> Otherwise, it's being reported as income to the IRS, and most of you are doxxed.
This is an extremely confusing threat, given that sending the coins back would be the taxable event from the IRS's perspective.
Crypto CEO threatens customers after mistakenly sending them millions
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Re: Crypto CEO threatens customers after mistakenly sending them millions
#22Earlier quoted context omitted.
You are assuming it has enough value at the time you liquidate to pay the taxes at the cost basis the transfer took place. Very similar to stock options ending up worthless you owe $large_sum_of_taxes on because the value declined after exercise but before liquidity. 1099ing recipients and causing a race to unload would nuke them.
So, cash out right now?
I cannot recommend selling stolen property, whether to pay taxes on the ill gotten gain or to evade taxes.
The government considers these assets either commodities (CFTC) or securities (SEC), so prosecution is straightforward.
Re: Crypto CEO threatens customers after mistakenly sending them millions
#23Earlier quoted context omitted.
This is fraud. Crypto doesn’t magically make it not fraud. Edit: @hprotagonist, you too! Shouldn’t have to go comment by comment pointing out the fraud suggestions.
how was his suggestion any less fraudulent if the intent is to cash out and not return the money
I was wondering the same thing.
Re: Crypto CEO threatens customers after mistakenly sending them millions
#24Can we please get an engineer from this asshat crypto company to tell us about the bug and how mgmt handled it internally? Do it for the lulz
Not sure but you can check yesterday's discussion:
https://news.ycombinator.com/item?id=28716979
edit: links to technical analysis: https://twitter.com/Mudit__Gupta/status/1443454935639609345
and a 2017 discussion of solidity design issues: https://news.ycombinator.com/item?id=14810008
Re: Crypto CEO threatens customers after mistakenly sending them millions
#25I might start getting into crypto after this. No, but on a serious note, I don’t think cryptocurrency will ever be a sufficient replacement for the US dollar, but I can imagine the infrastructure going into it will produce new, helpful financial tools.
Most of the value in defi is in stablecoins and most prices are quoted in dollars. Some crypto stuff will have good value accrual mechanisms, others wont. The idea crypto displaces the dollar as a reserve currency is insanity.
Re: Crypto CEO threatens customers after mistakenly sending them millions
#26> Otherwise, it's being reported as income to the IRS, and most of you are doxxed. This is an extremely confusing threat, given that sending the coins back would be the taxable event from the IRS's perspective.
He is getting tons of criticism over this. Not only is it not possible to dox anyone with DEFI but defeats the decentralized ethos of DEFI. And also, the 10% bug bounty would also be taxable.
Re: Crypto CEO threatens customers after mistakenly sending them millions
#27This bug happened to the crypto project Compound. I work for a crypto company that has a DeFi product that uses Compound. So I've been deep into following this since it started.
The funds sent to users were "rewards" for using the platform. Compound didn't actually lose any user funds, it was Compound's "governance token" that was given out.
Although user funds were not affected, billions of dollars have been pulled out of lending pools in Compound.
It's really unusual for a crypto project to threaten users like this. Bugs happen all the time, heck, even giant thefts due to bugs happen all the time. Everyone usually just keeps right on doing whatever they were doing.
Unfortunately the bug didn't just hand out tokens to people, it did so by messing up the stored accounting for those "lucky" users. Fixing it is not going to be trivial. Also, the tokens that it handed out already "belong" to people who had "earned" them, but not yet cashed them out. This means that once this bug is fixed, Compound is going to take the funds for this out of their own treasury to refill this so users can be paid (or face some amazing backlash).
To change the smart contracts requires a community vote and a seven day period of review, voting, and timelock. This means that it's staying broken and handing out money for the next week, and people are racing to catch as much of it as they can.
It's an all round mess.
Re: Crypto CEO threatens customers after mistakenly sending them millions
#28Earlier quoted context omitted.
no need to do that. just convert to dai stablecoin and just let it sit for years or split it up among many defi protocols to collect interest. no way to trace it, nor any need to do anything.
This is fraud. Crypto doesn’t magically make it not fraud. Edit: @hprotagonist, you too! Shouldn’t have to go comment by comment pointing out the fraud suggestions.
How is it fraud if the smart contract allowed it?
Actually curious what makes it fraud. Just because one group wants the money back?
Re: Crypto CEO threatens customers after mistakenly sending them millions
#29Earlier quoted context omitted.
This is fraud. Crypto doesn’t magically make it not fraud. Edit: @hprotagonist, you too! Shouldn’t have to go comment by comment pointing out the fraud suggestions.
How is it fraud if the smart contract allowed it? Actually curious what makes it fraud. Just because one group wants the money back?
Lawful intention. What the smart contract dictates isn’t necessarily the final authority, but what the intent was (per legal interpretation of state contract law).
Re: Crypto CEO threatens customers after mistakenly sending them millions
#30Earlier quoted context omitted.
So, cash out right now?
I cannot recommend selling stolen property, whether to pay taxes on the ill gotten gain or to evade taxes. The government considers these assets either commodities (CFTC) or securities (SEC), so prosecution is straightforward.
What makes it stolen property? If the smart contract allowed it…