Waa looking to see if he was featured in the Forbes magazine front cover. He was somewhat praised in their articles. I guess it is true, Forbes is the honeypot for Tech scumbags haha
Founder of crypto lender Celsius Network arrested, charged with fraud
241–250 of 379 posts
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#242Let'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…
You may be aware already, but if you replace Pokemon with Magic the Gathering cards this actually becomes almost unbelievably close to a true story (minus the SEC story arc). The first "huge" bitcoin exchange[0] was originally a Magic card exchange which got extended to support cryptocurrencies. "Mt. Gox" = "Magic the Gathering online exchange". If it hadn't been hacked it would likely be in Coinbase's shoes right no…
[dead]
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#243Let'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…
what does bitcoin have to do with it?
If anything, holding bitcoin (with self custody) protects you from this sort of thing because there's no counter party risk. From that standpoint, holding bitcoin does not have counter party risk, unlike holding gold or equities in an online account.
don't throw the baby out with the bathwater.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#244Let'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…
Whether something is a security is up to the SEC and other federal agencies, not the companies making Crypto. Ignorance of securities regulation isn't an excuse.
Based on today's XRP case, it appears to actually be up to the courts.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#245Earlier quoted context omitted.
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…
Some libertarians answer that yes, people are assholes, but that includes the people in the government.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#246"Somebody is lying. Either the bank is lying or Celsius is lying.” - Alex Mashinsky EDIT: omg at the almost $5B settlement https://www.cnbc.com/2023/07/13/former-celsius-ceo-arrested-... ("The FTC also announced a $4.7 billion settlement against the exchange, which will not be paid until creditors and investors have been repaid in bankruptcy proceedings.")
The FTC determined that the exchange is guilty of defrauding investors because Celsius defrauded customers . And the remediation is that investors get their money back. Kind of weird when you think about it. But it's a good reminder that the goal of the FTC is to protect investors.
[dead]
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#247Would someone explain to me what the endgame of these fraudsters is? I mean, of course they are trying to get rich quick pulling these schemes but you would believe that they do it because they perceive that there is some sort of opportunity to cash out without inevitably going to prison some day, right? What is the thought process in the mind of these criminals when shit hits the fan? Maybe just hire very expensive…
Some of them do exit. There are many crypto pump-and-dump schemes where the project website is zombified, and the founders are MIA (and are probably sipping cocktails on a beach somewhere).
The big fish though... The FTX founder was described as being a gambling addict: he would take any risk as long as the outcome was statistically favorable. And I think this attitude was pervasive among many of the biggest crypto names. They were't looking for exits, they were looking to go even bigger because they can't help themselves.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#248Let'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…
The physical collectibles market is over a century old for baseball cards. So far the SEC hasn't stepped in for places trading baseball cards, magic cards, pokemon cards, sneakers, etc. So the burden of proof seems to be on the claim that they're the same, or that it's a meaningful analogy. But hey, let's look at the this case - the accused did the following: * created their own token (ok, so they aren't just a card…
To be clear, I think Celsius committed actual fraud. I just want to talk about one particular point here.
> So the burden of proof seems to be on the claim that they're the same, or that it's a meaningful analogy.
I have a pair of “Dear Summer” Off-White x Nike Dunk Lows, the last collection released while Virgil Abloh was alive. The SNKRs (Nike) app randomly selected active users for the chance to purchase them; necessary, because they were guaranteed to sell out instantly. At the time of purchase nobody had any clue what the shoes would look like, nor which "n of 50" colorway they would get. We were presented with a picture of the shoebox, a size selection, a buy button, and a countdown timer. However, it's not far off to say that despite this, every single person (remember, only active users got this notification) that initially purchased the shoe did so knowing there was absolutely no chance that a limited edition Off-White/Virgil Abloh/Nike shoe would sell for less than a 100%+ premium over retail on the aftermarket. Completely risk-free, assuming $180 wouldn't hurt your pockets in the near term.
Under the SEC's reading of the Howey Test that omits the word "solely," the purchase of these shoes constitute
1. An investment of money (check)
2. In a common enterprise (check. Let's be honest, the majority of pairs sold hit the resell market immediately. Forman, 421 U.S. at 852-53 may not be applicable.)
3. With the expectation of profit (check, check, check) to be derived from the efforts of others (the ongoing reputation and marketing efforts of everyone involved),
making them unregistered securities.
Naturally, this means Nike has to "come in and register," for every limited supply drop, StockX and GOAT have to register as securities exchanges, and only accredited investors are allowed to purchase at retail. Anything else is clearly a violation of The Law.
All of this is perfectly reasonable because, "the law is clear, we’re obligated…to enforce the law as Congress passed it and how the courts interpret it," as Chair Gensler put it.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#249Earlier quoted context omitted.
Mtgox was not run very professionally, so I doubt they would have lasted this long. I had to deal with them on IRC to get my money out. I was told that the person with the keys to get my withdrawal was “in the bathtub”. This was on the last day or so before everything was shut down and during the actual crisis, mind you.
When your house of cards comes tumbling down might as well take a bath to relieve the stress
"house of magic cards" maybe .. ba-dum-chaa
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#250Let'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…
> Tomorrow, the SEC decides that [whatever] are securities
That's not really the way this works. "Security" is defined by law, not by the SEC. Existing stock markets and other trading entities have existing regulatory relationships with the SEC, but the SEC's enforcement powers aren't remotely limited just to the NYSE et. al. The question is why Celsius thought they didn't need to follow securities regulation, given their business.
Because, and let's be honest here, crypto coins and assets are really just obviously securities by any reasonable interpretation. They're abstract tokens of ownership, they're liquid, they're traded with others in the same kind of way (via an exchange intermediary), and for the same reasons (investment).[1]
Clearly this was the way things were going to shake out. Could the SEC have been clearer? Surely. But to pretend that Celsius couldn't have seen this coming is ridiculous.
[1] FWIW: note that trading cards and other collectibles fail most of these tests. While sometimes you buy them for investment or on exchanges, they remain primarily physical devices providing a means to play a game.