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Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

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Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#91

Post by s73ver_ »

csomar wrote: post #9

While I'd enjoy a good detective journalism, this article is just making claims out of thin air. And here is one: > However, this doesn’t stop Bitfinex from tripping over their shoelaces to immediately list a fork which doesn’t exist, in order to make money off of suckers. That is not correct. Bitfinex didn't list Bitcoin Gold. They listed a future contract of Bitcoin Gold (though the naming "token" is a bit confusin…

"That is not correct. Bitfinex didn't list Bitcoin Gold. They listed a future contract of Bitcoin Gold (though the naming "token" is a bit confusing)."

That's still pretty scammy.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#92

Post by AlexandrB »

Aledgerly wrote: post #60
AlexandrB wrote: post #59

Earlier quoted context omitted.

Can you provide a link please? All I see in the comments to the researcher's piece is an IOTA advisor threatening a libel suit - a really good sign that they "really care" about their technical issues.

I highly suggest you read https://blog.iota.org/curl-disclosure-beyond-the-headline-18...

Ok. I've read it. Nowhere does it mention IOTA contacting the researchers in question in May.

This article also answers the wrong question. If the crytocurrency is not cryptographically secure all that stands between an attacker and a victim is a piece of malware or social engineering. The fact that the researchers didn't go all the way and document a specific attack that could be performed tomorrow does not mean that Curl was secure in practice.

Finally this continues to fail to address many salient points. Like why use trits? Why wasn't kekkac used from day one?

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#94

Post by gwern »

runeks wrote: post #82
cm2187 wrote: post #16

Earlier quoted context omitted.

I am not sure I follow. Counterparty risk should push the price down, not up. This thing is not worth as much because there is a significant risk your investment may go away because of a bug or a mistake.

> Counterparty risk should push the price down, not up. Not if the counterparty risk causes you to be unable to withdraw national currency, thus forcing you to buy bitcoins for national currency and then withdraw the bitcoins. The only way for the price to go down, in a scenario like this, is if it's possible to sell bitcoins on the exchange (thus pushing down the price) and withdraw the proceeds. In a BTCUSD market,…

It would only push the price up on the untrustworthy exchanges, and it would lower the price everywhere else because it indicates the asset is not useful, it could be stolen & dumped on the market, it discourages anyone from getting in, it forces them to use alternative usually less convenient exchanges, etc. And even the counterparty risk doesn't produce that much increase: right up to the end when it was too late, the Mtgox premium was only like 10%. Such a mechanism can't possibly explain all or even a little bit of a runup from $2k to $7k (not to mention, the market cap being an order of magnitude or two higher).

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#95

Post by lawnchair_larry »

annabellish wrote: post #81
rudiger wrote: post #49

Earlier quoted context omitted.

> There were no hardware wallets in the days of MtGox, which meant that it was extremely hard to secure Bitcoins. It was never difficult to hold bitcoins. All you had to do was send them to an address you control with a long passphrase.

What world are you living in? Software wallets are and always will be vulnerable to incalculable numbers of side-channel attacks that they cannot possibly defend against. It is intrinsic to running on a general purpose OS. Hardware wallets are the only method of having anything anywhere _near_ security here.

Software wallets have a lot of risks, but side channel attacks are not one of them. Hardware also does not necessarily mitigate that.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#96

Post by lawnchair_larry »

darawk wrote: post #90

Bitfinex didn't force anyone to convert to equity. I was a bitfinex customer. I lost money in the hack. They certainly paid me back. These silly criticisms of them need to stop. They did the best they could with a bad situation. I wouldn't have wanted them to do anything differently than exactly what they did. They allowed people to convert to equity as an option . A choice . They paid back everyone who didn't choose…

All scams start with a "choice". That is not relevant, and the author is right to educate "choosers" by demonstrating the information asymmetry that leads to them going broke by choosing incorrectly.

