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

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

#351

Post by thethimble »

dropnerd wrote: post #317
thethimble wrote: post #315

Earlier quoted context omitted.

To state it directly, the vast majority of the population doesn’t have the capability of assessing risk in speculative investments and is disproportionately susceptible to fraud. You give the example of “investing in startups” without also describing that most startups fail.

i understand why we might want to dissuade speculative investments, byt why is it the state's role to prevent citizens from speculating?

It’s not a perfect analogy but it’s the same reason we have laws that require seatbelts. In theory this impinges on the liberty of adults, but in practice the it obviously saves lives.

When people commit harm to themselves out of ignorance, I think it’s reasonable for a government to step in.

Note that I think it’s reasonable to fundamentally disagree from a libertarian standpoint but I don’t see many reasonable people arguing against seatbelt laws.

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

#352

Post by chii »

ekidd wrote: post #312
LeifCarrotson wrote: post #205

Earlier quoted context omitted.

I think a lot of the appeal of crypto/smart contracts is that they are final with little to no recourse, humans can't intervene and exploit failure modes which individuals using the so-called contracts can't defend against. Corporations and wealthy individuals with influence in the writing of this legal system, with massive amounts of financial resources, with negligible moral agency, and with limited criminal liabil…

> Those who find themselves on the other side of this power disparity would often prefer to risk a potentially buggy but inviolate contract than one which they expect to be abused against them. There is no way that AT&T, Comcast or Bank of America will ever agree to a smart contract written by an ordinary customer. As always, the companies will write their own contracts, and customers will either accept them, or leav…

so what happens if the company's smart contract has a bug in it, and the customer takes advantage of it?

In an analogous situation, if a shop mis-labels the price of an item (let's say, they forgot a zero or two for a $1000 item), the customer theoretically has the legal basis to purchase it at the labeled price. How is this scenario any different to a block chain contract with a bug?

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

#353

Post by turtledove »

randomhodler84 wrote: post #347
turtledove wrote: post #313

Earlier quoted context omitted.

It's not the same, and you are delusional to think that I'm being irrational. A 401k has regulations. My broker has a fiduciary duty to act in my best interest. The money invested into the markets helps power the economy. And yes, I am spiteful towards grifters and conmen. Don't be tolerant of them, it makes you a bad person.

I don’t think tolerance makes you a bad person at all. Quite the opposite. Just be respectful and don’t be joyful when others are down.

Have fun living in a world of people taking advantage of you, I guess.

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

#354

Post by setr »

knorker wrote: post #121
nomel wrote: post #113

Earlier quoted context omitted.

> 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?

The article even hints at this: > [a crypto bro] criticized the team for turning to a centralized institution like the courts for help But that's exactly the flaw of smart contracts, and why its promises will never work. The hard part of contracts was never execution. The hard part was always conflict resolution and abidance by fair rules (i.e. "laws"). The hard part is what creates the overhead. Smart contracts neve…

Eventually there will be smart contracts with assigned arbitrators capable of undoing dependent smart contract transactions, with the right to execute granted by a separate smart contract, which is controlled by a vote to be taken by a randomly selected set of peers in the community, who must first watch in total a video of the aggrieved and offending parties position their argument.

And arbitration contracts that can arbitrate the arbitration contracts, and so on.

And perhaps a smart contract to allow the amendment of existing contract, by vote of a group of wallets who’ve been elected by another smart contract, who’ve been elected by another smart contract with a larger pool of voters, and so on, until all stakeholders in the contract have had the chance to cast a vote, whose duration as a voter is limited to a 2-4 year term, before requiring another voting round.

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

#355

Post by DannyBee »

notahacker wrote: post #140
DannyBee wrote: post #82

Earlier quoted context omitted.

This claim makes no sense. In the real world, crimes have very specific definitions. Most are physical, in fact. For example, robbery is when, with intent to commit theft, you take property by force. Anything else is not robbery. Theft by taking is: when a person unlawfully takes or, being in lawful possession thereof, unlawfully appropriates any property of another with the intention of depriving him of the property…

In addition to sounding like textbook embezzlement , I don't think there's any reason to believe that "theft" as define by that very broad Georgia definition couldn't apply here (the "unlawfully" is to exclude certain property appropriations explicitly permitted by law like bailiff seizures or deposit retentions from the definition, not to mean it's not theft if you keep someone's property against their will without…

I will admit have avoided trying to follow the entire rabbit hole of details on this case. So feel free to point out where i've missed some facts. From what i've seen I doubt it would be considered theft for the simple reason that the tokens that were bought/sold didn't belong to anyone else in particular who you could say it was appropriated from. He also paid for all of it, and paid the fair value at the time.

