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Well, there was some hand-waviness claiming that GUSD was FDIC insured [1], and they kept comparing it to bank accounts. I will admit that I should have done m

Well, there was some hand-waviness claiming that GUSD was FDIC insured [1], and they kept comparing it to bank accounts. I will admit that I should have done more research before putting it in, but I just assumed that since Gemini was ostensibly working with regulators and they were plastering the safety of GUSD everywhere, I guess I just didn't do my due diligence. I'll accept my share of the blame. [1] https://www.gemini.com/dollar https://www.gemini.com/dollar It still mentioned "FDIC" stuff in small print, but it was much more prominent in earlier stuff.

JumpCrisscross 4y ago
> there was some hand-waviness claiming that GUSD was FDIC insured This should be piercing-the-veil fraud if true.
- tombert 4y ago
  They're actually being sued by the SEC over this, claiming it's an unregistered security.
  - JumpCrisscross 4y ago
    > being sued by the SEC over this, claiming it's an unregistered security Good, but insufficient. Misleadingly using the FDIC’s brand should open a criminal investigation.
prepend 4y ago
But that’s so simple to validate. I mean, I have funds in a few accounts and every one of them shows up in FDIC’s bankfind tool and “member fdic” is advertised by the banks. The link you posted does mention fdic but it says Gemini’s deposits are fdic insured (probably true as what kind of a crazy company keeps cash in uninsured accounts). Definitely shady of them to word it like that as it’s likely meant to confuse and mislead. But again, pretty easy to validate and disprove before sending any funds. I hope you get something back and I guess the good news is that you only make this mistake once in life and teach everyone in your family how to avoid.
- radlad 4y ago
  > But that’s so simple to validate. Simple to who? Simple to you? I didn't invest in Gemini and also thought these returns were obviously bunk, but I've never heard of "FDIC's bankfind tool" before your comment. The guy already said he accepts his share of the blame for not doing DD, but I'm not sure why you're so insistent that it's entirely his fault when SBF was clearly committing fraud.
  - prepend 4y ago
    Simple to anyone with significant sums of money to invest. Either someone is competent enough to earn thousands to hold with FTX or competent enough to inherit win and not have it wasted away. Either way, if I have $10-100k or whatever and this isn’t simple for me then the issue isn’t FTX, it’s me and I’m going to eventually lose it. I’m saying it is OP’s fault because he invested in magical thinking. Of course it’s also SBF’s fault for committing fraud. But this is an entirely avoidable fraud as it’s not a complicated con. If I buy magic beans from a traveler whose fault is it? It’s certainly the traveler’s fault for claiming they will grow into a beanstalk to heaven, but it’s also my fault for believing such a tale.
    - deleted 4y ago
      [deleted]
    - deleted 4y ago
      [deleted]
    - SoftTalker 4y ago
      > Simple to anyone with significant sums of money to invest. Remember Bernie Madhoff?
      - prepend 4y ago
        Hedge funds are quite different than cash accounts. And Madoff at least had a story with fake statements and whatnot. FTX was patently impossible.
the_gastropod 4y ago
It's really unfortunate so many VC's and people in the tech industry lent credibility to such naked fraud. It made (and continues to make) regulation politically untenable. One of our political parties _continues_ to insist the crypto industry is "innovation!" and it'd be a mistake to stifle such incredible innovation. It's all bs. I'm sorry you fell victim to this. It's a shame the regulators, meant to protect consumers from this exact thing, weren't able to do their jobs. Don't take it as a personal failure. This was systemic, and you were served up by lots of deeply monied interests.
- __loam 4y ago
  I mean the VCs literally make their money from pump and dump schemes. There are a ton of startups in the valley that have ludicrous valuations. VC can do the initial investments then recoup their capital even before companies are profitable as we see with examples like Uber.
- lightfield1002 4y ago
  Or you could take personal responsibility for having ignored everybody who said for years that it's all BS. This was not a secret, unforeseen, some higher natural power. It was delusion, and if you choose not to listen then it's up to you. Don't blame it on regulators.
  - the_gastropod 4y ago
    Hey, I was one screaming at everyone about how silly it all was. I’ve got a nice decade of HN comments to demonstrate. BUT I also have a decent interest in personal finance and understand that world better than your average bear. It sucks that predators are just allowed to scam less informed people, and this is the response they have to deal with. We’re all getting older, and there’s a good chance we’ll lose some of our faculties along the way. I’d prefer to live in a place that does something to help protect me from outright scams, and not have to take “personal responsibility”, and constantly be on guard against every potential bad actor.
hibikir 4y ago
But it's precisely that handwaviness that should make you not have to do research at all and smell a rat, as ultimately rate of interest and risk come hand in hand. It doesn't matter whether the instrument is based on crypto, real estate or pokemon cards. If someone is offering a high interest, very liquid investment with returns so high that you are better off taking a larger mortgage, and putting the extra money into the investment, there has to be a hidden risk component: Otherwise, why would anyone issue mortgages, instead of investing in this very liquid instrument? It's too good to be true. It's not unlike the people that spent money ordering cryptominers from butterfly labs: The expected return from buying them (pay the whole thing off in two months, and afterwards it's all profit!") just doesn't line up, regardless of the justification. Extraordinary returns exist, but they either require that you discover them yourself, or have to carry significant risks. So when someone is selling the opportunity to you, and you are told there's no risk, you have to know you are being lied to, no due diligence necessary.
- tombert 4y ago
  I mean, I know. I lost my money. I wrote the post explaining that I feel stupid about it.
  - bloppe 4y ago
    [flagged]
    - gumby 4y ago
      The gender of posters is rarely clear so “nerdsplaining” is the appropriate term
    - conradfr 4y ago
      What does that have to do with anything?
  - Xeoncross 4y ago
    Sorry, we all make mistakes. Some people do dumb things with money, others with relationships, some with their health, and others with their time. It's hard to be successful at everything. Ask the friends of anyone here, they'll point at the things someone did right and the things they messed up to get their. Glad you're doing better.
fshbbdssbbgdd 4y ago
There were people in the comments here 11 months ago who thought the same thing: https://news.ycombinator.com/item?id=31434052 https://news.ycombinator.com/item?id=31434052
- tombert 4y ago
  You know, it's very possible that I read this exact thread when it was fresh. I should have listened to you!
ww520 4y ago
10 months ago when Voyager blew up, I've pleaded with people not to believe the FDIC status these crypto firms were claiming [1]. The misrepresentation by these firms was straight fraud. [1] https://news.ycombinator.com/item?id=31954115 https://news.ycombinator.com/item?id=31954115
tornato7 4y ago
GUSD holders never lost a cent. Only people who deposited their GUSD in Gemini Earn, where they made it clear it was a loan to Genesis, have their money encumbered.

