For all of those involved: play stupid games, win stupid prizes.
The math prodigy whose hack upended DeFi won’t return funds
101–110 of 409 posts
Re: The math prodigy whose hack upended DeFi won’t return funds
#102I find it disturbing that Medjedovic was prosecuted in the first place. If anyone is guilty of this situation, it's Kellar and Day.
Absolutely, they are guilty, but they won't take any responsibility.
When you deploy a smart contract on a permissionless blockchain, you don't own the smart contract or the funds that it controls.
These developers are hypocrites who don't believe in the basic premises of this technology. It is easy to preach the virtues of decentralization when it makes you money and run back in the arms of daddy government when things don't play out in your favor.
Re: The math prodigy whose hack upended DeFi won’t return funds
#103> But in our email exchanges, he argued that he'd executed a perfectly legal series of trades. In real finance, there is an understanding that technical loopholes can exist, since not every outcome can be foreseen when writing laws, but the legal system can frequently prosecute against a series of actions which are, individually, legal, but which together are taken in order to achieve something illegal. That is, mode…
> With this worldview, if the attacker simply exploited poorly-written code to find a loophole, how do the owners of Index have a leg to stand on? They don’t. They simply have to accept it as a bug bounty successfully collected and paid out, and treat it as a learning experience and evolutionary process. Do better next time, if there is a next time.
Good luck making that argument in court. Intent is key, and if this is not the intent of the "smart" (lol) contract, "finder's keeper's" is not a legal defense. The legal system doesn't care about your blockchain arguments.
Re: The math prodigy whose hack upended DeFi won’t return funds
#104What is interesting to me is how it shines a light on the regulatory framework of the non-crypto economy. If you read up on edge cases, there is a lot of people deciding if something is "fair", and my notions of fair and a particular judges notions of fair are often at odds. To steal from Frank Zappa: Legal isn't the same as allowed, allowed isn't the same as fair, fair isn't the same as just, and just isn't music.
A judge is not deciding whether something is "fair" they are deciding whether it is illegal to the letter and/or spirit of the law. The reason this is at odds with us is that many things are legal that are not "fair". The specific danger here legally is trying to apply general laws into an unregulated market. It's a bit like borrowing money from your mate and then trying to take him to court because he's asking for t…
"many things are legal that are not "fair"."
They are, or at least purport to be, fair at some level or through some mechanism most people may not immediately percieve.
When something really isn't fair, even by some indirect means or when accounting for some other imperative like geneneral societal necessity, then they are at least understood to be failures not successes.
This story though... it actually provides a good example of indirect fairness. Well yes and no, there's a point and also a counter to that point, net result throw up my hands glad I'm not in crypto:
Point, it's fair: You got robbed and think it's unfair that there's no recourse. That downside is just the fair price of being in that game at all, which you pay in trade for not having to deal with the traditional system and "the man". You have to absorb the occasional loss from a mistake as just a feature of the environment like the risk of your shipping boat sinking because the ocean is not a safe place. The only protection possible is pay an insurer or maintain your own emergency escrow or something, not any kind of police or rule-daddy.
Point, it's not fair: They are not in fact free of the man, and so they are not really getting the true freedom they are paying for by assuming all responsibility for their own risk.
Re: The math prodigy whose hack upended DeFi won’t return funds
#105Earlier quoted context omitted.
> And then if you like that state, you can then pay to send the working transaction to the mainnet to make that same state occur, in a sure bet. That often isn't true anymore, see https://ethereum.org/en/developers/docs/mev/
MEV is something different though? GPs (excellent) point is that anyone can play out the effects of their transaction locally ad infinitum, and chose to transact once they're convinced of its behavior. Of course, this can't account for the response of other actors, but the point stands that Medjedovic (should have) been taking far less risk than implied by that quote.
Another thing to note is that all the quotes from Medjedovic are directly to a journalist (at Bloomberg, the article was there a few days ago), which leads me to think there are intentional omissions towards the journalist. It is new that this level of detail is reported about happenings in the crypto space, from traditionally and previously non-crypto publications. It had usually been confined to "broad market selloff, here's a bunch of hot takes from our gloomy college friends on how it goes to zero!" instead of "specific incident within a crypto community, here's what happened". Medjedovic on the other hand is only seen as taking advantage of situations, such as a journalist that is perhaps merely enthused by the crypto asset economy at a publication that needs someone looking at it, but maybe not well versed in it or having editors that would notice either.