In fact, he paid very high prices for the initial tokens (860 times initial value at one point). Then gave away a bunch of tokens. Then waited for an algorithm to do something dumb around the pricing, and then swapped the tokens.

Who exactly did he appropriate property from here? He paid for all of it, and paid the prices the market demanded. The algorithm did something dumb, but that is no different than some trading bot algorithm doing something dumb and selling for less than it should, which happens all the time.

As for embezzlement, it requires a trust relationship - it's a violation of a fiduciary duty.

I don't think he had one?

So far, i've not seen any criminal charges here, only civil ones. Certainly prosecutors are slower at this sort of thing, but i'll be interested to see what happens.

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

#356

Post by malermeister »

QuantumGood wrote: post #336
giantg2 wrote: post #251

"In their complaint, lawyers for Kellar and Day argued that two particular steps of the attack violated statutes against market manipulation and computer hacking." So now they want crypto to be treated as regulated securities, but let me guess, only when it benefits them...

Most want the law to benefit them if they suffer harm, even if it can be argued to be self-harm. Most pay little attention to the law if no harm is taking place... unless the law will cause harm. This isn't unique to DeFi

What's unique to DeFi is that they're trying to circumvent there laws trying to prevent harm to others, while still wanting to be protected themselves.

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

#357

Post by albertgoeswoof »

Dylan16807 wrote: post #222
albertgoeswoof wrote: post #176

Earlier quoted context omitted.

But the NFT was actually stolen, she was phished for her seed phrase, and the criminal moved ownership of the nft to their wallet, and then sold that to the person who was interviewed on the podcast. It’s no different to a thief stealing your bike then selling it to someone else on a street corner. Just because that person is the current owner and thinks they legitimately purchased it doesn’t make it rightfully their…

An NFT exists purely in the realm of thought, and the owner is whoever knows the password. Therefore phishing the seed phrase is not "actually stealing" it within the rules of NFT. And outside the rules of NFT it's just a receipt; it's worthless. It's taking a picture of a picture of a bike, not stealing it.

That makes no sense- surely the same applies the money in your bank account? Or IP rights? Etc etc.

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

#359

Post by dropnerd »

thethimble wrote: post #351
dropnerd wrote: post #317

Earlier quoted context omitted.

i understand why we might want to dissuade speculative investments, byt why is it the state's role to prevent citizens from speculating?

It’s not a perfect analogy but it’s the same reason we have laws that require seatbelts. In theory this impinges on the liberty of adults, but in practice the it obviously saves lives. When people commit harm to themselves out of ignorance, I think it’s reasonable for a government to step in. Note that I think it’s reasonable to fundamentally disagree from a libertarian standpoint but I don’t see many reasonable peop…

even from a utilitarian stance, the tradeoff for making the system "safer" is that investors miss opportunities that they see but can't take.

something is wrong when you can only buy virgin galactic, not spacex, because of burdensome regulations. the gap between the haves and have nots widen as you must be an accredited investor to buy the biggest winners this decade.

something is wrong when you can buy penny stocks, but experimental defi products exclude the us market because of regulatory concerns. the latter is much more transparent than the former.

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

#360

Post by Dylan16807 »

albertgoeswoof wrote: post #357
Dylan16807 wrote: post #222

Earlier quoted context omitted.

An NFT exists purely in the realm of thought, and the owner is whoever knows the password. Therefore phishing the seed phrase is not "actually stealing" it within the rules of NFT. And outside the rules of NFT it's just a receipt; it's worthless. It's taking a picture of a picture of a bike, not stealing it.

That makes no sense- surely the same applies the money in your bank account? Or IP rights? Etc etc.

Neither of those build up a system where immutable transactions are the absolute arbiter of ownership.

If they did, then the same would apply.

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