Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls” • Hacker News Board

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#141

Post by nathanvanfleet » Thu, Dec 16, 2021, 5:04 PM UTC

JumpCrisscross wrote: post #53

The “I have no sympathy for the victims” comments are crass. But there is a legitimate question of how much law enforcement these crimes deserve. Arizona has a stupid motorists law [1]. If a car “becomes stranded after driving around barricades to enter a flooded stretch of roadway,” the driver “may be charged for the cost of their rescue.” A similar concept for crypto may be necessary. Law enforcement will pursue. B…

Yes let's keep making weird incentives for law enforcement like asset forfeiture. I want police to be like an American ambulance and run my credit card before saving my life.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#142

Post by javajosh » Thu, Dec 16, 2021, 5:04 PM UTC

nradov wrote: post #116

Jerrrry wrote: post #93

Earlier quoted context omitted.

Technical hacks against the protocol and implementations are fair game, and is the implicit incentive that balances the market. Social engineering and financial hacks are not fair game, and are "illicit" in the sense that crypto is obviously an international martial zone. Exhaustively brute forcing a keyspace is valid, making your username an XSS to steal funds from an insecure page/downstream app is not valid. Findi…

You obviously don't understand basic contract law. US Civil courts routinely apply the principle of equity when interpreting written contracts. Loopholes and errors are disregarded when they violate the clear intent of the agreement.

Nothing annoys me more than arrogant ignorance. It's like, pick one! You speak as if these are handled as federal matters, and they are not. Contract disputes are handed as local matters, usually in a local district court.

Furthermore, when you talk about the court you're talking about a Judge. The Judge gets final say and they can take their sweet time, regard or disregard anything they want. In local matters, Judge's act without restraint. Appellate court, the state bar, the judicial qualification board, federal court, all gets involved so rarely they can be ignored. Additionally, these Judges are no stars of the legal profession: cohorts of lawyers will often rig elections and appointments to favor a well-connected but bad lawyer, because being a judge is actually really easy.

So, yeah, it mostly depends on who the judge likes better, and whether society is better or worse if this dispute is decided this way or the other way. I can't stress enough the arbitrariness, and supreme unaccountably, of a local judge's decisions.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#143

Post by bagels » Thu, Dec 16, 2021, 5:04 PM UTC

Jerrrry wrote: post #126

opportune wrote: post #109

Earlier quoted context omitted.

Fair game and valid according to whom? You cannot legally rob a bank just because they left it unlocked and unmanned. It might be possible to take crypto due to a bug in a protocol, and arguably justifiable, but that doesn’t mean it would hold up in court if you were identified as the one using the exploit.

Socially acceptable. Because I am not going to acknowledge or respect a Turkish summons. Although I would expect a Turkish hit squad. >You cannot legally rob a bank just because they left it unlocked and unmanned. Exactly - because it isn't a bank, it is a bunch of cash on the street, if it was unlocked and unmanned. And even if there was a clear Sticky Note with foreboding text, you would be in the clear to pocket a…

I suspect that your belief about found things is at odds with the law.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#144

Post by mdoms » Thu, Dec 16, 2021, 5:05 PM UTC

damidekronik wrote: post #125

mdoms wrote: post #110

Earlier quoted context omitted.

> The “I have no sympathy for the victims” comments are crass. No, they're not. They're entirely reasonable. Stop trying to shame people for expressing a common, reasonable and fair opinion that you don't like.

Since when scamming is something we should be ok with?

100% of Crypto "investors" are speculators looking for a quick buck by investing in a system that is pumping needlessly huge amount of carbon into the atmosphere. They're not well-meaning victims who stumbled into the bad part of town, they are greedy thoughtless people in search of free money.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#145

Post by vmception » Thu, Dec 16, 2021, 5:05 PM UTC

BoppreH wrote: post #135

vmception wrote: post #95

Earlier quoted context omitted.

your bank fraud protection doesn't prevent the bank from losing money. banks lose a lot of money to fraud and nobody is prosecuted. from my perspective, you are comparing a user experience that has nothing to do with the technology. a bank is a third party service providing custody to bearer instruments. a future financial institution will be a third party service providing custody or other protections to your crypto…

> banks lose a lot of money to fraud and nobody is prosecuted. That's true some times, but then it works like an insurance policy to me. I like insurance, especially when it's about my life savings. > a future financial institution will be a third party service providing custody or other protections to your crypto bearer instruments. As you mentioned, that's a bank. There's no reason to believe that crypto-based bank…

> There's no reason to believe that crypto-based banks will be any better than traditional ones

That wasn't the supposition. Who cares? Wait I know people that do care, you thought I was one of those? I view blockchains as a platform to launch projects, and crypto as the necessary fuel to use those platforms, I like the censorship resistance but I don't care about the ideologies, I would like to seamlessly move unlimited sums in and out of them and thats that. I care about fulfilling market needs and niches, I don't care about the accuracy of those needs.

