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I don't think they are claiming that it was real money, but most people who weren't named Sam Bankman-Fried didn't know it was a scam. I put my money into Vang

I don't think they are claiming that it was real money, but most people who weren't named Sam Bankman-Fried didn't know it was a scam. I put my money into Vanguard ETFs. I think that's generally considered an OK thing to do. I might see my returns go up, and so I decide to remodel my kitchen. If it turned out that Vanguard was actually not doing what they claimed, and someone posts about how "paper wins inside a scam were never real money", well yeah, no shit, but I didn't know it was a scam. If I had known that Gemini Earn was a scam, I don't think I would have given them my money.

pavlov 3y ago
I’m sorry that happened. I didn’t mean for my reply to be so dismissive. I was trying to make the point that compensating scam victims based on the asset value that was claimed by the scammers (rather than the money put in by the victims) would be very difficult in the general case. Imagine a pyramid scheme that promises 50% daily returns, and shows you the gains on a website. You can only get some of that money out when you’ve recruited N people as investors. Everyone at the bottom of the pyramid is seeing a massive paper gain when the scheme collapses. There might not be enough money in the world to compensate them for the asset value they imagined. FTX was a milder version of the same because they showed users asset values but didn’t actually have matching backing assets. (Yes, banks do this too, in the sense that they don’t hold cash to account for the sum of all balances. That’s why they are so heavily regulated.)