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

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

#271

Post by colinmhayes »

pornel wrote: post #266
colinmhayes wrote: post #219

Earlier quoted context omitted.

Except crypto is decentralized, and you can use mixers, which are not owned by anyone, to anonymously move coins from a blacklisted wallet. There is no mechanism in decentralized crypto to freeze an address, and I don't think the crypto community would adopt such a blockchain.

Blacklisting doesn't have to be a feature of a blockchain. It's enough if most countries decide to make it illegal for anyone to spend coins received from a blacklisted address. It's not easy to enforce of course, but people would be afraid they get in trouble if they're ever deanonimized, and businesses could be required to report their trades, just like taxes. This will force creation and use of wallet reputation c…

Everyone already knows mixers are holding illicit coins. It doesn't matter because mixers don't actually "want" anything. They're just code in the ether. You send your coins to an address along with a receiver address and the smart contract sends coins to the other address. How do courts stop that without shutting down exactly what makes blockchains valuable?

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

#272

Post by fron »

Red_Leaves_Flyy wrote: post #200
pohl wrote: post #197

Earlier quoted context omitted.

Haven't people who are attracted to crypto, for the most part, already decided that oversight is bad because something something decentralization?

It’s the Libertarian fantasy. Crypto bros, many VCs, angels, and other mini napoleons think they can solve the world’s problems without addressing any of their personal problems, studying history, taking responsibility for their actions, engaging in community building, or hiring people with spines. Which is why crypto and ilk keep reinventing every scam and repeating the mistakes of the past that directly led to regu…

"Libertarians are like house cats: absolutely convinced of their fierce independence while utterly dependent on a system they don't appreciate or understand."

No idea who said this originally but it continues to be true. Abandon the system, and they find it was there for a reason.

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

#274

Post by s1artibartfast »

jdmichal wrote: post #268
s1artibartfast wrote: post #234

Earlier quoted context omitted.

Imagine in your example the vending machine has a variable pricing and lowers its price if nobody purchases soda. Is it theft to wait longer than the designers thought people would wait and purchase the DRNK at price lower than the machine owner thought they would. I think a better example is a claw gambling machine. You pay Fiat for a chance to grab fiat out of a pool. If you come up with a strategy whereby you can…

Broken slot machines do happen, and it's been made very clear that the player does not benefit. https://www.aol.com/2016-11-02-broken-slot-machine-dupes-wom... https://www.foxnews.com/us/not-a-winner-oregon-woman-denied-... However, this works both ways. If the mistake is in the favor of the player, they are obligated to pay out: https://www.msn.com/en-us/news/us/a-slot-machine-in-las-vega...

I would argue that the fund wasn't broken-it was working exactly as designed. It was just a bad design

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

#275

Post by faeriechangling »

xur17 wrote: post #196
faeriechangling wrote: post #24

Earlier quoted context omitted.

If the law is held to have supremacy over “smart contracts” and implicit intent is held to be more important than explicit terms, than this undermines not just a major argument for smart contracts but a major argument as to why crypto as a whole is valuable. Enforcing a contract through a written contract & traditional finance vs a smart contract becomes a mere implementation detail since in either case somebody can…

> If the law is held to have supremacy over “smart contracts” and implicit intent is held to be more important than explicit terms, than this undermines not just a major argument for smart contracts but a major argument as to why crypto as a whole is valuable. No, it really doesn't. There are 2 questions that you are conflating here: 1. Can the courts force a user to return funds made via a valid smart contract trans…

>2. Can the courts force a blockchain to reverse a transaction that was made.

The courts already can't necessarily force a transaction to be reversed as it is. The money can be gone long before they get involved.

>To me there is a large difference between a system (like credit card settlement) that can have transactions revoked easily after settlement, and one that can only be revoked by another separate transaction that the sender makes.

There's a good deal of irreversible transactions, such as inter-bank transfers in traditional finance. It's also my understanding that most "Reversals" are just new transactions or cancellations of pending transactions. I don't see a HUGE difference in how an inter-bank wire transfer works and how sending somebody crypto works except that in the case of crypto it's the wallet/account holder in full control.

I'll acknowledge there are differences, which impacts the probability of reversal and who can do the reversal, but I still feel it borders on the edge of "implementation detail". It only feels like a truly profound difference if you want to make a transaction a bank would normally interfere with, like a ransom payment, payment for fraudulent goods/services, drug deal, money laundering, funds being sent to political dissidents, or similar. Whereas the idea of smart contracts bypassing the expense of the courts entirely seemed like a much more broadly useful notion.

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

#276

Post by aidenn0 »

motohagiography wrote: post #60

This isn't a hack, it was straight arbitrage. I distinguish them because there was at no time a transfer of administrative power or control over the contract or targets infrastructure to Medjedovic. In a smart contract, I'd make a legal distinction between syntactic parsing and calculation, which has to do with the purity of functions and data. An arbitrage would be fair game if it levered an unanticipated calculatio…

> If he has the money, fleeing before charges were laid was probably even rational, as there is no reason to expect the legal system is equipped to deliver justice in something so new.

TFA claims he was originally offered to keep 10% (over a million dollars) from this hack, free and clear. Not agreeing to that deal meant willingly putting himself at the mercy of said legal system. Talking about a single decision as rational in isolation is disingenuous.

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

#277

Post by nicoburns »

glerk wrote: post #232
stickfigure wrote: post #223

Earlier quoted context omitted.

I'll try to steelman the code-is-law argument (not really sure how I feel about it myself): In the case of the smart contract, you don't own the vending machine. It doesn't have an owner, it just "is". If it did have an owner, that person is probably violating all sorts of securities laws in countless jurisdictions. That's at least part of the point of all this smart contract stuff. To make the analogy a little more…

> If did have an owner, that person is probably violating all sorts of securities laws in countless jurisdictions. That's probably what upsets me most about this story. These developers want to have it both ways: it is decentralized finance and nobody owns the contract as long as we are making money, but we want all the laws and regulations of traditional finance to protect us if things don't go our way. I am saying…

Frankly, I don't think it's up to you to pick a lane. It's the wild-west at the moment because the technology is new. But it won't be long before the law catches up and crypto will be subject to it the same as everything else.

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

#278

Post by why_only_15 »

rootusrootus wrote: post #264
xur17 wrote: post #203

Earlier quoted context omitted.

Because people want to and decided the risk was worth it to them? If a consenting adult wants to deposit their money into a system that they have full visibility into, why should we stop them? > This is how crypto operates. Buyer beware. This statement rings very true for me, and perhaps is the bit we agree on. With crypto there is no "oversight" that blocks you from depositing your funds into unsafe contracts, etc.…

> If a consenting adult wants to deposit their money into a system that they have full visibility into, why should we stop them? We already do exactly that, e.g. Accredited Investor.

Yes but should we do it? Those rules prevent most people from e.g. investing into startups.

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

#279

Post by t_mann »

woojoo666 wrote: post #131
glerk wrote: post #122

Earlier quoted context omitted.

They really don't have any leg to stand on. A smart contract is a piece of code running on a public permissionless blockchain. The developers who deployed that code do not own it. Medjedovic had as much the right to take money out of the smart contract using the contract's logic as Kellar and Day. Being blockchain developers, Kellar and Day know these facts very well, but they persist in their hypocrisy because it is…

By that token, wouldn't rugpulls be legal too?

Rugpulls, as in projects attracting funds and then absconding with them, are different from exploits in that they involve outright lies / deception. There's a (moral, at least) difference between bad intent and honest incompetence. The attacker didn't ask anyone to contribute the funds that he appropriated.

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

#280

Post by bolasanibk »

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…

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