FTX faces potential hack, sees mysterious outflows totaling more than $600M • Hacker News Board

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

#201

Post by can16358p » Sat, Nov 12, 2022, 7:15 AM UTC

YossarianFrPrez wrote: post #194

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?

Transparency. Crypto has almost everything needed to be fully transparent with a public ledger but exchanges (CEXes) still operate behind closed doors.

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

#202

Post by TEP_Kim_Il_Sung » Sat, Nov 12, 2022, 7:15 AM UTC

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…

Not everything that calls itself "crypto" is decentralized, peer to peer, or a crypto-currency.

https://www.corbettreport.com/bitcoinpsyop/

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

#203

Post by jl2718 » Sat, Nov 12, 2022, 7:15 AM UTC

threeseed wrote: post #196

nightski wrote: post #186

Earlier quoted context omitted.

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.

Yes, smart contracts can be programmed to allow terrible human behavior. Banks also have this feature.

But... they can also be programmed NOT to allow terrible human behavior. Banks do not have this feature.

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

#204

Post by YossarianFrPrez » Sat, Nov 12, 2022, 7:16 AM UTC

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.

What's also interesting is that decision-making power is very rarely fully centralized in large financial companies. Boards of directors, fiduciary duties, third-party audits, attorneys, and so on, all structurally serve to decentralize decision making. There is, of course, individual variability, and such structures are not always successful.... E.g. I've read that the board of FTX wasn't an independent board in any meaningful sense.

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

#205

Post by TEP_Kim_Il_Sung » Sat, Nov 12, 2022, 7:16 AM UTC

threeseed wrote: post #162

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.

> it should be regulated like a bank And how would they implement KYC/AML regulations which are fundamental to banking ?

By force, if necessary.

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

#206

Post by mywaifuismeta » Sat, Nov 12, 2022, 7:16 AM UTC

infrawhispers wrote: post #197

FTX General Counsel confirmed unauthorized transactions: https://twitter.com/_ryne_miller/status/1591326796305530880?...

> FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage

What assets?

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

#207

Post by yieldcrv » Sat, Nov 12, 2022, 7:17 AM UTC

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…

Shame poorly run companies and stop using them. Mainstream’s insistence on conflating this with crypto masks the proper shaming of mismanaged companies.

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

#208

Post by ISL » Sat, Nov 12, 2022, 7:17 AM UTC

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…

If there were a clear and well-regulated equivalent of Tether, with obvious and transparent dollar-backing, I suspect it would find a lot of usage.

Might cost $1.15 to mint a new USD-coin redeemable for $1.00, but I suspect there would be an appetite.

Massive volatility and the occasional collapse of a crypto-bank are probably hindering the appetite of many people for anything in the crypto market. That population probably would dwarf any yield-farmers.

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

#209

Post by miguelmota » Sat, Nov 12, 2022, 7:19 AM UTC

foogazi wrote: post #148

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.

> This is a human failure Is there any crypto out there without humans ? Is there an undo button to reverse the transaction? All financial systems involve humans

> Is there any crypto out there without humans ?

What OP is referring to is that you don't need to trust people if the dex is on-chain and verifiable. FTX was a non-transparent and insolvent centralized exchange which wouldn't be possible if it was on-chain because anyone can see the funds that are available and the protocol would not allow leverage backed by non-existing collateral.

> Is there an undo button to reverse the transaction?

No there isn't. This is a double edge sword.

> All financial systems involve humans

To a degree, but centralized exchanges have more knobs controlled by humans while an on-chain dex and just be deployed once and require no human intervention. A dex can be audited fully on-chain and anyone can see if the contract has any master holder keys. The FTX fiasco is because they own all your crypto because they have the master keys. The future of finance is people being in charge of their own money and where no unexpected entity can arbitrarily inflate the supply, which is only possible with crypto.

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

#210

Post by [deleted] » Sat, Nov 12, 2022, 7:19 AM UTC

JumpCrisscross wrote: post #193

nightski wrote: post #186

Earlier quoted context omitted.

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.

[deleted]