It's great for you that you were able to be repaid at the cost of other victims who were robbed and swindled, but that isn't a responsible way to handle these things, and is most definitely not a model for handling losses. It's illegal for a reason.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#97

Post by martinko »

the_stc wrote: post #58
martinko wrote: post #10

Lots of bullshit. Just a few points: A) Iota is a legit currency trying to do something new in the crypto space. B) The listing Bitcoin gold did not 'create' 2 bn usd - if you tried to liquidate even a fraction of that, you would drive the price to 0. There was significant demand from trader and speculators for its listing (not that I agree with it, but anyway). C) Saying that a company that generates 30 mil. usd in…

IOTA made their own crypto, then when got called on it they denied it mattered at first. Then they backed down and said it was intentional! So that they could destroy anyone else using their open source code. When pressed to promise that they had not left more backdoors in, they refused. Of course they had to refuse, these were accidental bugs rolling their own stuff. That looks totally incompetent to me. Then mentio…

Fair enough, the currency has questionable potential. However, the article seems to imply that bfx lists some questionable currencies, and I feel that that characterization is misleading.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#98

Post by darawk »

lawnchair_larry wrote: post #96
darawk wrote: post #90

Bitfinex didn't force anyone to convert to equity. I was a bitfinex customer. I lost money in the hack. They certainly paid me back. These silly criticisms of them need to stop. They did the best they could with a bad situation. I wouldn't have wanted them to do anything differently than exactly what they did. They allowed people to convert to equity as an option . A choice . They paid back everyone who didn't choose…

All scams start with a "choice". That is not relevant, and the author is right to educate "choosers" by demonstrating the information asymmetry that leads to them going broke by choosing incorrectly. It's great for you that you were able to be repaid at the cost of other victims who were robbed and swindled, but that isn't a responsible way to handle these things, and is most definitely not a model for handling losse…

What information asymmetry? They didn't lie about anything. They offered people a choice between repayment and equity. Some people chose equity, and to be quite honest, I wish I had too. It seems like they're doing very well.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#99

Post by hedgedoops2 »

ojr wrote: post #24
keypusher wrote: post #21

This guy has been trying to spread doubt about bitfinex for a long time, but never has much to back it up. A few months ago he went on a big campaign against Tether (tokens associated with Bitfinex), claiming they were created out of thin air. Tether then completed and released an audit by a professional, accredited team of their bank balances (1). I don't personally use Bitfinex, and it's possible some of these accu…

They stole 15% of every users Bitcoin Cash, it was suppose to be a 1:1 split, but since they don't like bitcoin cash and lists it as bcash, that might be reason why, I expect more "technical difficulties" during the next fork https://news.bitcoin.com/bitfinex-bitcoin-cash-deposits-with...

They didn't 'steal' this, they transferred it to lenders (and/or short sellers).

Bitfinex (unwisely) specified that during the Bcash-Bitcoin fork, lenders would get Bcash for lent-out Bitcoin. However if Alice lends 1 Bitcoin to Bob before the fork and Bob sells it to Carol then Bitfinex will owe both Alice and Carol one Bcash after the fork, but they will only have one to distribute. So they split it up.

This can get worse when Carol lends it out again, etc, etc, and in the end Zack withdraws the Bitcoin. Unbounded liability and potentially no assets. So them paying out 15% less than expected was a pretty good result.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#100

Post by bdcravens »

panarky wrote: post #87
thisisit wrote: post #14

Reading this article made me wonder - how much of the bitcoin rally is due to counterparty risks? If I remember correctly the last ramp up happened during Mt. Gox era. They were having USD withdrawal issues which resulted in BTC prices being very high on the exchange. But it din't deter them from publishing prices and making markets. Now is the case of Bitfinex suffered from a hack like Mt. Gox and are trying to stay…

If this was true then you'd expect the exchange rate on Bitfinex to be much higher than other exchanges. If you can't get USD out of Bitfinex, you'd buy BTC and withdraw, pushing the exchange rate up on Bitfinex. Then you'd sell the BTC on another exchange, pushing the exchange rate down there. We're not seeing that: https://imgur.com/a/2vxV7

> If this was true then you'd expect the exchange rate on Bitfinex to be much higher than other exchanges.

For a while earlier this year, it was

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