Obligatory Matt Levine article on the topic: https://www.bloomberg.com/opinion/articles/2023-07-13/celsiu...
Obligatory paywall bypass link: https://archive.li/vELkq
Founder of crypto lender Celsius Network arrested, charged with fraud
301–310 of 379 posts
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#302Crypto is a fraudster's paradise.
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…
> All the years and all the money spent on the mining/blockchain/smart contract/ICO/DAO/NFT/DeFi/Web3 series of bullshit "innovations" could have gone to real technology and real companies.
Really? I imagine all the effort simply redirected towards social media (bad), adtech (bad), fintech (mostly based on ZIRP, like BNPL), self-driving cars (pie in the sky) and gig economy. The only truly useful thing SV worked on in the past decade was Cloud.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#303And now "crypto" bros are moving to AI. The never ending story.
AI is not in the same category in my book. Both may be overhyped in some ways, but blockchain technology was fundamentally a bad idea with no legitimate use cases.
> but blockchain technology was fundamentally a bad idea with no legitimate use cases.
Or, you live in a bubble and haven't seen any useful examples. I have compiled some for you: https://news.ycombinator.com/item?id=32406095
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#304Earlier quoted context omitted.
I must be a criminal then lol. Banks are a pain in the ass to deal with. Bitcoin is a very practical and easy way to move large amounts of money around. That's why a lot of people use it. We pay our taxes when transacting it just the same. If you don't use Bitcoin, great, but don't make assumptions about those of us who do.
> Banks are a pain in the ass to deal with. Bitcoin is a very practical and easy way to move large amounts of money around. There is no way you will convince me that setting up and using Bitcoin for daily transactions, all on your own wallet with your keys etc., is “easy” or any less of a “pain in the ass” than using a regular modern bank is on a daily basis. That’s even ignoring the baseline tech literacy one needs…
As a US citizen who has lived for multiple years in Vietnam, I can guarantee to you that using Bitcoin is infinitely easier than dealing with the VN banking system. Forget the legal/identity aspects, just the language and cultural barriers alone are a huge pain in the arse.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#305Earlier quoted context omitted.
Moving large amounts of money 24/7 worldwide, outside of any bank, quickly, low transaction fee - pure P2P, and then being able to store it securely outside of a bank in your pocket. Have you dealt with wiring money before? How about holding large amounts of currency or gold outside of a bank? It sucks.
I transfer money internationally weekly. I would never consider using Bitcoin for this for these reasons: - volatility. This alone kills the wire transfer replacement use case - theft. Just read the news on this one. - speed. Instant SEPA is faster than any cryptocurrency. - fees. Many types of bank transfer are free. Crypto transaction fees are often high. When they're not, they are highly volatile. IMHO 'p2p' and '…
> - speed. Instant SEPA is faster than any cryptocurrency.
Not really, when you take into consideration the KYC aspects.
> - fees. Many types of bank transfer are free. Crypto transaction fees are often high. When they're not, they are highly volatile.
Fees on the L2 chains are fractions of a penny.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#306Earlier quoted context omitted.
Moving large amounts of money 24/7 worldwide, outside of any bank, quickly, low transaction fee - pure P2P, and then being able to store it securely outside of a bank in your pocket. Have you dealt with wiring money before? How about holding large amounts of currency or gold outside of a bank? It sucks.
> Moving large amounts of money I can do this with any remittance company > 24/7 worldwide Table stakes for any remit company > outside of any bank This is a con, not a pro. Banks add value and protect your money. They are regulated, insured and backed. > quickly All remit companies are instant nowadays (except in USA which has stupidly slow banking) > low transaction fee Bitcoin network fees are approximately equal…
> Banks add value and protect your money. They are regulated, insured and backed.
Which country are you referring to exactly? Or do you only have a US centric view on these things?
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#307Earlier quoted context omitted.
Which point of the Howey Test do you feel is not satisfied by Pokémon cards? (If your answer has anything to do with the existence of the game, I am curious what you think of baseball cards.) You state that they don't satisfy the test with quite some certainty but left the reasoning to the reader; but, it would seem, to me, like Pokémon cards are no different from many of these cryptocurrencies the SEC is interested…
I deeply disapprove of Magic and honestly think that it shouldn't be allowed to be marketed to children if cigarettes aren't allowed to be marketed towards children. But an enormous number of people actually play the (shockingly boring) game. And while there's little doubt that most of the cards being purchased now are going to end up worthless, the "long term" in Magic has already been reached because it's been arou…
> But an enormous number of people actually play the (shockingly boring) game.
Boring?! That's very subjective, don't you think? It's 'boring' in the sense that chess is boring.
There's an entire market around the cards, yes. You don't _need_ that if you just want to play and have fun, but people will try to min max everything. I used to play with borrowed decks since I figured out as a teen that building decks out of booster packs was far beyond what I was willing to spend.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#308Earlier quoted context omitted.
The one legitimate use case of using blockchain for decentralized digital currency ends up being used by everyone who can’t transfer funds using normal routes. So most of the people using it are either bad actors or speculators Kind of like Tor. Bad actors ruin all kinds of things. People who only see technology will only go on to repeat the mistakes of the past because they lack the necessary domain knowledge to kno…
> So most of the people using it are either bad actors or speculators "bad actors" according to their government, which could mean people who simply want the right to vote, or to live free from oppression, secret police, etc.
Even if we take this at face value and assume these are all dissidents seeking freedom, cryptocurrencies would be a bad idea because they force you to leave a paper trail for prosecutors and deal with intermediaries who could be suborned. If Iranian dissidents buy something with cash, they might find that the person they thought was trustworthy is secretly working for the police and they’re going to have a bad time but they would at least only have proof of that single transaction. If they use cryptocurrency, the police get likely years worth of transaction history and a list of everyone you’ve worked with.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#309Earlier quoted context omitted.
So...the SEC didn't try to make you whole...it recovered about a third of the money you lost to the Ponzi scheme through a disgorgement order. The SEC can order disgorgement of profits from an investment scam (which are then returned to victims to the extent such profits are recoverable), but making victims whole for their losses is a very different thing.
No, the SEC put the org in receivership and then appointed a receiver to find where the money went.
i'm not expert, but that's the court appointing the receiver, and a receiver takes over a company but looks out for creditor's interests.
Re: Founder of crypto lender Celsius Network arrested, charged with fraud
#310"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.
Celsius is not a bank, the customers were junior creditors. Junior creditors get paid after senior creditors. People should not deposit their money in not banks if they want guarantees on their deposits.