commit any crime like that.
        williamtrask 4y ago
        My wording wasn’t clear. I wasn’t referring to SBF commuting a crime with customer funds. I was referring to him committing any crime for which limiting his assets may be appropriate.
sneak 4y ago
Everyone is an "alleged criminal" until proven guilty in a court of law. Systems that enable the freezing of assets of alleged criminals are fail-deadly, because they enable universal systemwide veto of any participant or transaction by whoever can exercise the ability to freeze funds. If you don't like fail-safe systems like cryptocurrency, you can of course keep your money in a normal, regulated bank, where it is "safe" (except from point-and-click seizure, civil asset forfeiture, bank errors, bank discretion, unfounded/imaginary tax warrants, malicious prosecution, etc).
- williamtrask 4y ago
  Forgive my oversimplification - the financial system has many more methods than just freezing though. Tracking, reversing, and limiting international movements come to mind. My point is that while I agree with the risks you imply with traditional finance, the crypto we have today has not fixed the issues in traditional finance and has introduced many new ones. Hard to calculate but it feels like a net loss in my book. Feels like a far cry from the “fail safe” you mention. Yeah it’s a fail safe from a government intervening in your financial affairs, but it’s also a fail safe from them protecting you by intervening in others. It’s the opposite of collective action. It’s every human for themself. This is not an improvement.
  - sneak 4y ago
    > Yeah it’s a fail safe from a government intervening in your financial affairs, but it’s also a fail safe from them protecting you by intervening in others. It’s the opposite of collective action. Engineering is trade-offs. Personally I prefer my money to be immune from collective action, given that it's personal funds and not collective money. > Hard to calculate but it feels like a net loss in my book. It is very nice then that nobody is required to use cryptocurrency for any reason if they don't want to. Everyone who holds cryptocurrency has explicitly opted in to those benefits and risks. I wish I could say the same about US retail/consumer banking. I would abandon those criminals in an instant if it were possible. Unfortunately, everyone is opted into an unsafe system against their will, with no recourse.

siwatanejo 4y ago

The only thing that allowed this in the first place is counterparty risk, the very problem that bitcoin actually solves. People will have to learn this the hard way, unfortunately.

adastra22 4y ago
You shouldn’t be downvoted. This FTX saga has nothing to do with cryptocurrency. The whole point of defi is to make these sorts of institutions unnecessary.
- williamtrask 4y ago
  This article is about cryptocurrency facilitating SBF plausibly laundering funds.
  - siwatanejo 4y ago
    So what the DOJ should learn from this is to not allow bail to perpretaros of cryptocurrency-related scams.
    - harambae 4y ago
      In fairness to SBF (who I have no sympathy for and think should rot in prison), this could very easily just be set up to look like it's him. If I was someone else with access to that wallet, I could easily see waiting until SBF is out on bail and then moving funds to make everyone think it's him. On the flip side, if it was SBF, he maybe could have done it before. Martin Shrekli has stated how he did blockchain operations from a contraband cellphone while in jail.
  - adastra22 4y ago
    SBF would never have had any customer funds (or customers) if people actually used cryptocurrency as intended.
    - williamtrask 4y ago
      And yet he still could have committed a crime using the funds at his disposal. Crypto doesn’t prevent crime. On the contrary it tends to make crime net easier via facilitating money laundering.
      - siwatanejo 4y ago
        You don't seem to understand what "counterparty risk" means. If all FTX users had used a non custodial exchange to purchase crypto, the CEO of that non-custodial exchange would not have access to any customer funds, so he would not be able to commit any crime like that.
        williamtrask 4y ago
        My wording wasn’t clear. I wasn’t referring to SBF commuting a crime with customer funds. I was referring to him committing any crime for which limiting his assets may be appropriate.

sneak 4y ago

Everyone is an "alleged criminal" until proven guilty in a court of law. Systems that enable the freezing of assets of alleged criminals are fail-deadly, because they enable universal systemwide veto of any participant or transaction by whoever can exercise the ability to freeze funds. If you don't like fail-safe systems like cryptocurrency, you can of course keep your money in a normal, regulated bank, where it is "safe" (except from point-and-click seizure, civil asset forfeiture, bank errors, bank discretion, unfounded/imaginary tax warrants, malicious prosecution, etc).

williamtrask 4y ago
Forgive my oversimplification - the financial system has many more methods than just freezing though. Tracking, reversing, and limiting international movements come to mind. My point is that while I agree with the risks you imply with traditional finance, the crypto we have today has not fixed the issues in traditional finance and has introduced many new ones. Hard to calculate but it feels like a net loss in my book. Feels like a far cry from the “fail safe” you mention. Yeah it’s a fail safe from a government intervening in your financial affairs, but it’s also a fail safe from them protecting you by intervening in others. It’s the opposite of collective action. It’s every human for themself. This is not an improvement.
- sneak 4y ago
  > Yeah it’s a fail safe from a government intervening in your financial affairs, but it’s also a fail safe from them protecting you by intervening in others. It’s the opposite of collective action. Engineering is trade-offs. Personally I prefer my money to be immune from collective action, given that it's personal funds and not collective money. > Hard to calculate but it feels like a net loss in my book. It is very nice then that nobody is required to use cryptocurrency for any reason if they don't want to. Everyone who holds cryptocurrency has explicitly opted in to those benefits and risks. I wish I could say the same about US retail/consumer banking. I would abandon those criminals in an instant if it were possible. Unfortunately, everyone is opted into an unsafe system against their will, with no recourse.