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

blog.chainalysis.com

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

#151

Post by elliotec »

mbesto wrote: post #77
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…

This is my favorite story about crypto fraud protection: The Winklevosses came up with an elaborate system to store and secure their own private keys. They cut up printouts of their private keys into pieces and then distributed them in envelopes to safe deposit boxes around the country, so if one envelope were stolen the thief would not have the entire key. https://www.nytimes.com/2017/12/19/technology/bitcoin-winkle…

This key storage system is a now very common and (ostensibly) very secure model that has been iterated on and is in wide use, especially for hardware wallets like Trezor. The model they use is called the "Shamir Backup," here's more info: https://wiki.trezor.io/Shamir_backup

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

#152

Post by BoppreH »

SubiculumCode wrote: post #57
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…

Okay, invest in a top 40 crypto. Defi scams usually involve outrageous APR and reward claims from a sketchy Telegram channel actively trying to recruit ignorant or vulnerable individuals. Same as every other scammer, but with the new and improved hype words

I don't want to speculate in cryptocurrencies, I want to use them for their intended purpose, financial transactions. The problem is that I can't do that at anywhere near the safety of my traditional banking institution.

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

#153

Post by YetAnotherNick »

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.

Have you heard of Paypal?

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

#154

Post by Jerrrry »

javajosh wrote: post #142
nradov wrote: post #116

Earlier quoted context omitted.

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.

Nothing annoys me more than arrogant ignorance. It's like, pick one! You speak as if these are handled as federal matters, and they are not. Contract disputes are handed as local matters, usually in a local district court. Furthermore, when you talk about the court you're talking about a Judge. The Judge gets final say and they can take their sweet time, regard or disregard anything they want. In local matters, Judge…

> I can't stress enough the arbitrariness, and supreme, unaccountably, of a local judge's decisions.

Exactly. Code-contract signers hate this, and go out of their way to avoid the possibility of this interference.

Judges should tell crypto cases to get rightfully fucked.

If I appear and sue a drug dealer for giving me fake 100's, I'd get laughed at.

Considering crypto is just an massive abstraction layer to hide the online drug trade, the courts should similarly laugh at these _technical_ exploits, in the context of Euth-shit code. Because it's sole explicit purpose of existence is to conduct business without arbitration.

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

#155

Post by rauljordan2020 »

BoppreH wrote: post #60
idiotsecant wrote: post #28

Earlier quoted context omitted.

I think the way you protect yourself is the same way people protected themselves before credit cards were widely used. By not spending your cash on things that are scams. Somehow people managed to survive before banks offered their rent seeking / fraud protection and I think they'd be OK without them if push came to shove.

Nope, because cryptocurrencies also removed all other protections. - The scams are online, so I cannot knock on the scammer's door with an angry mob and ask for our money back. - Pseudonymous identities means scammers have strong protections against being sued or prosecuted. - Digital wallets, as opposed to cash in bank vaults, means that you can lose all your savings in one mistake. - Complete lack of trusted third…

One could, for example, create a smart contract that has protection mechanisms in place. At the end of the day, smart contracts are programmable, so you could code your own which has appeal mechanisms as consumers are used to. For example, one could create a highly insecure website for payments on the Internet. The problem is not the Internet, it is the insecure website.

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

#156

Post by meheleventyone »

Jerrrry wrote: post #126
opportune wrote: post #109

Earlier quoted context omitted.

Fair game and valid according to whom? You cannot legally rob a bank just because they left it unlocked and unmanned. It might be possible to take crypto due to a bug in a protocol, and arguably justifiable, but that doesn’t mean it would hold up in court if you were identified as the one using the exploit.

Socially acceptable. Because I am not going to acknowledge or respect a Turkish summons. Although I would expect a Turkish hit squad. >You cannot legally rob a bank just because they left it unlocked and unmanned. Exactly - because it isn't a bank, it is a bunch of cash on the street, if it was unlocked and unmanned. And even if there was a clear Sticky Note with foreboding text, you would be in the clear to pocket a…

I found someone's car keys in the street this morning. I'm pretty sure that didn't entitle me to their car.

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

#157

Post by nradov »

javajosh wrote: post #142
nradov wrote: post #116

Earlier quoted context omitted.

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.

Nothing annoys me more than arrogant ignorance. It's like, pick one! You speak as if these are handled as federal matters, and they are not. Contract disputes are handed as local matters, usually in a local district court. Furthermore, when you talk about the court you're talking about a Judge. The Judge gets final say and they can take their sweet time, regard or disregard anything they want. In local matters, Judge…

No that's not how it works. The same basic rules of contract law apply in federal, state, and local courts with only minor variations.

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

#158

Post by shakna »

Jerrrry wrote: post #126
opportune wrote: post #109

Earlier quoted context omitted.

Fair game and valid according to whom? You cannot legally rob a bank just because they left it unlocked and unmanned. It might be possible to take crypto due to a bug in a protocol, and arguably justifiable, but that doesn’t mean it would hold up in court if you were identified as the one using the exploit.

Socially acceptable. Because I am not going to acknowledge or respect a Turkish summons. Although I would expect a Turkish hit squad. >You cannot legally rob a bank just because they left it unlocked and unmanned. Exactly - because it isn't a bank, it is a bunch of cash on the street, if it was unlocked and unmanned. And even if there was a clear Sticky Note with foreboding text, you would be in the clear to pocket a…

> And even if there was a clear Sticky Note with foreboding text, you would be in the clear to pocket a stack of cash sitting on the sidewalk, left unattended, guarded only with a sticky note.

That's not true, and not true globally. Unattended valuables being taken is still theft. Though prosecution is rare, it still happens [0].

[0] https://www.macaupostdaily.com/article12506.html

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

#159

Post by surfingdino »

jcrawfordor wrote: post #136
sroussey wrote: post #92

Earlier quoted context omitted.

Slow and expensive is relative… try transferring money internationally.

Is that really that true any more? From my podunk credit union I have used SWIFT to send overseas and it took under a minute and cost me $20. That's both faster and cheaper than Ethereum transactions. It's costlier than Bitcoin but not that much, and still faster. And that's wire transfer, the expensive bank to bank option... Western Union has been faster than Bitcoin for decades and cheaper for probably a decade now…

Try transferring money to a legitimate business in another country (in the EU) that got blacklisted by the payment operators. Such as a regulated crypto exchange. They are regulated, you have money you paid tax on, but your bank decides whether or not you are allowed that payment and will not give you legal reasons for stopping/reverting payment. May even choose to close your account if you argue with them. With crypto, all you need is funds in your wallet and the recipient's address. Can you see the difference now?

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

#160

Post by dmitriid »

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.

All scammers are real companies with real people behind them. Until they aren't. Location of a company doesn't matter.

"Ponzi Scheme" literally comes from a man who was scamming his victims in the US and Canada.

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