He has quite the personal website: https://www.mashinsky.com/
Hopefully he updates https://www.mashinsky.com/failed-ventures
Founder of crypto lender Celsius Network arrested, charged with fraud
171–180 of 379 posts
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#172Earlier quoted context omitted.
The most amusing part of crypto is watching libertarians learn in realtime why these regulations exist
Absolutely agreed. Back in college I met some very sincere, thoughtful, and kind libertarians. I occasionally imagine how horrified they'd be to learn that their considered and nuanced political philosophy had become a popular fig leaf for "I do what I want without regard to harm for others".
The problem is libertarianism has always been this way. Typically when you're younger it sounds like a good idea. It would likely work if people weren't assholes. Then you grow up and realize people are assholes. Most people grow out of their libertarian phase, but the ones I worry about are those that don't. All I can think about when I see an old libertarian is "That asshole would install a toxic waste dump beside my house and make me spend the rest of my short life suing them for damages"
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#173Earlier quoted context omitted.
People aren't buying Pokémon cards to "complete their collection": they are buying them because they think someone else will pay more for them later, presumably because they want to "complete their collection", but that makes just as little sense... they too will be buying it from the first person in order to sell it to a third person. There is supposedly a game attached to Pokémon cards, but that excuse to establish…
> There is supposedly a game attached to Pokémon cards, but that excuse to establish "utility" is pretty flimsy Playing the game is a game. (There are dozens of major tournaments, including national and world championships, of people playing the game.) Collecting the cards is also, in a different way, a game. They have made a product that people do things with. You are essentially trying to define all products with r…
I am just drawing an analogy to the same BS arguments that the SEC--and the anti-crypto crowd on this forum--like to make against projects like Filecoin.
Why do you then believe that cryptocurrencies are somehow different? How about Axie Infinity, which is specifically a game similar to Pokémon cards?
Why is it somehow sufficient for Pokémon cards to say "a game is a game" but you say that for crypto and you are "shilling your shitcoin"?
Do you believe this to be different for baseball cards, which do not have a game, or for competing collectible card games which never got popular?
(After all, if you are willing to say that just wanting to collect and trade cards for purposes of making money is itself a game that establishes utility, what are you even trying to regulate in the first place? Aren't you then just making all securities into products?)
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#174Let's say I run a swap meet for people to buy and sell Pokémon cards. There are lots of scammers out there, but I promise people they are going to get good prices. And I even offer to buy cards off of people at good prices to drum up interest. Tomorrow, the SEC decides that Pokémon cards are securities (far-fetched, but work with me here) Suddenly, anyone buying and selling them becomes a criminal. I tell people via…
I think the way to understand this is that the SEC is concerned about protecting unsophisticated regular folks from being scammed. If you started aggressively marketing your Pokemon cards, presenting them as financially sound investments, and regular people started putting their entire pension savings into them lured by false promises and being scammed, then the SEC might well take an interest in Pokemon cards as wel…
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Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#175Earlier quoted context omitted.
And unfortunately I think the tech industry unintentionally enabled it in a few ways. The internet/mobile boom was a real leap for humanity. (Not an unmixed one, any more than the printing press was. But a real leap nonetheless.) This left a lot investors looking for the Next Big Thing. I think it made regulators very cautious of possibly harming something that could be The Future. Journalists were accustomed to tell…
> Hopefully next time around we can be more discerning, more usefully critical. Like after the destruction of democracy by social media? Or the implosion of the dot com bubble? How many more times does the tech industry get to just say "Hopefully next time!"
That is an excellent question.
For what it's worth, I think that whatever we choose to do, we're going to get a lot less leeway in the future. I was just at a Trust & Safety conference. European legislators and regulators are very much cracking down on the social media space, and it's clear that years of slippery behavior from places like Meta have burned a lot of goodwill.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#176Earlier quoted context omitted.
The writing would definitely be on the wall if the SEC got to make the final decision. But they don't, and they just had a big loss in court with the XRP case. If XRP isn't a security, then most other things traded on exchanges aren't securities either. https://www.reuters.com/legal/us-judge-says-sec-lawsuit-vs-r...
