I’m glad to see that fraternal crypto fraud is no longer a monopoly of the Winkelvoss twins.
Also glad to see my alma mater in the press.
Crypto brothers front-ran the front-runners
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Re: Crypto brothers front-ran the front-runners
#42It's heartbreaking to me that these guys aren't just allowed to get away with this. What's even the point of cryptocurrency if the algorithm isn't law?
Re: Crypto brothers front-ran the front-runners
#43I really don’t see what these guys did wrong. Good for them for making away with $25 million…the government should leave them alone. After all, crypto bros wanted decentralized finance where code is law. But they’ll run to the government when someone outsmarts them. Reminds me of people from corrupt countries parking their money in countries with strong rule of law, where they know it can’t be seized without due proc…
> crypto bros wanted decentralized finance where code is law Ethereum and associated "defi" people are emphatically not the same people as the "code is law" people. One of the first things Ethereum did was throw out the whole notion of "the rules are the rules" during this event, when they rolled back the entire ethereum blockchain after a clever trade that wiped out a (now defunct) shitcoining operation: https://en.…
> when they rolled back the entire ethereum blockchain
The Ethereum did a dick move but there was no rollback of the chain. None. Zero.
What happened is that the ETHs from the DAO hacks were locked for a few weeks (months?) in a smart contract, even after the hack. The (dark side) hacker couldn't get them immediately. So kid Vitalik quickly changed the code and pushed a new versions in which the rules of the game were modified, preventing the unlocking of the stolen ETHs.
But at no point was a single transaction rolled back.
Re: Crypto brothers front-ran the front-runners
#44Sorry, don't get it. We can also say that Vitalik manipulated Ethereum protocol when the DAO hack ocurred, even if the DAO hack was a crime. There is no precise line to define what is right or wrong in crypto.
Rephrasing it: there are a lot of things that happen in crypto, MEV itself, that are no different than what these brothers did.
Re: Crypto brothers front-ran the front-runners
#45I'm uncomfortable with the tax dollars of hard working people being used to defend the likes of those who use robots with million dollar wallets to rake up the low hanging fruit of digital arbitrage on an entirely unregulated network. They wanted the rewards that came with this risk. Now that they got hustled, they cry foul, and the DOJ is going to spend huge amounts of money litigating their case? Perhaps it is in a…
TFA: "They worry that this microsecond-scale competition between algorithms is socially wasteful" I would LOVE to see a stock market that (a) time-penalizes large orders -- 1 share trades in a microsecond, 10000 shares takes a week to execute OR (b) adds a random time delay to all orders in the range of [0,60] minutes for corporations, [0,10] minutes for residential traders, and [0,1] minutes for people who have prov…
IEX runs with similar goals in mind to ban HFTs with special access and level the playing field.
Re: Crypto brothers front-ran the front-runners
#46I feel like the people who wonder why this is a crime are missing something pretty important: this isn't the SEC attempting to regulate a crypto market by prosecuting securities fraud, it's the DOJ prosecuting straight-up old fashioned fraud. The crime is changing the terms of the transaction within the 12 second time frame after it had begun but before it had finished, and ultimately selling something different than what was promised. It doesn't matter that it's crypto, you could similarly be prosecuted for fraud by selling counterfeit pokemon cards if prosecutors could prove you knew that you were misrepresenting the cards as genuine cards. Here, the prosecutors have all the evidence they need from the code, and the Google searches showing what their intent was in writing that code.
Re: Crypto brothers front-ran the front-runners
#47A (very) technical explanation of the attack: https://collective.flashbots.net/t/post-mortem-april-3rd-202...
@scrlk summed it up:
MEV bots sandwich attacking traders = okay
MEV bots sandwich attacking other MEV bots = fraud
Re: Crypto brothers front-ran the front-runners
#48[dupe]
More discussion: https://news.ycombinator.com/item?id=40375258
And on official Justice post:
Re: Crypto brothers front-ran the front-runners
#49Earlier quoted context omitted.
The reason for crypto to exist is to be a secondary financial system that you didn't need to be well connected to old-money entities or families in order to "win" from. The 2008 financial crash spurred many anti-capitalist and hyper-capitalist movements, one of the latter being cryptocurrency. They saw how nakedly well-connected people absolutely cashed the fuck out with the near-collapse of the banking system permit…
>you didn't need to be well connected to old-money entities or families in order to "win" from. And this was always a lie. One of the biggest boosters of crypto is Andreesen-Horowitz FFS, and plenty of the rest of the people well known in the industry are just Wall Street Finance bros or dotcom boom lottery winners.
And to the extent that there are “normal people” making money in crypto, they’re doing it in all the same slimey ways the slimeballs of ye olde traditional finance did it: rent-seeking, speculation, and insider trading.
Like seriously, how laughably obvious can the whole spiel be? Let’s all switch to this other currency because it’s “more fair,” and yes I do happen to already have a gigantic stake in this new currency and I’m just looking for you to come in at the ground floor so you can inflate my wealth!
Anything productive happening at any point in any of this? Well considering my entire motto is HODL, how could I possibly be doing anything productive? It is the purest, most naked form of rent-seeking someone could invent.
Re: Crypto brothers front-ran the front-runners
#50I'm uncomfortable with the tax dollars of hard working people being used to defend the likes of those who use robots with million dollar wallets to rake up the low hanging fruit of digital arbitrage on an entirely unregulated network. They wanted the rewards that came with this risk. Now that they got hustled, they cry foul, and the DOJ is going to spend huge amounts of money litigating their case? Perhaps it is in a…
> they got hustled, they cry foul, and the DOJ is going to spend huge amounts of money litigating their case? Do we know how the case originated? I similarly agree this seems bizarre. It’s probably illegal. But unless it’s setting an important precedent it seems like a waste of public money.
Oh it won't be a waste. DoJ will seize, fine, and disgorge enough to cover the prosecution and some. An easy cash grab from an unsympathetic defendent who lacks the lawyers of the corporate bot runners.