Crypto CEO threatens customers after mistakenly sending them millions • Hacker News Board

Re: Crypto CEO threatens customers after mistakenly sending them millions

#91

Post by mindslight » Sun, Oct 03, 2021, 3:03 PM UTC

toomuchtodo wrote: post #33

systemsignal wrote: post #30

Earlier quoted context omitted.

What makes it stolen property? If the smart contract allowed it…

The sender did not mean to send it, making it misappropriation or unjust enrichment. Edit: (Re Revlon) https://www.npr.org/2021/07/23/1019909860/banque-worms (NPR piece on the Revlon incident) > Elisabeth de Fontenay is a professor at Duke University's law school, and she used to be a corporate lawyer. > DE FONTENAY: When payments are made, for example, from banks to individuals like all of us in error, we have to gi…

The entire question is whether this executed smart contract will be treated as an actual binding contract.

I see no reason why it should not be - parties entered into it freely for adequate consideration. Parties were well aware they were entering into a contract ("smart contract"), and by the technical format of the contract did contemplate that they could end up with an unfavorable result due to "bugs" or other unforgiving consequences of its extremely formal definition.

This is the crux of the matter. If you've got a reason why this smart contract could possibly not end up being treated as a contract, then you need to make that argument. You can't just keep asserting that the payments are mistaken transfers without an actual argument.

Furthermore, unless/until setting aside smart contracts were to become well established case law, recipients of the windfall should be able to rely on such reasoning, making keeping the tokens decidedly not fraud or conversion.

Re: Crypto CEO threatens customers after mistakenly sending them millions

#92

Post by nightski » Sun, Oct 03, 2021, 3:10 PM UTC

forty wrote: post #47

danielvf wrote: post #27

This 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…

The fact that you can give away millions by mistake and do nothing about it then break the systems then do not much about it says a lot about crypto currency practicality ;) I wonder when this madness is going to stop.

I mean, maybe not on this scale, but this happens with checking accounts all the time. Wire the money to the wrong account #? Tough luck.

Re: Crypto CEO threatens customers after mistakenly sending them millions

#93

Post by chollida1 » Sun, Oct 03, 2021, 3:11 PM UTC

I think its pretty telling about the state of defi.

That a CEO of a defi project thinks that threatening to make people pay the taxes they should already be paying is some sort of leverage.

If I were running the IRS I'd be looking at Robert Leshner to make sure he's paying all the taxes he should be on his crypto given that he thinks that threatening to report trades to the IRS(that he already should be doing) will make people return their crypto gains:)

It's extra rich that this same person told congress that they couldn't possibly report to the IRS these trades as thry don't have the proper KYC docs for traders, but when those traders have "his" crypto all of a sudden he can find out who they are:)

Re: Crypto CEO threatens customers after mistakenly sending them millions

#94

Post by aqme28 » Sun, Oct 03, 2021, 3:12 PM UTC

woodruffw wrote: post #21

> 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.

It's very strange as a threat because it doesn't make sense from an incentives standpoint.

"Pay me 20 million dollars or you'll have to pay 8 million to the IRS."

That's not a difficult calculation.

It also makes the money sound more legitimate. If this was theft or hacking, I'd be afraid of criminal proceedings. But I'm not afraid of paying the IRS money when I can easily afford it.

The whole thing speaks to the CEO's worldview in a very bizarre way.

Re: Crypto CEO threatens customers after mistakenly sending them millions

#95

Post by nightski » Sun, Oct 03, 2021, 3:12 PM UTC

jollybean wrote: post #82

leokennis wrote: post #71

Earlier quoted context omitted.

I think most crypto-supporters overestimate how much of a police state modern banking is, and underestimate how much of a wild west the current crypto ecosystem is. They’re willing to trade a system with reasonable and democratic oversight for a “free for all” shark infested pool that will rip from their hands their retirement fund just before they mean to retire.

This is a thoughtful comment. I wonder how much central banks and treasuries could do to engage people on what they actually do. It's still ripe for disruption on some level, but still, people have no idea I think.

It's not thoughtful, it is hyperbolic. That's not what is going on here and this is not crypto in general. These are smart contracts which the vast majority of crypto users have no involvement in.

