Where are the regulators and enforcers when we actually need them? How is any high up in this institution not arrested yet? What the hell are they doing? Like is this a psyop to destroy crypto? Is this preferential treatment of SBF due to his donations/regulatory capture? Imagine if there was a mass shooter in a crowd of people and they just let him continue firing until he ran out of ammo, that's analogous to what's…
FTX faces potential hack, sees mysterious outflows totaling more than $600M
261–270 of 890 posts
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#262Regardless 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.
Crypto works for what use case exactly? Crypto payments take much longer time than traditional credit card ones , are barely supported by most websites and in many cases cost more in transaction fees than credit cards.
And with a lot of people storing their money in these major crypto banks , what we now have is a fairly centralised structure which kind of defeats the purpose of crypto. Worse, these banks also hold each other’s tokens similar to what your normal banks do. And if that’s not enough some of them even do fractional reserves and use the real money they get for investing.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#263Earlier quoted context omitted.
It’s unfortunate that what started out with altruistic motives, a method for decentralized anonymous asset exchange, is being derailed by opportunists. There was a time where a 51% attack was the biggest concern. All that said, I’m not surprised at where we are today.
Most of the rules of civilization are centered around preventing the 20% predators from devouring the 80% normal people.
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Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#264Earlier 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.
People keep saying this, but I don't follow. FTT was a token manufactured out of thin air. Crypto works as a concept, I suppose, but people saying crypto works is like the people that say Agile works. How long do we have to wait to see crypto working? Where are the success stories of crypto? There's a long laundry list of hacks, scams, company failures, "tokenomics", NFTs, on blockchain, etc. Saying crypto works as a…
Lumping diagonally opposed things (centralized coins like FTT or decentralized coins like BTC) under the same category (crypto) is quite misleading.
> How long do we have to wait to see crypto working?
BTC (on chain) is still working as intended, after all these years.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#265Earlier quoted context omitted.
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.
There have been plenty of examples of Smart Contracts doing unexpected things because all of the myriad of edge cases were not anticipated for.
It's one of the reasons the classic financial system works so well because it has the flexibility of manual fail-safes in cases where mistakes have been made. Smart Contracts will never really work unless it has the same.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#266To all the people replying that crypto isn't regulated: that's a myth. Exchanges are regulated and keep KYC info of their customers. If the FTX hack is true, then all that KYC info will be sold in the black market. Regulation didn't prevent the hack (or rug-pull?). Self-custody with DeFi does prevent it. It's shocking how some people are for tinkering hardware/software and self-hosting services like Nextcloud, but it…
> keep KYC info of their customers
This is AML. It has nothing to do with protecting client funds.
Though knowing FTX, they might have advertised compliance with "Employees must wash hands" as "We are a fully reglulated exchange complying with all applicable local and national laws"
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#267Earlier 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.
All crypto currencies are a ponzi scheme. Change my mind.
In a ponzi scheme, there is a fictitious business model that's purported to be turning a profit, and its lack of profit is hidden by secretly using new inflows to pay off old investors.
In crypto, none of that is hidden. It's widely known that dollars cashed out by earlier investors come from the coffers of later investors. Since e.g. Bitcoin doesn't deceive people about being a profitable company, it's by definition not a ponzi scheme. It's important to use this terminology correctly.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#268Crypto is a ponzy scheme and always has been. The FTX disaster is just another sign of this.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#269Earlier quoted context omitted.
This isn't crypto. This is a centralized exchange with a centralized website, with centralized databases, that is run and controlled by humans. In fact, if you use a centralized exchange there is no use of blockchain for the most part. There's a literal saying, "Not your keys, not your coins". Only if people would listen.
You're right that a lot of the risks are due to holding in a central website. But cryptocurrency in a central website is more risky than fiat in a central website, because if a central website gets hacked and the hackers steal fiat, generally those transactions will be reversed, whereas if the hackers steal cryptocurrency, generally those can't be reversed.
What do you mean by stealing fiat currency from a central website? How would a website custody fiat?
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#270Regardless 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 is a Wall Street corruption story.
https://twitter.com/wallstreetpro/status/1591167190996504576
Sam, Caroline, and everyone at the top of FTX and Alameda have very close family ties to key power brokers on Wall Street, which is how they were able to run this scam. FTX has also lobbied extensively for harsh regulations on DeFi, which is a key reason that he was hated by people in the cryptocurrency space, and adored by Wall Street.
The only reason FTX got caught is because of evidence they left on-chain. Any other investment fund might have been able to sweep it all under the rug, but since the massive payout from FTX to Alameda was visible for the world to see, the corruption was obvious, and the whole thing collapsed.