JumpCrisscross 4y ago

> there was some hand-waviness claiming that GUSD was FDIC insured This should be piercing-the-veil fraud if true.

tombert 4y ago
They're actually being sued by the SEC over this, claiming it's an unregistered security.
- JumpCrisscross 4y ago
  > being sued by the SEC over this, claiming it's an unregistered security Good, but insufficient. Misleadingly using the FDIC’s brand should open a criminal investigation.

prepend 4y ago

But that’s so simple to validate. I mean, I have funds in a few accounts and every one of them shows up in FDIC’s bankfind tool and “member fdic” is advertised by the banks. The link you posted does mention fdic but it says Gemini’s deposits are fdic insured (probably true as what kind of a crazy company keeps cash in uninsured accounts). Definitely shady of them to word it like that as it’s likely meant to confuse and mislead. But again, pretty easy to validate and disprove before sending any funds. I hope you get something back and I guess the good news is that you only make this mistake once in life and teach everyone in your family how to avoid.

radlad 4y ago
> But that’s so simple to validate. Simple to who? Simple to you? I didn't invest in Gemini and also thought these returns were obviously bunk, but I've never heard of "FDIC's bankfind tool" before your comment. The guy already said he accepts his share of the blame for not doing DD, but I'm not sure why you're so insistent that it's entirely his fault when SBF was clearly committing fraud.
- prepend 4y ago
  Simple to anyone with significant sums of money to invest. Either someone is competent enough to earn thousands to hold with FTX or competent enough to inherit win and not have it wasted away. Either way, if I have $10-100k or whatever and this isn’t simple for me then the issue isn’t FTX, it’s me and I’m going to eventually lose it. I’m saying it is OP’s fault because he invested in magical thinking. Of course it’s also SBF’s fault for committing fraud. But this is an entirely avoidable fraud as it’s not a complicated con. If I buy magic beans from a traveler whose fault is it? It’s certainly the traveler’s fault for claiming they will grow into a beanstalk to heaven, but it’s also my fault for believing such a tale.
  - deleted 4y ago
    [deleted]
  - deleted 4y ago
    [deleted]
  - SoftTalker 4y ago
    > Simple to anyone with significant sums of money to invest. Remember Bernie Madhoff?
    - prepend 4y ago
      Hedge funds are quite different than cash accounts. And Madoff at least had a story with fake statements and whatnot. FTX was patently impossible.