Regarding Defi insurance protocols, there is a lot of education necessary and some ease of use improvements necessary.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#146

Post by mraudiobook_com » Thu, Dec 16, 2021, 5:06 PM UTC

vmception wrote: post #114

PragmaticPulp wrote: post #106

Earlier quoted context omitted.

> One example of a "rug pull" is that the team provided liquidity to the AMM liquidity pool, and then removed it, leaving people with no where to trade the token. Its honestly hard for me to call that a scam If the team went through all of these steps with the intention of pumping the value of the coin, hyping others into buying it, and then extracting as much money from them as possible with no intentions of helping…

And you think thats what I just did here? Describing why the categorization is wrong to you is a symptom of victim blaming? My point stands that the community can do what the team did but fail to take further risk or organize. They disperse just like the issuer did, when in fact they do all have agency and can fill the vacuum. unless the token was backdoored, then we can call it a scam.

How do you reply to a comment so fast. Is there a way to get notified if your comment gets replied to?

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#147

Post by dmitriid » Thu, Dec 16, 2021, 5:06 PM UTC

JumpCrisscross wrote: post #53

The “I have no sympathy for the victims” comments are crass. But there is a legitimate question of how much law enforcement these crimes deserve. Arizona has a stupid motorists law [1]. If a car “becomes stranded after driving around barricades to enter a flooded stretch of roadway,” the driver “may be charged for the cost of their rescue.” A similar concept for crypto may be necessary. Law enforcement will pursue. B…

> The “I have no sympathy for the victims” comments are crass.

There are exactly two types of people in the crypto space:

- scammers, who know exactly what they are doing

- fools, who have very little understanding of how the world works

And yes. Fool and his money are easily parted.

So, are the comments crass? No. Not in the least.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#148

Post by Sohcahtoa82 » Thu, Dec 16, 2021, 5:06 PM UTC

wyager wrote: post #3

I often wonder to what extent scams like this have positive externalities, insofar as the people who get scammed were perhaps unlikely to allocate capital in socially efficient ways.

Define "socially efficient ways", because that sounds like a dog whistle.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#149

Post by surfingdino » Thu, Dec 16, 2021, 5:07 PM UTC

BoppreH wrote: post #78

cheeseomlit wrote: post #66

Earlier quoted context omitted.

>How can crypto users protect themselves without recreating traditional banking? They could just invest in well-established projects with proven technology instead of obvious scams in hopes of a "moon shot". This has very little to do with Bitcoin and other legitimate projects, which are a far cry from useless fly-by-night ERC-20 tokens with stupid animal names

Bitcoin/Ethereum is what allowed these scams to be executed, not be reverted, and to go unpunished. If you want to push for those technologies, you have to explain how to give consumers a minimum level of protection.

There are plenty of ways and tools for the scammers to be tracked on a public blockchain. Tokens are not worth much until they are exchanged for fiat currency. The authorities do not want to chase after them, yet, but anyone engaging in such fraud is leaving plenty of evidence on public, cryptographically protected blockchains to provide evidence that's difficult to repudiate. Sooner of later those responsible will be brought to justice.

I am working with people in the banking industry to add a layer of protection without compromising core values of crypto (permissionless, trustless), but funnily enough they do not want to do anything against the regulators. Retail banks have become very cautious after 2008 and won't do anything unless they are told to do it by the regulators. And the regulators are a bit clueless, tbh.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#150

Post by criddell » Thu, Dec 16, 2021, 5:07 PM UTC

mdoms wrote: post #118

TacticalCoder wrote: post #89

Earlier quoted context omitted.

Yes, and although likely a scam, here's another datapoint: Coinbase, an Y combinator unicorn, is behind Centre/Circle and the USDC stable coin. And there are now $41.5 bn USDC circulating. At one point it was billion of USDT circulating and USDC didn't exist yet. Then USDC began to took off and there were, out of memory, $5 bn USDC and $23 bn USDT. But, overall, the trajectory is clear: USDC is growing faster than US…

> It's an american company, with real people behind it. It's not some scammy thing in the Bahamas. Oh yes I forgot Americans can't be scammers.

That's a pretty uncharitable interpretation.