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The math prodigy whose hack upended DeFi won’t return funds

bloomberg.com

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Re: The math prodigy whose hack upended DeFi won’t return funds

#161

Post by sushid »

nomel wrote: post #113
Ataraxic wrote: post #94

Earlier quoted context omitted.

That may be the premise, but has that actually be held up and recognized as such in courts in major countries? Like are there precedents regarding this? At that point it's no longer a premise (for those particular countries), but until then it's just a supposition. I think courts are wary to wade deeply into a new financial system like this but at the same time I find it hard to believe that the judiciary and the leg…

> be held up and recognized as such in courts in major countries? Only having a slight understanding of crypto, if local courts are required, what's the point of crypto? Why not use the existing financial systems, where all of this is built in?

Crytocurrencies != smart contracts. The original premise of bitcoin was essentially to create a decentralized fiat currency. As its value grew the thesis then changed to equate more of a decentralized digital gold/inflation hedge that's easier to store and authenticate than actual gold.

So that's one use of crypto.

In the non Web3 world, we typically have to rely solely on the financial institution providing the service to make transactions. That is, we have to have a Paypal account to withdraw from Paypal. We can only buy/sell Robux on Roblox, etc. Smart contracts allow us to essentially utilize any provider we want without the provider having custody of the funds at any given time.

I can go to any dex I want and transact without depositing funds. The dex also cannot agree to perform a transaction and hold my funds hostage, like how Paypal screws over some of their merchants with their "internal investigations." I can also buy/sell coins that the dex mints (e.g. ORCA coin) anywhere I want. It's not tied to a single account nor is it tied to single exchange.

And that's without getting into NFTs, flash loans, LPs, and other features of Web3.

Re: The math prodigy whose hack upended DeFi won’t return funds

#162

Post by daniel-cussen »

silverlake wrote: post #153
SamBam wrote: post #50

> 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…

Citibank mistakenly sent $900M to a bunch of hedge funds. Many refused to return it. Citi lost the court case. https://www.cnn.com/2021/02/16/business/citibank-revlon-laws...

Yeah like the other guy replied, they intended internally to send it to a wash fund but mistakenly (due to a UI glitch) paid the debt back to the lenders. Now that UI glitch was their fault too, so...the courts said, cry all you want.

And they're a gigantic bank, it's the original digital business, every banker knows a single arithmetic error is dangerous.

Just bankers being inept.

Re: The math prodigy whose hack upended DeFi won’t return funds

#163

Post by bix6 »

yobananaboy wrote: post #139
bix6 wrote: post #119

Can someone explain how you can take out a ~$150m flash loan? (Did he post $300m collateral?) Did he only need 3 ETH for that or were the ETH only used for the transaction fees?

The 3 ETH was the gas fees for the transactions. (Some went to deploying the attacking contract, some went to contract interactions afterwards.) With a flash loan, the funds must be returned by the end of the transaction, or the transaction fails. This makes the completion of the transaction the collateral, as if it fails at any point, all transactions (including the loan) get reverted.

Thank you

Re: The math prodigy whose hack upended DeFi won’t return funds

#164

Post by bix6 »

colinmhayes wrote: post #135
bix6 wrote: post #119

Can someone explain how you can take out a ~$150m flash loan? (Did he post $300m collateral?) Did he only need 3 ETH for that or were the ETH only used for the transaction fees?

So flash loans must be repaid before the next block is mined, so you don't need to post any collateral, just the interest. If the loan isn't repaid in time it automatically unwinds and you lose the interest payment.

Thank you

Re: The math prodigy whose hack upended DeFi won’t return funds

#165

Post by criddell »

tablespoon wrote: post #159
colinmhayes wrote: post #125

Earlier quoted context omitted.

There are 2 different issues here. Do courts physically have the ability to change the blockchain so that an NFT goes to a different wallet? No. Do courts have the ability to arrest someone when they ignore a court order to transfer an NFT? Yes. I don't think the courts really care about some pure intentioned "code is law" argument, because they tend to think law is law.

> I don't think the courts really care about some pure intentioned "code is law" argument, because they tend to think law is law. "Code is law" is a mantra chanted by people in no position to make it so.

Kind of like sovereign citizens?

Re: The math prodigy whose hack upended DeFi won’t return funds

#166

Post by antiterra »

zecken wrote: post #123

I feel like the fact this person, per the article, is a white supremacist who used the n-word in his code repeatedly is under-discussed here. Folks here jumping through hoops to rationalize why what he did is actually demonstrative of either flaws in crypto or the purity of arbitrage come off seeming very tone deaf.

What exactly are you proposing here? That we have a different set of financial and legal rules for despicable people? Or that the financial and legal rules everyone is subject to should be based on how they impact a specific despicable person?

If a despicable bigot is facing the death penalty for stealing a bag of chips, would it be ‘tone deaf’ to say that’s an unfair punishment?

Re: The math prodigy whose hack upended DeFi won’t return funds

#167

Post by colinmhayes »

silverlake wrote: post #153
SamBam wrote: post #50

> 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…

Citibank mistakenly sent $900M to a bunch of hedge funds. Many refused to return it. Citi lost the court case. https://www.cnn.com/2021/02/16/business/citibank-revlon-laws...

They accidentally repaid their loan early, which was explicitly allowed in the contract. The hedge funds were under no obligation to pay them back, since the money was now rightfully theirs.

Re: The math prodigy whose hack upended DeFi won’t return funds

#169

Post by dang »

kristjansson wrote: post #73

This is an outright copy of https://www.bloomberg.com/news/features/2022-05-19/crypto-pl... . e: missed at the end of the article: > (Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.) So perhaps this is reproduced under a legit syndication deal?

Ok, we've changed to that from https://www.ndtv.com/business/the-math-prodigy-whose-hack-up... above. Thanks!
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