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Blockfi agrees to pay $100M in penalties and pursue registration

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Re: Blockfi agrees to pay $100M in penalties and pursue registration

#211

Post by smt88 »

astrange wrote: post #208
smt88 wrote: post #27

Earlier quoted context omitted.

Regulations are the good parts of regular finance. There are no financial regulations that currently harm me, a consumer. We honestly need to return to a time when we had a bit more financial regulation.

> There are no financial regulations that currently harm me, a consumer. All consumer banks have identical products, preventing you from starting things like a tontine/friends cash pool without a business behind it. KYC means you have to send in recordings of your face. Accredited investor rules often mean only rich people can get richer. There's definitely some harmful ones.

> preventing you from starting things like a tontine/friends cash pool without a business behind it

This is untrue in the US. Nothing is stopping you from contracting a tontine among friends. You just can't sell it to strangers.

> KYC means you have to send in recordings of your face.

This is untrue in the US too. Where do you have to do this?

> Accredited investor rules often mean only rich people can get richer.

I don't buy this. Most things that require accreditation are extremely risky.

The best asset classes (passive index funds) are available to everyone.

People of moderate net worth should avoid assets like venture equity like the plague.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#212

Post by masonium »

notahacker wrote: post #176
yellow_postit wrote: post #139

Earlier quoted context omitted.

Loans have max 50% LTV and their loan rates are at least 4.5%. They must be reinvesting elsewhere similar to other bank models just a lot riskier, more opaque, and less regulation (for now). They’ve meaningfully cut interest rates over time as well often in response to market volatility.

Not sure borrow at 9% to lend at 4.5% is that similar to bank business models...

Their actual rates on most cryptos are much lower than 9%.

https://blockfi.com/rates/

BTC is 0.1% above 0.35 BTC. ETH is 0.25% above 5 ETH. I think we can agree these are not high rates.

On the flip side, the rates for stablecoins (GUSD, USDC, USDT) are quite high still, at 7.75%. But it's not impossible to imagine institutions borrowing stablecoins at higher rates than that.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#213

Post by [deleted] »

Animats wrote: post #91
thebean11 wrote: post #87

Earlier quoted context omitted.

Is BlockFi a scam though? Fraud is not what they are getting fined for, and it sounds like they can continue to operate if they meet these reporting requirements, and that the company intends to do that.

They misrepresented how their assets were collateralized, creating a false impression of safety. That's fraud.

[deleted]

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#214

Post by floodyberry- »

BLKNSLVR wrote: post #175
floodyberry- wrote: post #144

Earlier quoted context omitted.

"finance is corrupt" doesn't work in favor of crypto because insofar as crypto addresses the issue, it only allows finance to be even _more_ corrupt

I genuinely think cryptocurrency makes transparent what 'finance' (and the powers attached to it) would prefer remain opaque.

The only thing that will be transparent with zero knowledge blockchains are the buggy contracts

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#215

Post by celticninja »

discodave wrote: post #136
celticninja wrote: post #45

Earlier quoted context omitted.

Company spins news to make itself look good. Nothing new here, definitely nothing unique to cryptocurrency companies.

Do you have any examples of non-crypto companies trying to spin a $100MM fine as "pioneering efforts in securing regulatory clarity"? I know companies spin, but this is next level.

"By adopting the reforms embodied in the settlement, Merrill Lynch is setting a new standard for the rest of the industry to follow," Spitzer said.

This was in relation to a $100m fine for Merrill Lynch.

https://products.kitsapsun.com/archive/2002/05-22/0054_merri...

This took a whole minute to Google, comment and attribute/source. So it's pretty disingenuous of you to act like this is cryptocurrency specific behaviour when in fact it is standard behaviour for all companies who are fines. I'm not saying it is right but it is hardly a novel approach to dealing with an SEC fine.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#217

Post by gtyras2mrs »

SilasX wrote: post #98
Cederfjard wrote: post #60

Earlier quoted context omitted.

