Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The math prodigy whose hack upended DeFi won’t return funds

bloomberg.com

Post reply on HN
Print view View original

171–180 of 409 posts

Re: The math prodigy whose hack upended DeFi won’t return funds

#171

Post by bawolff »

toomuchtodo wrote: post #103
SkyMarshal wrote: post #91

Earlier quoted context omitted.

> With this worldview, if the attacker simply exploited poorly-written code to find a loophole, how do the owners of Index have a leg to stand on? They don’t. They simply have to accept it as a bug bounty successfully collected and paid out, and treat it as a learning experience and evolutionary process. Do better next time, if there is a next time.

Good luck making that argument in court. Intent is key, and if this is not the intent of the "smart" (lol) contract, "finder's keeper's" is not a legal defense. The legal system doesn't care about your blockchain arguments.

I mean, all these smart contract people basically advertise this scenario as a feature not a bug.

Ianal and don't know how a court would see it, but the way smart contracts are advertised would probably give you a fighting chance to make this argument where in normal finance you would have no chance.

Re: The math prodigy whose hack upended DeFi won’t return funds

#172

Post by sjtindell »

colinmhayes wrote: post #167
silverlake wrote: post #153

Earlier quoted context omitted.

Citibank mistakenly sent $900M to a bunch of hedge funds. Many refused to return it. Citi lost the court case. https://www.cnn.com/2021/02/16/business/citibank-revlon-laws...

They accidentally repaid their loan early, which was explicitly allowed in the contract. The hedge funds were under no obligation to pay them back, since the money was now rightfully theirs.

And everything done in this case was in a smart contract. That’s the idea.

Re: The math prodigy whose hack upended DeFi won’t return funds

#173

Post by godelski »

SamBam wrote: post #50

> But in our email exchanges, he argued that he'd executed a perfectly legal series of trades. In real finance, there is an understanding that technical loopholes can exist, since not every outcome can be foreseen when writing laws, but the legal system can frequently prosecute against a series of actions which are, individually, legal, but which together are taken in order to achieve something illegal. That is, mode…

This is a thing that confused me about smart contracts. I don't see how they can exist without a judicial system. They do seem to have some uses under that framework. Like the system is auditable so you can prove if someone cheated and changed a contract out from under you (and you lost your copy), but that's only a minor improvement on the current system. The US has a lot of legal policy that is based on spirit of the law because it is well recognized that humans are imperfect and never will be. It then seems silly that people who are fully aware of failure analysis/engineering would design a system where the mode of failure is easily exploitable.

Re: The math prodigy whose hack upended DeFi won’t return funds

#174

Post by fao_ »

sushid wrote: post #154
SamBam wrote: post #77

Earlier quoted context omitted.

But that is the premise of smart contracts. Sure, it doesn't excuse you from the law if your contract is to pay someone to shoot someone, but it's supposed to be the final word on the actual financial transactions that happen within the contract. Plenty of crypto hypers say the same. E.g. from a quick search of "Smart Contract advantages," the very first article, by a law firm: > Guaranteed Outcomes: Potentially the…

Smart contracts allow for guaranteed outcomes. Some commentary added by a random law firm does not mean that guaranteed outcomes == no need for litigation and courts. Just think of non-smart contract parallels. If a bank had an ATM, the premise is that this ATM will execute a series of commands and allow you to withdraw/deposit/transfer funds. If a nefarious back actor found a series of user input that allowed them t…

> Some commentary added by a random law firm does not mean that guaranteed outcomes == no need for litigation and courts.

But it would appear that you expect us to believe that some commentary added by a random hacker news poster means the opposite?

Re: The math prodigy whose hack upended DeFi won’t return funds

#175

Post by not2b »

colinmhayes wrote: post #167
silverlake wrote: post #153

Earlier quoted context omitted.

Citibank mistakenly sent $900M to a bunch of hedge funds. Many refused to return it. Citi lost the court case. https://www.cnn.com/2021/02/16/business/citibank-revlon-laws...

They accidentally repaid their loan early, which was explicitly allowed in the contract. The hedge funds were under no obligation to pay them back, since the money was now rightfully theirs.

Yes, exactly. They sent the money to their creditors. Had they accidentally sent it to someone who they didn't owe money to, the courts would order the money to be returned.

Re: The math prodigy whose hack upended DeFi won’t return funds

#176

Post by albertgoeswoof »

bombcar wrote: post #80
criddell wrote: post #26

Earlier quoted context omitted.

There are lots of stories lately about stolen NFTs. The podcast ReplyAll did an episode where they tracked down the current owner of a stolen NFT. He had sympathy for the original owner but he had no intention of turning it over. I don’t get why purchasing a stolen NFT is different than purchasing a stolen guitar from a pawn shop. Shouldn’t the previous owner be able to use the courts to demand the return of the item…

The whole point of an NFT is that the ownership is on the blockchain and guaranteed by said blockchain - if the courts can "force" return of the NFT than the NFT isn't actually synonymous with the ownership, and so then is kinda pointless.

But the NFT was actually stolen, she was phished for her seed phrase, and the criminal moved ownership of the nft to their wallet, and then sold that to the person who was interviewed on the podcast.

It’s no different to a thief stealing your bike then selling it to someone else on a street corner. Just because that person is the current owner and thinks they legitimately purchased it doesn’t make it rightfully theirs. In fact it’s even worse because it’s trivial to identify who the rightful owner is in this case, and if you buy an NFT you can look back at exactly who has owned it previously.

Now imagine if this was the deeds to your house on the blockchain.

Re: The math prodigy whose hack upended DeFi won’t return funds

#178

Post by colinmhayes »

sjtindell wrote: post #172
colinmhayes wrote: post #167

Earlier quoted context omitted.

They accidentally repaid their loan early, which was explicitly allowed in the contract. The hedge funds were under no obligation to pay them back, since the money was now rightfully theirs.

And everything done in this case was in a smart contract. That’s the idea.

I don't think the smart contract explicitly said "there's this arbitrage opportunity available", but it's definitely a fine line.

Re: The math prodigy whose hack upended DeFi won’t return funds

#179

Post by vfclists »

This sounds like https://www.theguardian.com/business/2020/jan/28/navinder-sa..., Navinder Sarao, the British Indian trader who was blamed for the "flash crash" of 2010.

It looks like if you fall foul of big merchant banks and stock traders you can have the full force of the DOJ land on you, but crypto is not important enough.

Re: The math prodigy whose hack upended DeFi won’t return funds

#180

Post by fnordpiglet »

SamBam wrote: post #50

> But in our email exchanges, he argued that he'd executed a perfectly legal series of trades. In real finance, there is an understanding that technical loopholes can exist, since not every outcome can be foreseen when writing laws, but the legal system can frequently prosecute against a series of actions which are, individually, legal, but which together are taken in order to achieve something illegal. That is, mode…

The courts have found that a written description of the contract is legally binding even if the smart contract has a bug that allows things that were intended to be disallowed. Further the courts held the right to decide whether something was allowed or not allowed on their own judgement regardless of the smart contract, asserting the primacy of the law and jurisprudence over cryptonerd utopian fantasy.
Post reply on HN