the_gastropod 4y ago

It's really unfortunate so many VC's and people in the tech industry lent credibility to such naked fraud. It made (and continues to make) regulation politically untenable. One of our political parties _continues_ to insist the crypto industry is "innovation!" and it'd be a mistake to stifle such incredible innovation. It's all bs. I'm sorry you fell victim to this. It's a shame the regulators, meant to protect consumers from this exact thing, weren't able to do their jobs. Don't take it as a personal failure. This was systemic, and you were served up by lots of deeply monied interests.

__loam 4y ago
I mean the VCs literally make their money from pump and dump schemes. There are a ton of startups in the valley that have ludicrous valuations. VC can do the initial investments then recoup their capital even before companies are profitable as we see with examples like Uber.
lightfield1002 4y ago
Or you could take personal responsibility for having ignored everybody who said for years that it's all BS. This was not a secret, unforeseen, some higher natural power. It was delusion, and if you choose not to listen then it's up to you. Don't blame it on regulators.
- the_gastropod 4y ago
  Hey, I was one screaming at everyone about how silly it all was. I’ve got a nice decade of HN comments to demonstrate. BUT I also have a decent interest in personal finance and understand that world better than your average bear. It sucks that predators are just allowed to scam less informed people, and this is the response they have to deal with. We’re all getting older, and there’s a good chance we’ll lose some of our faculties along the way. I’d prefer to live in a place that does something to help protect me from outright scams, and not have to take “personal responsibility”, and constantly be on guard against every potential bad actor.

hibikir 4y ago

But it's precisely that handwaviness that should make you not have to do research at all and smell a rat, as ultimately rate of interest and risk come hand in hand. It doesn't matter whether the instrument is based on crypto, real estate or pokemon cards. If someone is offering a high interest, very liquid investment with returns so high that you are better off taking a larger mortgage, and putting the extra money into the investment, there has to be a hidden risk component: Otherwise, why would anyone issue mortgages, instead of investing in this very liquid instrument? It's too good to be true. It's not unlike the people that spent money ordering cryptominers from butterfly labs: The expected return from buying them (pay the whole thing off in two months, and afterwards it's all profit!") just doesn't line up, regardless of the justification. Extraordinary returns exist, but they either require that you discover them yourself, or have to carry significant risks. So when someone is selling the opportunity to you, and you are told there's no risk, you have to know you are being lied to, no due diligence necessary.

tombert 4y ago
I mean, I know. I lost my money. I wrote the post explaining that I feel stupid about it.
- bloppe 4y ago
  [flagged]
  - gumby 4y ago
    The gender of posters is rarely clear so “nerdsplaining” is the appropriate term
  - conradfr 4y ago
    What does that have to do with anything?
- Xeoncross 4y ago
  Sorry, we all make mistakes. Some people do dumb things with money, others with relationships, some with their health, and others with their time. It's hard to be successful at everything. Ask the friends of anyone here, they'll point at the things someone did right and the things they messed up to get their. Glad you're doing better.

fshbbdssbbgdd 4y ago

There were people in the comments here 11 months ago who thought the same thing: https://news.ycombinator.com/item?id=31434052 https://news.ycombinator.com/item?id=31434052

tombert 4y ago
You know, it's very possible that I read this exact thread when it was fresh. I should have listened to you!

ww520 4y ago

10 months ago when Voyager blew up, I've pleaded with people not to believe the FDIC status these crypto firms were claiming [1]. The misrepresentation by these firms was straight fraud. [1] https://news.ycombinator.com/item?id=31954115 https://news.ycombinator.com/item?id=31954115

tornato7 4y ago

GUSD holders never lost a cent. Only people who deposited their GUSD in Gemini Earn, where they made it clear it was a loan to Genesis, have their money encumbered.