Re: Crypto CEO threatens customers after mistakenly sending them millions

#96

Post by Havoc » Sun, Oct 03, 2021, 3:18 PM UTC

danielvf wrote: post #27

This 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…

>It's an all round mess.

It's a tiny fraction of their market cap. Mistakes happen and are fixable.

The CEOs reaction on the other hand is a complete write-off. Threatening to harm users for a situation that isn't their doing but rather yours? Childish at best

Re: Crypto CEO threatens customers after mistakenly sending them millions

#97

Post by MilnerRoute » Sun, Oct 03, 2021, 3:28 PM UTC

That headline is really misleading. That "threatening" tweet (Thursday) was followed by an apology two hours later.

"I'm trying to do anything I can to help the community get some of its COMP back, and this was a bone-headed tweet / approach. That's on me," said Leshner. "Luckily, the community is much bigger, and smarter, than just me. I appreciate your ridicule and support...."

https://twitter.com/rleshner/status/1443759189722116097

Since then he's been engaging with the community, thanking users who are returning their money. In an interview with CoinDesk, he pointed out that "I'm personally hopeful users will return funds to the community. It's not my property, it's not their property, it's the community's property...."

https://www.coindesk.com/tech/2021/10/01/compound-founder-sa...

Re: Crypto CEO threatens customers after mistakenly sending them millions

#98

Post by toomuchtodo » Sun, Oct 03, 2021, 3:28 PM UTC

mindslight wrote: post #91

toomuchtodo wrote: post #33

Earlier quoted context omitted.

The sender did not mean to send it, making it misappropriation or unjust enrichment. Edit: (Re Revlon) https://www.npr.org/2021/07/23/1019909860/banque-worms (NPR piece on the Revlon incident) > Elisabeth de Fontenay is a professor at Duke University's law school, and she used to be a corporate lawyer. > DE FONTENAY: When payments are made, for example, from banks to individuals like all of us in error, we have to gi…

The entire question is whether this executed smart contract will be treated as an actual binding contract. I see no reason why it should not be - parties entered into it freely for adequate consideration. Parties were well aware they were entering into a contract ("smart contract"), and by the technical format of the contract did contemplate that they could end up with an unfavorable result due to "bugs" or other unf…

> I see no reason why it should not be

I'm arguing the opposite. Your assertion is that a smart contract will be treated as a binding contract. Provide case law and statute that that is the case. Your belief at the moment is hope that a smart contract will be interpreted favorably by the judiciary. If you can't provide such citations, backing your assertions, it seems disingenuous to attempt to twist contract law to fit crypto reality ("taking the money and running is legal"), and even worse to advise people who have received ill gotten gains through unjust enrichment to keep them.

As always, the question is not only, "what does the contract say?" but also "how will the judge interpret the claim?" I've provided citations throughout this thread for my claims relying on existing case law.

Re: Crypto CEO threatens customers after mistakenly sending them millions

#99

Post by 908087 » Sun, Oct 03, 2021, 3:33 PM UTC

danielvf wrote: post #27

This 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…

> 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.

What a great advertisement this is for crypto.

Re: Crypto CEO threatens customers after mistakenly sending them millions

#100

Post by ethanbond » Sun, Oct 03, 2021, 3:36 PM UTC

bradwood wrote: post #86

forty wrote: post #74

Earlier quoted context omitted.

Yes, it's true that in case you are in the legendary fascist state that steals your money but allows you the hide your money in crypto currency it can be useful ;) it reminds me of https://xkcd.com/538/ (note that I do not count government taxes in democratic countries as stealing, while I do think tax avoidance is stealing in that case).

And what would you call the US dollar's monetary expansion of over 40% [1] since the start of the pandemic, if not stealing? The Cantillon Effect has never been stronger, but those that continue to measure their financial worth in a unit of account that is shrinking in its purchasing power every day are missing the point. The system _is_ stealing your savings! [1]: https://fred.stlouisfed.org/series/M1SL

Let’s not act like the infusions were for no reason. Many people are willing to incur some inflation and inflation risk in a gamble to avert a near-certain societal level catastrophe.