I think it was pretty easy to follow the reasoning. Cryptocurrency companies seem too often play fast and loose with laws and regulations, and the SEC can and will fine them. In addition, whistleblowers can get handsomely rewarded. Ergo, it might soon start to look more and more attractive for a lot of employees to tell on their employers. Even if this particular case didn't go down like that, I still think it's an i…

I got that reasoning just fine, and had no trouble following it. I was objecting to the flimsy pretense of bringing it up on a case that obviously doesn’t need whistleblowers since it was all done out in the open and advertised , and everyone agrees on all facts-on-the-ground but only ever differed on legal interpretation. > Even if this particular case didn't go down like that, I still think it's an interesting poin…

> There are lots of things I’m sure you and I might find interesting. But HN doesn’t benefit from the practice of “ooh, let me use this topic as a pretense to post something I wanted to share regardless, and without reading the article”.

I disagree. The comment is related to the discussion (about SEC action) and the comment was pretty interesting and added value to the comment section

On the other hand, posting shallow dismissals and implying that they haven't read the article is not adding value to the comment section.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#218

Post by bluecalm »

ryanSrich wrote: post #163
bluecalm wrote: post #153

Earlier quoted context omitted.

Even the most blatant scams, literal pyramids called MLMs often have some useful product to muddy the waters. I mean you can after all but that toothpaste and shampoo from Amway and use it!

Yes. The PC parts on bought on Newegg.com with Bitcoin sure are contributing to a crypto scam. How could I have not seen this?

They do because you give legitimacy to the scheme most people will lose money in once it collapses.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#219

Post by abritrum »

chollida1 wrote: post #71
abritrum wrote: post #53

I (along with other) have been filing whistleblower reports on blatant price manipulation on an OTC stock for the entirety of last year (about 30 reports of naked short selling, wash trading). Not one peep from the SEC. It's been eye-opening to see the amount of fraud in the financial markets that goes unchecked. Sometimes I question my sanity that I persist in this stock and whether what I see is illegal. Good to se…

I"ll bite on this. I work in the financial markets and have alot of experience in market structure. What evidence do you have of wash trading? How would you tell if something is a wash trade? How would you determine if someone is naked shorting? What evidence would you provide for something like this?

You have every reason to be skeptical of my claims. I will not share the ticker since that would mean I am trying to get publicity. Another poster said that you don't know for sure whether it is naked shorting or wash trading. He is correct and I don't have mathematical proof. But there are enough signs: 1) Company had debenture that was paid off early to toxic lender 2) Toxic lender has been caught and fined by the SEC in the past 3) There is always someone selling below the last market price in this thinly traded stock. 4) Every day the stock is walked down by short ladder attacks. 5) If we model the problem like this, lets say > 50% was short volume, then they could not have covered the same day. Accumulate this over a year. There are over 2M uncovered short sales. 6) Every day like clockwork at close the stock is marked down. We surmise it is because of margin (calculations like 5 are just modeling, we think he is short 10s of millions of shares). 7) Company got a call leaked by the toxic lender trying to raise money. Call was leaked. 8) Wash sales are trickier to prove: but we notice odd lot orders trading without appearing on L2. I have many screenshots that show this.

Notice I am not 100% sure myself. I am a computer scientist who got caught in this and question my sanity sometimes (as someone else posted a while back, there are many groups who obsess and conspire over this).

So any advice, help or insight might be useful.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#220

Post by abritrum »

PragmaticPulp wrote: post #66
abritrum wrote: post #53

I (along with other) have been filing whistleblower reports on blatant price manipulation on an OTC stock for the entirety of last year (about 30 reports of naked short selling, wash trading). Not one peep from the SEC. It's been eye-opening to see the amount of fraud in the financial markets that goes unchecked. Sometimes I question my sanity that I persist in this stock and whether what I see is illegal. Good to se…

> on blatant price manipulation on an OTC stock Which stock? There are a lot of cult-ish communities around certain stocks that "know just enough to be dangerous" and end up misinterpreting a lot of signals as naked shorting and such. The narratives sound good to people who are holding the stock, but they're almost always completely flawed. If the complaints are basically coming in bulk with the same reports that can…

I agree that there are conspiracy minded folks who get stuck in the rut here. I am worried of course that I somehow stumbled on one. Please see my response to chollida1 which has some more color.
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