Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls” • Hacker News Board

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#111

Post by yrral » Thu, Dec 16, 2021, 4:54 PM UTC

TacticalCoder wrote: post #89

AlexandrB wrote: post #8

In related news, Tether has minted $3B USDT in the last month: https://beincrypto.com/tether-mints-three-billion-usdt-past-...

Yes, and although likely a scam, here's another datapoint: Coinbase, an Y combinator unicorn, is behind Centre/Circle and the USDC stable coin. And there are now $41.5 bn USDC circulating. At one point it was billion of USDT circulating and USDC didn't exist yet. Then USDC began to took off and there were, out of memory, $5 bn USDC and $23 bn USDT. But, overall, the trajectory is clear: USDC is growing faster than US…

Another datapoint: USDC minted 7b in the last 30 days. Does 3b tether in the same time period seem unreasonable?

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#112

Post by [deleted] » Thu, Dec 16, 2021, 4:54 PM UTC

TacticalCoder wrote: post #89

AlexandrB wrote: post #8

In related news, Tether has minted $3B USDT in the last month: https://beincrypto.com/tether-mints-three-billion-usdt-past-...

Yes, and although likely a scam, here's another datapoint: Coinbase, an Y combinator unicorn, is behind Centre/Circle and the USDC stable coin. And there are now $41.5 bn USDC circulating. At one point it was billion of USDT circulating and USDC didn't exist yet. Then USDC began to took off and there were, out of memory, $5 bn USDC and $23 bn USDT. But, overall, the trajectory is clear: USDC is growing faster than US…

[deleted]

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#113

Post by acdha » Thu, Dec 16, 2021, 4:54 PM UTC

kyruzic wrote: post #70

BoppreH wrote: post #24

This is my biggest complaint against cryptocurrencies in general. I'm happy with my bank's fraud protection. How can crypto users protect themselves without recreating traditional banking? Bitcoin was released ~13 years ago, and wallet/transaction security has been one of the most important requirements since then (along with scalability, but let's not go there). If trillion dollar market caps and god-knows-how-many…

Use a trusted exchange if you are worried about that. Holding crypto in a wallet is the equivalent of keeping cash in your wallet. No bank in the world will care if someone steals your wallet.

> Use a trusted exchange if you are worried about that.

This doesn't protect against your credentials being compromised, and it's not useful advice unless you can explain your criteria for declaring an exchange trustworthy and how that would have excluded all of the exchanges which have lost their customers' money.

> No bank in the world will care if someone steals your wallet.

Yes, this is why most people use regulated banks which have the fraud handling and reversal processes which cryptocurrencies lack. It's not just that you don't have to carry it with you, it's that there are things like verification and reversal processes which mean that individual people are both less likely to lose money in the first place and more likely to get it back. If you've ever bought a house, the process of verifying a large amount of money being transferred is very different from writing a small check whereas all you need is a typo to lose cryptocurrencies without recourse.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#114

Post by vmception » Thu, Dec 16, 2021, 4:54 PM UTC

PragmaticPulp wrote: post #106

vmception wrote: post #74

I think "rug pulls" is not defined well. One example of a "rug pull" is that the team provided liquidity to the AMM liquidity pool, and then removed it, leaving people with no where to trade the token. Its honestly hard for me to call that a scam, although I understand the community expectation being undermined. First: the SEC exacerbates this reality. Tokens that don't want to be considered a security have to consid…

> One example of a "rug pull" is that the team provided liquidity to the AMM liquidity pool, and then removed it, leaving people with no where to trade the token. Its honestly hard for me to call that a scam If the team went through all of these steps with the intention of pumping the value of the coin, hyping others into buying it, and then extracting as much money from them as possible with no intentions of helping…

And you think thats what I just did here? Describing why the categorization is wrong to you is a symptom of victim blaming?

My point stands that the community can do what the team did but fail to take further risk or organize. They disperse just like the issuer did, when in fact they do all have agency and can fill the vacuum. unless the token was backdoored, then we can call it a scam.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#115

Post by throwaway6734 » Thu, Dec 16, 2021, 4:55 PM UTC

pjc50 wrote: post #87

bilbo0s wrote: post #82

Earlier quoted context omitted.

Make it a business decision. Find out how much money we can get policing crypto. We can even charge a greater percentage of potential funds recovered to extract an amount that would make it worth our while. At any rate, with that data we could determine if the money is better spent policing tax cheats. In short if we're going to get paid well, we should help. If not? Well, sorry crypto bros. Sucks to be you.

