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I think this quote of the prosecutor in Bankman-Frieds' case summarizes it well: "The crypto industry might be new, the players like Sam Bankman-Fried may be ne

I think this quote of the prosecutor in Bankman-Frieds' case summarizes it well: "The crypto industry might be new, the players like Sam Bankman-Fried may be new, but this kind of fraud is as old as time and we have no patience for it".

jgilias 3y ago
Note though that the fraud that the prosecutor addresses here doesn’t have anything to do with crypto per se. As in, it’s not about securities laws, or even AML stuff. The fraud that scam bank man fraud got sentenced for was plain old theft. Taking customers assets (mainly crypto assets) and using it as his personal piggy bank.
- BobaFloutist 3y ago
  That's literally what the prosecutor said.
- kemitchell 3y ago
  > Note though that the fraud that the prosecutor addresses here doesn’t have anything to do with crypto per se. As in, it’s not about securities laws, or even AML stuff. That's playing pretty tight with definitions to push "crypto" out of the picture. SEC's press releases was "SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX". https://www.sec.gov/news/press-release/2022-219 https://www.sec.gov/news/press-release/2022-219 The release said "crypto" ten times.
matheusmoreira 3y ago
Truth be told, the FTX case isn't even a cryptocurrency case. The Bankman essentially ran an unregulated bank. People deposited money into it and he just took it. He pretty much robbed his depositors. It's ironic. Cryptocurrency was supposed to put an end to guys like that by ending the need for banks.
- smodo 3y ago
  Well put. Following that line of thought I’d say that by now crypto has shown that you can never trust a system, in the end you have to trust the people behind it. I find people to be more trustworthy when they go to jail if they do wrong.
  - matheusmoreira 3y ago
    Cryptocurrency was meant to reduce the number of people you need to trust to an absolute minimum. Ideally, the only people you'd have to trust would be world class cryptographers. The whole problem here is people reinvented the entire financial system on top of it. Exchanges are really just banks in disguise. They do fractional reserve banking, they offer cryptocurrency loans, they even have savings accounts.
    - roland35 3y ago
      The thing is... I honestly am not smart enough to trust the cryptography! I guess at a high level I could make some sense of it but there is no way I could fully evaluate any crypto as safe or not.
      - cezart 3y ago
        I think there is great irony in the fact that probably 90% of the people involved in crypto don't understand the math behind the systems they trust so much. They could swear these systems are more trustworthy than traditional banks cause decentralization, smart contracts, cryptography, etc. But all of these are just abstract concepts for them in which they just chose to place their trust, because of vibes or smth.
    - hanniabu 3y ago
      There are permissionless and trustless exchanges like uniswap
      - matheusmoreira 3y ago
deleted 3y ago
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jgilias 3y ago

Note though that the fraud that the prosecutor addresses here doesn’t have anything to do with crypto per se. As in, it’s not about securities laws, or even AML stuff. The fraud that scam bank man fraud got sentenced for was plain old theft. Taking customers assets (mainly crypto assets) and using it as his personal piggy bank.

BobaFloutist 3y ago
That's literally what the prosecutor said.
kemitchell 3y ago
> Note though that the fraud that the prosecutor addresses here doesn’t have anything to do with crypto per se. As in, it’s not about securities laws, or even AML stuff. That's playing pretty tight with definitions to push "crypto" out of the picture. SEC's press releases was "SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX". https://www.sec.gov/news/press-release/2022-219 https://www.sec.gov/news/press-release/2022-219 The release said "crypto" ten times.

matheusmoreira 3y ago

Truth be told, the FTX case isn't even a cryptocurrency case. The Bankman essentially ran an unregulated bank. People deposited money into it and he just took it. He pretty much robbed his depositors. It's ironic. Cryptocurrency was supposed to put an end to guys like that by ending the need for banks.

smodo 3y ago
Well put. Following that line of thought I’d say that by now crypto has shown that you can never trust a system, in the end you have to trust the people behind it. I find people to be more trustworthy when they go to jail if they do wrong.
- matheusmoreira 3y ago
  Cryptocurrency was meant to reduce the number of people you need to trust to an absolute minimum. Ideally, the only people you'd have to trust would be world class cryptographers. The whole problem here is people reinvented the entire financial system on top of it. Exchanges are really just banks in disguise. They do fractional reserve banking, they offer cryptocurrency loans, they even have savings accounts.
  - roland35 3y ago
    The thing is... I honestly am not smart enough to trust the cryptography! I guess at a high level I could make some sense of it but there is no way I could fully evaluate any crypto as safe or not.
    - cezart 3y ago
      I think there is great irony in the fact that probably 90% of the people involved in crypto don't understand the math behind the systems they trust so much. They could swear these systems are more trustworthy than traditional banks cause decentralization, smart contracts, cryptography, etc. But all of these are just abstract concepts for them in which they just chose to place their trust, because of vibes or smth.
  - hanniabu 3y ago
    There are permissionless and trustless exchanges like uniswap
    - matheusmoreira 3y ago

deleted 3y ago

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