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Founder of crypto lender Celsius Network arrested, charged with fraud

reuters.com

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Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#311

Post by bandrami »

chemmail wrote: post #298
legitster wrote: post #69

Let'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…

If you really look deep down into crypto, its really just Uber or Airbnb skirting the law with technical, and often mental loopholes. You need a license to drive taxi or rent out your place. But NO i'm just sharing my ride or i'm just sharing my house, no taxi/renting going on here! At the end of the day you are offering the same service that is regulated, calling it something else can only get you so far until you p…

Uber can't take street hails, though, which is what you need a taxi medallion for. That's why they're a fleet limo service rather than a cab company.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#312

Post by Nursie »

DennisP wrote: post #102
legitster wrote: post #69

Let'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 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...

I don’t think it’s clear from that case that XRP is not a security - “The SEC won a partial victory as Torres found the company's $728.9 million of XRP sales to hedge funds and other sophisticated buyers amounted to unregistered sales of securities.”

It seems more that selling it on exchanges was not a violation of the law, but some of the activities around it still were.

(Edit - in fact it may not even be that, according to a footnote - "The court does not address whether secondary market sales of XRP constitute offers and sales of investment contracts because that question is not properly before the court." - so it looks like ripple aren't in trouble for selling XRP on exchanges, but that doesn't necessarily mean the exchanges aren't in trouble for it)

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#313

Post by dcist »

bertil wrote: post #256

I haven’t followed crypto very closely, but I noticed a few names. I’ve read the headlines for the last few weeks. It seems like most prominent players are now in legal trouble, enough to force them to cease operations. Who are the most prominent players who are operating?

Vitalik Buterin

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#314

Post by fbdab103 »

celdon25 wrote: post #120
reaperman wrote: post #105

Earlier quoted context omitted.

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…

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.

After MtGox realized how much money they had lost, I would think that "in the bathtub" implied a significantly darker event than hygiene.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#315

Post by triceratops »

okwubodu wrote: post #248
majormajor wrote: post #133

Earlier quoted context omitted.

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; nec…

What's the common enterprise? Buying sneakers gives you a pair of sneakers, not the right to a piece of Nike's profits.

In this case the sneakers sound like a commodity, not a security.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#316

Post by okwubodu »

triceratops wrote: post #315
okwubodu wrote: post #248

Earlier quoted context omitted.

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; nec…

What's the common enterprise? Buying sneakers gives you a pair of sneakers, not the right to a piece of Nike's profits. In this case the sneakers sound like a commodity, not a security.

I agree. My point is that calling them a security is consistent with the SEC’s position on what makes a digital asset a security.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#317

Post by LodeOfCode »

okwubodu wrote: post #248
majormajor wrote: post #133

Earlier quoted context omitted.

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; nec…

Where this fails is

>to be derived from the efforts of others

The buyer expects to derive profits from arbitrage to the existing market value. If Nike shut down the moment you bought the shoes the profits would still be realized, because they don't require any effort on Nike's part.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#318

Post by HWR_14 »

legitster wrote: post #129
wpietri wrote: post #87

Earlier quoted context omitted.

The important difference being that Pokemon cards don't meet the Howey test: https://www.investopedia.com/terms/h/howey-test.asp So yes, if finance were unregulated, then he wouldn't have been violating the securities regulations that didn't exist. But they did exist, and the Howey Test is from 1946, so it shouldn't have been a surprise. A lot of people tried to pretend that the existing financial regulations, many o…

> It's a good question for philosophers and spectators, but personally I don't care at all Please don't be so narrow sighted. Have you ever been charged with a crime you didn't know was a crime? You don't think overzealous sheriffs or prosecutors love pulling out old statutes on people? Holding people accountable for laws they had no reasonable way of knowing is a miscarriage of justice. Our criminal system absolutel…

I think people running billion dollar companies with the ability to access effectively unlimited lawyers in an industry with constant news coverage in major papers about how it is dubiously legal while writing to the agency in charge don't get to use the "how was I supposed to know about an obscure law from 1841" excuse.

Courts never struggled with the legal definition of a sandwich. But yes, they had to come to a decision on what counted for legal reasons.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#319

Post by HWR_14 »

rightbyte wrote: post #208
pessimizer wrote: post #183

Earlier quoted context omitted.

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…

How can MtG be even remotely comparable to cigarettes? I would buy a comparison to lotteries or "loot boxes" due to boosters ...

Cigarettes are the only (legal) product it is illegal to market (in the US) except in very limited ways. The poster was saying that MtG should also be illegal to market, and therefore has to be compared to cigarettes in that limitation.

Much like if they had talked about an age limit on purchasing them, it would be related to cigarettes or alcohol (in the US).

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#320

Post by sethd »

legitster wrote: post #69

Let'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…

> legitimate fraud

I understand the intent, but part of my brain is having a hard time with this wording. :)

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