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FTX faces potential hack, sees mysterious outflows totaling more than $600M

coindesk.com

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Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M

#191

Post by BLKNSLVR »

YossarianFrPrez wrote: post #116

Regardless of whether you are pro- or anti- crypto, the collapse of FTX, SBF's bubble bursting in a rather extreme fashion, and now this hack are more nails in the coffin for mainstream support. I am no fan of crypto myself, but it's interesting to think what would have to happen for crypto to burnish its image. Would key people have to voluntarily form some sort of coordinating council and self-regulate? Would they…

I actually see this as an opportunity for the established financial companies to insert themselves into the ecosystem, using their established reputation, processes, and adherence to traditional bank regulation as a 'trust' base that's been both lacking permanently and (whatever was there) eroded over the last 12 months.

Both exchanges and coins / tokens are going at what looks like very cheap right now.

Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M

#192

Post by croes »

douglaswlance wrote: post #133
YossarianFrPrez wrote: post #116

Regardless of whether you are pro- or anti- crypto, the collapse of FTX, SBF's bubble bursting in a rather extreme fashion, and now this hack are more nails in the coffin for mainstream support. I am no fan of crypto myself, but it's interesting to think what would have to happen for crypto to burnish its image. Would key people have to voluntarily form some sort of coordinating council and self-regulate? Would they…

This isn't a crypto failure. Crypto works. This is a human failure. FTX didn't collapse because of the technology. It collapsed because of human error. The fix is rather simple. If an organization looks like a bank and quacks like a bank; it should be regulated like a bank.

So bank regulation worked in 2008, is was just a human failure?

Communism works, it's just human failures?

The measure of whether something works is whether it prevents human failure.

Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M

#193

Post by JumpCrisscross »

nightski wrote: post #186
bellBivDinesh wrote: post #169

Earlier quoted context omitted.

The problem is the crypto community’s skepticism of proven financial safeguards. Large financial systems are centralized for a reason and they seem intent on finding out why by hitting every bump in the road at full speed.

What's amusing about your comment is that exchanges are the one centralized part of crypto due to the interfce with fiat and they also tend to be where all of the fraud occurs.

> exchanges are the one centralized part of crypto

Crypto is immensely more centralised than the American banking system. That’s what makes it resilient. Every wallet’s state is always globally known. Compare that with the series of subpoenas one must serve to learn what’s in whose bank account.

Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M

#194

Post by YossarianFrPrez »

YossarianFrPrez wrote: post #116

Regardless of whether you are pro- or anti- crypto, the collapse of FTX, SBF's bubble bursting in a rather extreme fashion, and now this hack are more nails in the coffin for mainstream support. I am no fan of crypto myself, but it's interesting to think what would have to happen for crypto to burnish its image. Would key people have to voluntarily form some sort of coordinating council and self-regulate? Would they…

I'd be curious to read anyone's thoughts on what would have to happen for crypto to improve its image at this point. Would being regulated exactly like traditional banking / finance be enough? More regulation? Would it be regulation + lower rates of fraud, hacks, collapse, and abuse? Or something else I'm not thinking of?

Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M

#195

Post by seydor »

groffee wrote: post #34
mudrockbestgirl wrote: post #9

Earlier quoted context omitted.

> Reports on crypto Twitter are that this is a hack It's really unfortunate to get "hacked" with such bad timing. You steal customer money and file for bankruptcy but now the bad hackers, probably from the Bahamas as well, take whatever is left and cash out. Oh no! /s But it's alright, SBF said he's sorry.

SBF takes "full responsibility".

i volonteer to take some "responsibility" as well

Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M

#196

Post by threeseed »

nightski wrote: post #186
bellBivDinesh wrote: post #169

Earlier quoted context omitted.

The problem is the crypto community’s skepticism of proven financial safeguards. Large financial systems are centralized for a reason and they seem intent on finding out why by hitting every bump in the road at full speed.

What's amusing about your comment is that exchanges are the one centralized part of crypto due to the interfce with fiat and they also tend to be where all of the fraud occurs.

> where all of the fraud occurs

Might want to look into the rug-pulling with shitcoins, NFTs etc.

That is far more insidious since it is targeted at young adults/children by influencers such as Jake Paul, Lil Uzi, David Dobrik etc.

Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M

#198

Post by paxys »

YossarianFrPrez wrote: post #183
paxys wrote: post #154

Earlier quoted context omitted.

In the short term – yes. More broadly though, large-scale frauds like this one will only result in increasing government scrutiny and regulation, which can actually be good for the crypto investment ecosystem.

Hmm, tbh, that's a point I hadn't fully considered. To flip your point around, what hypothetical scenario would be bad for the crypto ecosystem long term?

- Bugs or some fundamental/unfixable exploits in bitcoin algorithms

- Successful or semi-successful 51% attack (maybe state sponsored)

- Global energy crisis/crackdown on mining

- Global economic crisis of the scale where people desperately need cash/commodities and can't waste their money in speculation

Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M

#199

Post by alasdair_ »

smt88 wrote: post #32

There's no way this is a coincidence. This is undoubtedly people who work(ed) at the company and were trusted with private keys trying to get away with some money while they can.

Agreed. It's by far the simplest answer. They already have the keys and have the code.

Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M

#200

Post by jl2718 »

YossarianFrPrez wrote: post #173
douglaswlance wrote: post #133

Earlier quoted context omitted.

This isn't a crypto failure. Crypto works. This is a human failure. FTX didn't collapse because of the technology. It collapsed because of human error. The fix is rather simple. If an organization looks like a bank and quacks like a bank; it should be regulated like a bank.

I agree that the algorithms powering crypto are sophisticated pieces of technology. Just look at the zero-knowledge proofs. The thing is that "not being regulated like a bank" is exactly what many people like / liked about it. (Yield farming, using DeFi for mortgages, etc.) What I'm saying is that Crypto seems to be headed to being taught alongside, if not the Therac-25, then the Mars Climate Orbiter (which was lost…

A CEX is "like a bank" because it's a human that takes custody of assets, not because it does trades and loans. Smart Contracts, however, can't be regulated the same way that human custodians can, but they are also designed not to be able to do unexpected things.
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