Re: The math prodigy whose hack upended DeFi won’t return funds
#106Earlier quoted context omitted.
Respectfully disagree. I think I've seen several times the belief(from crypto supporters) that the code is the code is the code, and these are the rules that we play with. The "laws of physics" analogy doesn't match up. I feel like it would be more appropriate in an anarchist society (physics are the only laws, thus everything that obeys physics is game). This feels more like discovering an exploit in a video game. I…
That's not how the law works though, at least not in any country I know of. If you exploit flaws in computer code to steal something of real-world value, that's a crime. We're all bound to the laws of physics, just as in the world of smart contracts all are bound to the laws of code. But none of that changes the existence of the laws of men.
(Replying to this one, but the sibling comment feels similar in vein).
- I'm not really saying the crypto-side argument is right, really just trying to clarify my perception of what they're saying re: the comment above me.
- The physics thing is really just a comment re: when it's hypocrisy and when it's not.
- FWIW, theft in crypto isn't super well-defined to me re: the laws of men either. Maybe someone who knows current law better than me can explain, but calling a function in a contract that sends updates from one pseudonymous address to another... I don't actually know if current written definitions of theft covers that, or needs some court to interpret it as theft. We kind of understand it as people, but I honestly don't know if "laws of men" as written, do.
Re: The math prodigy whose hack upended DeFi won’t return funds
#107Earlier quoted context omitted.
There are lots of stories lately about stolen NFTs. The podcast ReplyAll did an episode where they tracked down the current owner of a stolen NFT. He had sympathy for the original owner but he had no intention of turning it over. I don’t get why purchasing a stolen NFT is different than purchasing a stolen guitar from a pawn shop. Shouldn’t the previous owner be able to use the courts to demand the return of the item…
The whole point of an NFT is that the ownership is on the blockchain and guaranteed by said blockchain - if the courts can "force" return of the NFT than the NFT isn't actually synonymous with the ownership, and so then is kinda pointless.
This is why I struggle understanding the mainstream usecases for crypto. Will it forever be bound to the "only put in what you can afford to lose?" mindset?
Or are people banking on another layered solution which has arbitration, disputes, clawbacks, etc - all built within the blockchain. (I remember EOS discussing something like this)
Note: I understand that risk is present in any financial endeavor, but knowing that the courts can help you does de-risk the amount people will feel comfortable investing.
Re: The math prodigy whose hack upended DeFi won’t return funds
#108The people who genuinely believe "code is law" are stunned to learn that: a) humans won't act "rationally", b) regulations exist for a reason, and c) no, the law is law, code is brittle.
d) I genuinely believe that Medjedovic should show up in court to test that theory. The only thing interesting about this case is how incompetent he was, while having his entire brand and identity be based on intellectual superiority. He should have used a virgin address and Tornado cash. He should have not needed to risk any funds for failure, as he should have tested the transaction in a localhost staging environme…
> The only thing interesting about this case is how incompetent he was
I'm astonished at how poor his OPSEC was. He could have taken any number of precautions to shield his identity -- did he really think that deleting the messages on Discord would be sufficient?
Re: The math prodigy whose hack upended DeFi won’t return funds
#109You love to see it. Love to see crypto taking Ls.
“Love to see your retirement 401k investments lose, eating away at your life’s labor and rendering it worthless.”
This is a nasty position to take. You should never take joy at others losses.
Re: The math prodigy whose hack upended DeFi won’t return funds
#110> But in our email exchanges, he argued that he'd executed a perfectly legal series of trades. In real finance, there is an understanding that technical loopholes can exist, since not every outcome can be foreseen when writing laws, but the legal system can frequently prosecute against a series of actions which are, individually, legal, but which together are taken in order to achieve something illegal. That is, mode…
I never hear "code is law" from defi protocols, their ToS, or really from anyone. It's only the detractors of Web3 who tout this false logic of "code is law" so I guess you're screwed.
Examples of code NOT being the law: Some defi protocols have made those affected by a hack/loophole whole again with their own funds. Some defi protocols explicitly exclude certain jurisdictions like the US from accessing their protocol. Surely if they all belived "code is law" they wouldn't give a fuck, right?