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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

#741

Post by selecsosi »

xeromal wrote: post #640
drewmol wrote: post #633

Earlier quoted context omitted.

Yes banks have fidelity bonds called bankers blanket bonds (BBB) which cover losses from fraud, theft, etc. The FDIC doesn’t ensure against robbery, identity theft(banking fraud), etc. so this is an important protection for banks to provide.

Ah! I had no idea FDIC didn't cover robbery. Thanks for clarifying!

They will cover the depositor's funds up to the 250k limit in the event of an event where the bank cannot return your funds, but banks assets or property is not covered under FDIC and need to be separately insured.

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

#742

Post by lupire »

JamesianP wrote: post #728
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…

There isn't zero regulation. An online businesses is subject to the laws of its customers' countries. And the laws may not be up to date enough for some new scams, but they aren't completely naive. For example ponzi schemes are illegal. If they were doing that the govt will go after them (sooner or later...). A quick google search will net you plenty of stories about prosecutions.

I am not subject to laws of a foreign country that isn't willing to hunt me down.

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

#743

Post by X6S1x6Okd1st »

haldujai wrote: post #720
X6S1x6Okd1st wrote: post #541

The hacker has spent the last 11 hours slowky and incrementally converting all the various tokens they got to ETH. They've been using a variety of different defi exchange and have eaten large slippage fees, at least once over 5M lost in slippage. We're not seeing any else, e.g. laundering through another exchange, splitting into different accounts, automating the liquidation of tokens to ETH, off loading ETH into a c…

> The on chain activity makes this look like an individual who did not prepare extensively before doing this or doesn't have the skills to use automation/operational best practices This may be an understatement of their skill level. It seems the individual(s) also used a Kraken account to transfer funds and have been identified per their CSO. https://twitter.com/c7five/status/1591434844760076290?s=61&t...

I believe that is the white hat group. It helps to identify the exact txns & addresses they are referring to here.

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

#744

Post by lupire »

PebblesRox wrote: post #733
ryanSrich wrote: post #586

Earlier quoted context omitted.

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…

> You don’t question that the gas you purchase at a gas station is in fact gas, and not water. Ooh, I have an analogy! If I park my car at the airport while I go on vacation, I expect it to still be there when I get back. I don’t expect to return from my trip and discover that the airport let the car rental company use it while I was away and now it’s gone because someone crashed it. On the other hand, someone in thi…

You are describing Turo.com

The difference to FTX is that FTX hides the crime in a foreign country in a way that a car thief cannot.

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

#745

Post by lupire »

kweingar wrote: post #676
ryanSrich wrote: post #586

Earlier quoted context omitted.

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 r…

Crypto marks mostly "video gamers" and "get rich quick" poor folks. Techies are on the scammer side, building the tools and skimming transactions.

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

#746

Post by lupire »

crazygringo wrote: post #617
ryanSrich wrote: post #586

Earlier quoted context omitted.

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…

But it's not a big deal if you show up to the gas station and they're out of gas. We trust these huge companies, but if your local McDonald's is closed today you're not losing your savings. Entrusting a company with your savings is an entirely different matter. The only reason people trust banks is because of government regulation and insurance. And sensible people are well aware of FDIC insurance, and of how losing…

"Sensible people" gave billions of dollars to Bernie Madoff with no justification.

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

#747

Post by MrMan »

pinkfairy10 wrote: post #591
xwdv wrote: post #583

Earlier quoted context omitted.

Personally I liquidated all remaining crypto. I think these are the end of days for crypto and before the end of this year anyone still holding crypto assets will find them significantly less valued. There is no path to increasing value.

Losing faith just because a CEX goes down means you were never interested in it beyond speculation to begin with it.

crypto is famous only because of speculation, speculators drive all the value

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

#748

Post by hi5eyes »

biztos wrote: post #644
X6S1x6Okd1st wrote: post #541

The hacker has spent the last 11 hours slowky and incrementally converting all the various tokens they got to ETH. They've been using a variety of different defi exchange and have eaten large slippage fees, at least once over 5M lost in slippage. We're not seeing any else, e.g. laundering through another exchange, splitting into different accounts, automating the liquidation of tokens to ETH, off loading ETH into a c…

I'm sure this is a total noob comment but I love how the account is named "FTX Accounts Drainer" on Etherscan: https://etherscan.io/address/0x59abf3837fa962d6853b4cc0a1951... [Edit: and also the Heist label is very useful!]

common for etherscan to label malicious wallets

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

#749

Post by lupire »

nwatson wrote: post #598
cesarb wrote: post #543

Earlier quoted context omitted.

> I mean it should be obvious that anyone who offers 8% interest has to do some high-risk stuff with your funds, right? That wouldn't be obvious at all to me; the lowest-risk investment in my country (federal government bonds) is currently offering over 13% interest ( https://www.tesourodireto.com.br/titulos/precos-e-taxas.htm ).

That's for bond purchase and payback in Brazilian Reais with a bona fide government (with Lula back). To guarantee an 8% payback in crypto is a completely different game, and there's a significant downside for someone taking the deal. The expected return rate is always going to be negative on a proposition like that.

Lula might be a good guy, but that doesn't mean he has immediately restabilized the country.
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