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$477M FTX ‘hack’ was a Bahamian government asset seizure

marketwatch.com

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Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#61

Post by zeven7 »

texaslonghorn5 wrote: post #2

interesting, since FTX was headquartered in the bahamas this seems lawful and not unreasonable. though some will argue the government doesn't have the right to do that, I think you sacrifice your protection when you commit fraud. how quickly should the bahamas have announced about the asset seizure? is it common in other countries to not comment about (seizures in) ongoing investigations?

Another interesting angle to this is that the funds were collected in various different currencies, but all of them were converted into ETH. And they weren't converted carefully to make sure they got the full value, no attempt at OTC deals or anything; they were converted in a rush and dumped on the open market. This resulted in pretty clear loss of funds. It seems like a strange way for a government to operate.

That's not all: They also seized the funds with SBF's help after FTX had declared bankruptcy and SBF had stepped down as CEO. General counsel for FTX at the time indicated they were surprised by the fund movement and unaware of what was going on[1]. Shouldn't the Bahamas have been communicating with the people actually in charge of FTX at the time? Aren't those the people who would legally be in control of the funds?

[1] https://twitter.com/_Ryne_Miller/status/1591281729125613570

/tinfoil

Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#62

Post by bigyikes »

theossuary wrote: post #57
nostromo wrote: post #46

Earlier quoted context omitted.

How do you think governments force people to do things they otherwise wouldn’t do?

Using people. Governments have been powerful far longer than guns have existed.

What are the people holding if you resist with enough strength?

Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#63

Post by devmunchies »

theossuary wrote: post #57
nostromo wrote: post #46

Earlier quoted context omitted.

How do you think governments force people to do things they otherwise wouldn’t do?

Using people. Governments have been powerful far longer than guns have existed.

> using people

You mean violence. Physical force. In that context, the means is irrelevant and pedantic.

Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#64

Post by starmole »

tormeh wrote: post #52
ohbtvz wrote: post #38

Earlier quoted context omitted.

Armed government agents show up to your door asking you for half a billion dollars. You tell them "can't do it, I need this other key that's held by my partner in a different place". What do you think is going to happen next? "Understandable, have a good day" and they go home? Or they hold you in jail until you somehow find a way to comply?

And how would you ever comply? The government can hold you hostage, but absent the consent of your collaborators there’s nothing you or the government can do. Which is not a great situation to be in, to be fair.

The government can let you call your collaborators. While they torture you. Of course you picked your partners carefully to be absolute psychopaths that would rather see you suffer and die than give up their keys. That's how you picked them as trustworthy partners in the first place!

Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#65

Post by [deleted] »

thrown_22 wrote: post #39
ceejayoz wrote: post #34

Earlier quoted context omitted.

No, they're suggesting that SBF is in their jurisdiction, which gives them substantial "do what we say, or else" power.

We could call that problem something fancy like the Byzantine General Problem and try and figure out ways to solve it mathematically.

[deleted]

Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#66

Post by perfecthjrjth »

dendriti wrote: post #41
ceejayoz wrote: post #34

Earlier quoted context omitted.

No, they're suggesting that SBF is in their jurisdiction, which gives them substantial "do what we say, or else" power.

OK so not actually guns but "government" then. Not as dramatic though. OP is likely the same kind of person who calls taxes "theft" for rhetorical purposes.

no "government" is possible without mononpoly on violence.

Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#67

Post by mccorrinall »

saagarjha wrote: post #42
gruez wrote: post #22

Earlier quoted context omitted.

>absent exploits or insiders Insiders can be press ganged with threats of violence, which the state has a monopoly on.

You think a state’s monopoly on violence is relevant when they’re beating you to steal cryptocurrency from you? Anyone off the street can do the same.

If someone from the street does this there is a force called police which will help you. When the government does this, there is no one who will help you.

Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#68

Post by CydeWeys »

theossuary wrote: post #57
nostromo wrote: post #46

Earlier quoted context omitted.

How do you think governments force people to do things they otherwise wouldn’t do?

Using people. Governments have been powerful far longer than guns have existed.

What do you think they were using before guns? Hint: it's whatever weapons were commonplace at the time.

Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#69

Post by [deleted] »

throwaway9980 wrote: post #26
woodruffw wrote: post #19

Maybe this is a stupid question, but how ? Was the Bahamas' SEC holding its own copies of FTX's keys? I thought the entire point of these schemes was that this kind of seizure-by-force wasn't possible (absent exploits or insiders).

Guns. Guns are how. Guns are how governments achieve their objectives. There is no crypto scheme, no algorithm, no possible arrangement of private keys and Merkle trees that can escape the reality of men with guns.

[deleted]

Re: $477M FTX ‘hack’ was a Bahamian government asset seizure

#70

Post by TacticalCoder »

throwaway9980 wrote: post #26
woodruffw wrote: post #19

Maybe this is a stupid question, but how ? Was the Bahamas' SEC holding its own copies of FTX's keys? I thought the entire point of these schemes was that this kind of seizure-by-force wasn't possible (absent exploits or insiders).

Guns. Guns are how. Guns are how governments achieve their objectives. There is no crypto scheme, no algorithm, no possible arrangement of private keys and Merkle trees that can escape the reality of men with guns.

> There is no crypto scheme, no algorithm, no possible arrangement of private keys and Merkle trees that can escape the reality of men with guns.

On the contrary. It's the only case where maths can defend vs men with guns.

Multi sig schemes spread over different people over several continents make the "men with guns" thing very difficult. Or multisig but m-out-of-n, with a dead beat: if after x weeks you don't hear of person A, person B and C move the coins to a new sig where person A isn't involved anymore.

There are also a shitloads of things you can do with smart contracts. For example you can have a smart contract where if person A's private key doesn't sign anything for more than x weeks ("blocks"), the funds are destroyed.

There also the whole plausible deniability thing: where it's impossible to know where a hardware unlocked with a hardware wallet is the real thing or not.

$5 wrench attack, here's my real password: take the 50 millions. Oops. Decoy. On the other password there's $2bn.

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