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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

#91

Post by mod »

LiquidSky wrote: post #84
TacticalCoder wrote: post #70

Earlier quoted context omitted.

> 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 o…

"We have a seizure warrant for your cryptocurrency." "Ho ho! Good luck, gentlemen! For, you see, I've implemented a multi-signature scheme spread over different people across several continents which requires-" "Understood. Off to jail with you, then."

Sure, but you've made that choice ahead of time. And it doesn't move the coins.

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

#93

Post by [deleted] »

TacticalCoder wrote: post #70
throwaway9980 wrote: post #26

Earlier quoted context omitted.

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 o…

[deleted]

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

#94

Post by hatefulmoron »

TacticalCoder wrote: post #72
cercatrova wrote: post #31

Earlier quoted context omitted.

XKCD 538 remains ever relevant.

Not really. That one has been solved seen Bitcoin BIP 39 with plausible deniability. I mean: unless the attacker knows exactly how much coins you have, he has zero way to way if you're unlocking a decoy wallet or the real one.

The problem I've encountered with schemes like you're describing (such as encryption schemes with decoys) is that it also makes it impossible to verify that you've given everything up.

Say you give the attacker all of your bitcoins/data, they're now incentivized to continue punishing you in perpetuity regardless, since you could have provided a decoy.

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

#95

Post by dathinab »

binarynate wrote: post #80

Any thoughts on why SBF lied to the Vox reporter about it being a hack? https://www.vox.com/future-perfect/23462333/sam-bankman-frie... Maybe he just didn't want to have to explain some breaking news to her.

> [..] accused Bankman-Fried of attempting to undermine their efforts [..] by pushing the second bankruptcy case

if that is true they might have very well had reason to lie until the bankruptcy proceedings in the Bahamas have started successfully/maybe some under the table agreements where completed.

I wouldn't be surprised if they have some deal with the Bahamian government giving them some benefit for allowing the government to size millions of crypto assets.

But there might very well have other reasons. Like them not knowing that the transaction was a asset seizure in context of the bankruptcy proceeding is a possibility as crazy as it might sound.

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

#96

Post by LiquidSky »

mod wrote: post #91
LiquidSky wrote: post #84

Earlier quoted context omitted.

"We have a seizure warrant for your cryptocurrency." "Ho ho! Good luck, gentlemen! For, you see, I've implemented a multi-signature scheme spread over different people across several continents which requires-" "Understood. Off to jail with you, then."

Sure, but you've made that choice ahead of time. And it doesn't move the coins.

And you can chortle over that in your jail cell to your heart's content.

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

#97

Post by Dylan16807 »

devmunchies wrote: post #63
theossuary wrote: post #57

Earlier quoted context omitted.

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.

So why specify guns?

Especially when they're so rarely used in situations like this.

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

#98

Post by throweroni »

zoklet-enjoyer wrote: post #85
justinator wrote: post #77

Earlier quoted context omitted.

>On the contrary. It's the only case where maths can defend vs men with guns. Didn't work in this case.

They didn't have a system set up to protect against that. Their private keys were on a shared email account

Holy wow. That's wild.

Ten years ago when my crypto was worth barely anything I had an airgapped, full disk encrypted, RasPi which required a Shamir's Secret Sharing key arrangement to unlock as my cold storage... just because it was something fun to setup.

Here a multi-billion dollar enterprise has less sophisticated OpSec. Just... wow.

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

#99

Post by nathanvanfleet »

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.

That's a little dramatic

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

#100

Post by polygamous_bat »

gruez wrote: post #22
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).

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

It's never not gonna be funny watching "code is law" people find out that law is, indeed, law.
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