I mean, why not both? There's an entertaining subgenre of police blotter reports where people report their illegal drugs stolen. If people report crypto assets stolen (which they very rarely do), maybe have a look at how they acquired them and whether it was reported to the revenue first.

What's the incentive to spending tax money to help protect a system who's focus is to undermine the state's control over its currency?

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#116

Post by nradov » Thu, Dec 16, 2021, 4:56 PM UTC

Jerrrry wrote: post #93

JumpCrisscross wrote: post #53

The “I have no sympathy for the victims” comments are crass. But there is a legitimate question of how much law enforcement these crimes deserve. Arizona has a stupid motorists law [1]. If a car “becomes stranded after driving around barricades to enter a flooded stretch of roadway,” the driver “may be charged for the cost of their rescue.” A similar concept for crypto may be necessary. Law enforcement will pursue. B…

Technical hacks against the protocol and implementations are fair game, and is the implicit incentive that balances the market. Social engineering and financial hacks are not fair game, and are "illicit" in the sense that crypto is obviously an international martial zone. Exhaustively brute forcing a keyspace is valid, making your username an XSS to steal funds from an insecure page/downstream app is not valid. Findi…

You obviously don't understand basic contract law. US Civil courts routinely apply the principle of equity when interpreting written contracts. Loopholes and errors are disregarded when they violate the clear intent of the agreement.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#117

Post by Sharlin » Thu, Dec 16, 2021, 4:56 PM UTC

pjc50 wrote: post #98

ajross wrote: post #96

Earlier quoted context omitted.

That's a bit circular though. I mean, to be clear I don't agree with the upthread point that we should deemphasize crypto crimes. But that said... the trust in the DeFi economy is being eroded right now , and for some very rational reasons. It's certainly not the government's job to jump in and prop up financial systems in which it's not involved. Its interest is in protecting its own citizens from criminality, not i…

> trust in the DeFi economy I thought the whole point was to be trustless?

Having trust in a system is different from trusting individual actors. You have to trust something, there’s no way around it.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#118

Post by mdoms » Thu, Dec 16, 2021, 4:56 PM UTC

TacticalCoder wrote: post #89

AlexandrB wrote: post #8

In related news, Tether has minted $3B USDT in the last month: https://beincrypto.com/tether-mints-three-billion-usdt-past-...

Yes, and although likely a scam, here's another datapoint: Coinbase, an Y combinator unicorn, is behind Centre/Circle and the USDC stable coin. And there are now $41.5 bn USDC circulating. At one point it was billion of USDT circulating and USDC didn't exist yet. Then USDC began to took off and there were, out of memory, $5 bn USDC and $23 bn USDT. But, overall, the trajectory is clear: USDC is growing faster than US…

> It's an american company, with real people behind it. It's not some scammy thing in the Bahamas.

Oh yes I forgot Americans can't be scammers.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#119

Post by CincinnatiMan » Thu, Dec 16, 2021, 4:56 PM UTC

anm89 wrote: post #83

It's hard to understand what to do about this without making some sort of congressional committee to decide which cryptos are good ones and which aren't (and that will obviously never happen and shouldn't) People have a right to spend their money on things. If the choose to spend their money on nonsense that has no contractual obligation to return their funds to them that seems like a legal transaction when the funds…

To a certain extent there's value in stopping individuals from giving away their entire networth though, whether they lose it through insecure crypto or to fraudsters calling about "an amazing investment opportunity". People whose lives are wiped out don't simply cease to exist, they very well can become a burden on other members of society.

A lot of decisions we make in the modern day have guardrails set up to protect the individual to a varying extent (which is often a topic of politics), so it may be we eventually get guardrails in the crypto space as well.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#120

Post by BoppreH » Thu, Dec 16, 2021, 4:57 PM UTC

sroussey wrote: post #92

BoppreH wrote: post #84

Earlier quoted context omitted.

Everyone should be worried about that, and if your suggestion is to use exchanges, that just makes them de-facto banks. Now you have a traditional banking system on top of a slow and expensive settlement layer.

Slow and expensive is relative… try transferring money internationally.

I do, regularly, and it takes a few dollars and a few days to arrive. That sucks. But this comes from following regulations, and fees for the useful service (e.g. protection).

Right now international cryptocurrency transfers are a legally gray area, and have the aforementioned lack of protections. So the expensive and slow, but legal and safe, international transfers are a service that cryptocurrencies don't offer at all. No reason to think it'll be faster and cheaper when it's offered.