Broader question: Given that SEC enforcement is speculative (eg: we think this might be a security) do they have to pay damages when they're wrong? If not, why? If so, how much?
That conclusion is an assumption of an assumption of an assumption.
First of all, SEC enforcement is both civil and regulatory. The SEC is an independent federal agency. Since it is not a member of a federal executive department it has no criminal enforcement capability. All matters of criminal conduct are forwarded to the Justice Department.
Secondly, SEC enforcement is not speculative. They can seize assets just the same as the Justice Department as a matter of regulatory enforcement and they do so regularly. SEC enforcement agents specialize in securities law which is a legal specialty.
Third, the law is unclear whether crypto, crypto exchanges, and transactions therein qualify as securities. If this activity were to become illegal tomorrow then that becomes a matter for the Justice Department to enforce, not the SEC.
Source: I have relations to a famous (in securities enforcement world) former SEC enforcer.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#177Earlier quoted context omitted.
Thank you! I never understand why journalists don't link to court documents.
They probably do but the editors remove them. It seems that rule number one of running a news site is to never have any external links. It's like a casino, they want you to come in and get lost.
thesmokinggun.com already does provide a fine repository of current and past court filings of interest. They've been around for years, and some journalists do link to them. Intriguingly, the one ad on their site at the moment is for diamond engagement rings.
I suppose that ad's positioning could be just random programmatic placement. But if anyone in the HN community can figure out why court-filing enthusiasts are especially likely to want to buy an engagement ring off an unverified website, I'd love to know more
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#178Earlier quoted context omitted.
In a 50 mile radius around me there are 44 officially sanctioned Pokemon tournaments happening this month. If you look outside your social circle you'll find that a lot of people play the #2 TCG in the world
There were (maybe even are) a ton of people playing Axie Infinity (an NFT rip-off of Pokémon) also; does that mean it isn't a security, because some people actually play it? When I was a kid I certainly knew people (including myself) who played Magic: The Gathering, and yet most of the reason we all bought as many cards as we did was the lottery and collectible trading mechanic. If you are willing to admit that there…
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Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#179Earlier quoted context omitted.
> There is supposedly a game attached to Pokémon cards, but that excuse to establish "utility" is pretty flimsy Playing the game is a game. (There are dozens of major tournaments, including national and world championships, of people playing the game.) Collecting the cards is also, in a different way, a game. They have made a product that people do things with. You are essentially trying to define all products with r…
I am just drawing an analogy to the same BS arguments that the SEC--and the anti-crypto crowd on this forum--like to make against projects like Filecoin. Why do you then believe that cryptocurrencies are somehow different? How about Axie Infinity, which is specifically a game similar to Pokémon cards? Why is it somehow sufficient for Pokémon cards to say "a game is a game" but you say that for crypto and you are "shi…
>Why do you then believe that cryptocurrencies are somehow different? How about Axie Infinity, which is specifically a game similar to Pokémon cards?
The first two words in NFT are "Non-Fungible." Those are certainly not securities.
Level-1 coins (and most L2) are fungible by design. He's not in trouble for dealing in NFTs.
If that's not a meaningful difference, then I'm curious for what your explanation is for why NFTs exist.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#180Earlier quoted context omitted.
Private as in independent of going through any bank or institution like you would have to do to move money internationally in any other form. A store of value like gold, the dollar, or Bitcoin has nothing to do with generating revenue - only the intrinsic value of how hard is it to create more - dollars can be printed, a gold vein can be discovered tomorrow that would crash the price, Bitcoin on the other hand there'…
One nice thing about gold is that we don't have to keep paying money for gold to continue to exist. It will sit on a shelf and not charge us any money for sitting there. Bitcoin exists on a network of computers that need electricity to run. If we stopped paying for this network to run, the bitcoin would stop existing, since the ownership of bitcoin really is solely determined by the ownership records on this computer…
By your own argument gold is expensive - expensive to secure, expensive to transport, slow to transport (time is money), expensive to verify. So yes it does cost money to hold and transact gold. So your same 'leaky' argument applies. Maintaining any store of value or currency is never free, but the benefits far outweigh the costs as now we have an inflation resistant medium on which to trade goods and services with.