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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”

#291

Post by tjungblut »

chefandy wrote: post #233
duplicited wrote: post #204

Crypto is ridden with rugpulls. It’s extremely hard to find a diamond in the rough and you’re going to lose money doing it. Look for projects that focus on building community rather than pumping and dumping. I’ve been dabbling in DogeBonk and it’s funny how other “bonk” coins keep getting rug pulled around it while DogeBonk keeps on going

Do you have an example of a particularly well-done rug pull that would help this layman understand the scam better? I totally understand why folks fell for Bernie Madoff's scheme. He had a brick and mortar office, a stellar reputation, and a relatively well-known face. Revealing his scam destroyed his life and he couldn't have easily disappeared into thin air before facing consequences. His clients are no better off,…

Checkout what squid (from the squid game series on netflix) did very recently.

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

#292

Post by [deleted] »

babyshake wrote: post #223
arcticbull wrote: post #207

Earlier quoted context omitted.

It’s easy not to have sympathy because these folks are the ones railing against the banks and the government and the establishment and police - confident they don’t need them because they’re all in on a system the vast majority doesn’t understand the first thing about. But they’ll demean and criticize anyone who suggests their magic free money machine might not be all it’s cracked up to be. They’ve been warned so man…

Is that really a fact, that 10% of the value locked into DeFi was stolen this year? I would think that most of the TVL would accrue to the more blue chip protocols (Aave, Uniswap, Compound, etc.) and to my knowledge these haven't been affected much by these big hacks.

[deleted]

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

#293

Post by AnthonyMouse »

shakna wrote: post #158
Jerrrry wrote: post #126

Earlier quoted context omitted.

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

It's not a matter of whether it's theft. Of course it is.

But if you leave your valuables in the street unattended and then come back shocked to discover that they aren't where you left them, this is not a problem that requires new legislation to solve. The solution to preventing this from happening to you in the future is quite obvious and doesn't involve the government.

And if the government manages to catch the thieves, great. But if they don't, c'est la vie.

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

#294

Post by Jerrrry »

dvt wrote: post #290
Jerrrry wrote: post #226

Earlier quoted context omitted.

"have fun staying poor," he said, clicking on the coin roulette, eyes never leaving his plugged in android tablet, physically hot to the touch from the max CPU load. "i am going to retire in 5 years. have you heard of prove-your-steaks? its gonna change crypto. you can get 20% back, just lock up your starving kids Earned Income Tax Credit for a year, and you'll make $500!" "have you heard of this new shitcoin? probab…

"Hey I just invested $2000 in options a few days ago, what's a margin call?" "Turns out my pension fund was investing in BBB- CDOs, now they've gone BBBust" The argument that you can't (or don't) get burned in non-crypto markets is made in bad faith.

You cannot get margin called on a cash account, because you cannot make positions that are not 100% collateral covered, unless you have 25k. Then you can do that, and trade more than 3 times a week (and don't have to wait til settlement)

Pension funds don't deserve to go bust, but shouldn't be bailed out if they fail to diversify their portfolio.

There are a lot more safe-gaurds in investing, because all these games have been played before.

But those require consent too - with crypto, someone can, and will, irrevocably steal your funds without possible recourse.

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

#295

Post by spyder »

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…

If someone uses your credit card or other account info to withdraw cash then the bank cannot reverse that, similarly to crypto transactions. The protection is having an insurance fund to reimburse affected clients. Crypto projects can do the same thing but they rarely do it yet. There are projects like nexusmutual.io where you can get covered against smart contract failure & exchange hacks. But even if you would be more protected against frauds in crypto, it has a lot to improve to get closer to it's promises because it's still far from it.

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

#296

Post by DanHulton »

dvt wrote: post #290
Jerrrry wrote: post #226

Earlier quoted context omitted.

"have fun staying poor," he said, clicking on the coin roulette, eyes never leaving his plugged in android tablet, physically hot to the touch from the max CPU load. "i am going to retire in 5 years. have you heard of prove-your-steaks? its gonna change crypto. you can get 20% back, just lock up your starving kids Earned Income Tax Credit for a year, and you'll make $500!" "have you heard of this new shitcoin? probab…

"Hey I just invested $2000 in options a few days ago, what's a margin call?" "Turns out my pension fund was investing in BBB- CDOs, now they've gone BBBust" The argument that you can't (or don't) get burned in non-crypto markets is made in bad faith.

That wasn't the argument being made, like at all. Your argument is actually the one being made in bad faith.

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

#297

Post by tenebrisalietum »

amitkgupta84 wrote: post #258

> The most important takeaway is to avoid new tokens that haven’t undergone a code audit. Code audits are a process by which a third-party firm analyzes the code of the smart contract behind a new token or other DeFi project, and publicly confirms that the contract’s governance rules are iron clad and contain no mechanisms that would allow for the developers to make off with investors’ funds. But how do you know whic…

In the US:

financial -> 2008 subprime loan crisis, recent inflation

groceries -> couldn't buy toilet paper at the start of the pandemic, still some lingering supply issues, prices going up

restaurants -> many not open reliable hours anymore, many closing

medical -> costs way too high and continue to rise, hospitals oversaturated with patients from time to time, nurses quitting

All of it is ultimately backed by laws, systems, real people who can be held accountable -> maybe if you are rich

I can't fault the average-income (or slightly higher/lower) person for having the point of view that these are starting to fall apart and aspects of DeFi becoming attractive, even though the practicalities have a long way to go before they would become anywhere near as foundational.

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

#298

Post by spinny »

opportune wrote: post #109
Jerrrry wrote: post #93

Earlier quoted context omitted.

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…

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.

It's a bit unfair to make that comparison. Most technical hacks are always present until somebody abuses it, to make a fair comparison the bank would have to _always_ be left unlocked and unmanned

The guarantee that a bank gives is not the same guarantee that a smart contract gives you. the bank guarantees the safety of your money, the smart contract guarantees that it will as stated in the code.

It's on the the contract dev to write the correct thing and on the contract user to determine if the does what is "says on the thin"

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

#299

Post by pjc50 »

dvt wrote: post #290
Jerrrry wrote: post #226

Earlier quoted context omitted.

"have fun staying poor," he said, clicking on the coin roulette, eyes never leaving his plugged in android tablet, physically hot to the touch from the max CPU load. "i am going to retire in 5 years. have you heard of prove-your-steaks? its gonna change crypto. you can get 20% back, just lock up your starving kids Earned Income Tax Credit for a year, and you'll make $500!" "have you heard of this new shitcoin? probab…

"Hey I just invested $2000 in options a few days ago, what's a margin call?" "Turns out my pension fund was investing in BBB- CDOs, now they've gone BBBust" The argument that you can't (or don't) get burned in non-crypto markets is made in bad faith.

.. and indeed the UK and other countries have banned the OTC sale of particularly bad ones, such as binary options. There is some effort to prevent people selling overly fraudulent or risky products to the general public, even if it's leaky.

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

#300

Post by spinny »

NationalPark wrote: post #289
spinny wrote: post #282

Earlier quoted context omitted.

have you tried google?

Seems super unlikely that somebody with a HN account is unfamiliar with search engines, doesn't it?

Seems super unlikely that somebody with a HN account can't find docs for defi projects that in most cases have github accounts with available contracts and api docs, doesn't it?

Maybe it's just deceptive

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