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

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

#671

Post by boppo1 »

hiq wrote: post #445
capkutay wrote: post #302

Earlier quoted context omitted.

FTX is a centralized (not DeFi) exchange that used their own coin as collateral and obfuscated their liquidity. This wouldn’t be possible in open decentralized exchanges that many in web3/crypto were advocating for. However SBF made it his mission to lobby regulation on DeFi and a blind eye to CeFi exchanges like his own. https://www.politico.com/newsletters/morning-money/2022/10/2...

You just get a different set of tradeoff on a decentralized exchange. E.g. many users don't have the basic opsec required to protect their private key without losing it. For a cryptocurrency owner taken at random, I think it's likelier that they make a mistake with their private key than they lose tokens held in a Coinbase (or another CEX among the less dodgy, regulated, etc.) account.

>basic opsec required to protect their private key without losing it.

Exactly. I've long wondered if there's any way to overcome this without essentially going back to a 'trusted broker/custodian' model

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

#672

Post by boppo1 »

vkou wrote: post #385
capkutay wrote: post #302

Earlier quoted context omitted.

FTX is a centralized (not DeFi) exchange that used their own coin as collateral and obfuscated their liquidity. This wouldn’t be possible in open decentralized exchanges that many in web3/crypto were advocating for. However SBF made it his mission to lobby regulation on DeFi and a blind eye to CeFi exchanges like his own. https://www.politico.com/newsletters/morning-money/2022/10/2...

> many in web3/crypto were advocating for. If many people in this space are advocating for decentralized exchanges, how come everyone uses centralized ones? If there's ever a time and place for voting with your wallet, this seems to be it, and the wallets are speaking loudly and clearly.

DeFi doesn't interface with fiat.

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

#673

Post by lamontcg »

JamesianP wrote: post #399
lamontcg wrote: post #342

Earlier quoted context omitted.

"It can't be a Ponzi because they're honest about it being a scam right up front"

well you have to draw a line somewhere. Call it something else if you want to criticize it. Like a bunch of fools racing towards a cliff. But if they're honest about something being a scam how can it be a scam? Seems like a paradox.

Literally only a paradox in places like Hacker News by people who are motivated to question calling crypto a Ponzi.

I've got bad news. It is still a Ponzi if people are "honest" about it being a Ponzi, it is still a Ponzi if it started out as an investment idea and it went Ponzi as losses added up. Arguing that clear Ponzis aren't really Ponzis due to some kind of semantic rules is a gigantic display of "copium".

The only real difference is the distributed and decentralized nature of the scams. And the CEO of JPMorgan has described crypto coins exactly as a "distributed Ponzi scheme" before Congress.

If you wind up paying out redemptions with new deposits as fast as you can, right before you fail hard, then it was a Ponzi all along. That's it. That's the definition.

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

#675

Post by fosk »

lottin wrote: post #400
SighMagi wrote: post #75

Earlier quoted context omitted.

That was my first thought. Not FTX related, but I just got another email from Coinbase reassuring me that they’re not gonna use customer funds without permission. I have in the past moved my shit out of Coinbase wallets because of doubts about that. Honestly though I just want to GTFO of crypto at this point…

Get out, man. Learn investment theory. All you need is a couple of index funds and bonds. Investing isn't supposed to be exciting or make you rich quick.

And even there you can get access to options trading for quicker - and riskier - ways to make money using the traditional stock market. At least if you lose the money is not because somebody in the Bahamas decided it was time to retire earlier with your assets.

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

#676

Post by kweingar »

ryanSrich wrote: post #586
crazygringo wrote: post #568

Earlier quoted context omitted.

> No one expects a multi-billion dollar exchange to vaporize over night. Except for everyone who has? We don't expect banks to vaporize because they're FDIC-insured with extreme regulations on their lending/investing, highly regulated. But crypto exchanges are the wild west. Totally vulnerable to both hacking and ponzi scheme fraud. Essentially zero regulation or customer insurance. And "vaporizing over night" is how…

I should have said most people, not no one. The reality is most people outside of the HN bubble trust billion dollar companies. Crypto or otherwise. And when I say trust, I don’t mean in the sense that they think the company is doing any moral good, but that they expect a product or service in return for payment. You don’t question that the gas you purchase at a gas station is in fact gas, and not water. Why would a…

> The reality is most people outside of the HN bubble trust billion dollar companies. Crypto or otherwise.

I’m not sure about this. Most people I know outside of tech and finance do not trust crypto at all. They inherently mistrust the concept.

“How is it worth anything at all?” is a common question. “It’s just little things on a computer. It’s not real money.” These people would not trust a company that takes your real dollars and gives you bitcoin.

I would be willing to guess that a large portion of the country shares this attitude, especially older people and less technical people.

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

#677

Post by boppo1 »

lelanthran wrote: post #446
lelanthran wrote: post #139

Earlier quoted context omitted.

I Dunn if it is fair to include Scientology in that. Other than the amounts of money involved, it clearly is a religion.

I don't understand the modding down. Does someone want to explain why Scientology is different than, say, the major Christian religions? Or Islam?

At least Islam and Christianity funded art, architecture and to some extent science and literacy.

Disclosure: I'm agnostic asymptotically approaching atheist

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

#678

Post by danans »

socialismisok wrote: post #513

From what I understand, SBF described the product as a Ponzi scheme in so many words 6 months ago, yet somehow attracted more money than Enron. Now he's fled to Argentina, and people are are missing billions. Apparently he even had a custom client built that wouldn't trigger auditing. It never ceases to amaze that this story happens again and again.

> Now he's fled to Argentina

What is it about inflationary and socialist Argentina that would attract a cryptocurrency capitalist con artist? Do they have no extradition treaty?

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

#679

Post by jmathai »

DavidSJ wrote: post #6
zeven7 wrote: post #4

> Investigating abnormalities with wallet movements related to consolidation of ftx balances across exchanges - unclear facts as other movements not clear. Will share more info as soon as we have it. From FTX's general counsel[1], retweeted by FTX_Official. So that indicates it's not being sold off legitimately under some sort of liquidation proceedings. It could be insiders or it could be hackers. [1] https://twitte…

> Reports on crypto Twitter are that this is a hack Is that based on some evidence, or is it speculation?

Greed drives all of us to do things we normally wouldn’t. Given the nature of crypto, unless there’s a good reason to have the FTX app (say as opposed to using their website), then uninstalling it seems like very sound advice.

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

#680

Post by [deleted] »

arithmetiqa wrote: post #651

Honest question. How is it that the traditional banks stay comparatively secure from hacks and the crypto scene is an endlessly reporting the next big breach? Maybe the crypto exchanges should hire some bank security experts or at least adopt their best practices

[deleted]
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