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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

#61

Post by tyre »

JohnFen wrote: post #31
legitster wrote: post #25

Earlier quoted context omitted.

Sure, but the SEC completely controls the definition of criminality here. There was no arrest-able offence until the SEC made it one.

I think that it's more accurate to say that the legality of these actions wasn't clear, which everybody knew from the start. These companies decided to take a risk, and they rolled badly on the dice. The legality is still unclear, too. We don't know whether or not these companies violated the law until a court rules on it.

> the legality of these actions wasn't clear

They were completely clear. The whole time. There were no moments when it was a reasonable thought that securities weren't securities "because blockchain.

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

#62

Post by [deleted] »

thrownaway89865 wrote: post #50

Would 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…

[deleted]

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

#64

Post by deepsquirrelnet »

thrownaway89865 wrote: post #50

Would 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…

Notoriously weak prosecution of white collar crime makes more people willing to take risks. I’m not sure it’s any more complicated than that.

If you’re going to commit small scale fraud, you might as well commit large scale fraud, because on face, it seems less risky.

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

#65

Post by kayodelycaon »

thrownaway89865 wrote: post #50

Would 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…

You’re thinking about this too hard. The vast majority of them have either

1. Not considered what could happen after they have the money.

2. Think they are smart enough to will get away with it.

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

#66

Post by [deleted] »

thrownaway89865 wrote: post #50

Would 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…

[deleted]

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

#67

Post by gloryjulio »

thrownaway89865 wrote: post #50

Would 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…

There are tons of small scale influencer scammers are not prosecuted, and some could even pull the scams again. Logan Paul, techlead..u get the idea

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

#68

Post by codetrotter »

Forgeties79 wrote: post #58
bottlepalm wrote: post #44

This is great for crypto. Justice for scammers who thought crypto users could be taken advantage of without consequence. Ponzi schemes like Celsius are not exclusive to crypto and it's great to know the Justice department will prosecute scammers regardless of the unit of currency being used.

I get what you’re trying to say, but honestly? All this does is hurt the reputation of crypto further. It’s yet another headline about crypto scams/ponzi scheme/etc. projected to an audience that is weary of being easily scammed out of money they believe to be safer elsewhere. No one who is skeptical or on the fence about crypto is going to see this headline and go “oh good! They must be catching the bad guys, so now…

> All this does is hurt the reputation of crypto further.

There is exactly one legitimate “crypto”, and it is named Bitcoin. All else ranges from speculative promises about future possibilities (smart contracts etc) to straight up scams.

Don’t let the people abusing the name of “crypto” detract from the greatness that was the invention of Bitcoin.

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

#69

Post by legitster »

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 text message "pish-posh - there's no way the SEC could enforce this". But people stop coming so I promise them that I can buy up all of their cards anyway. Especially the cards that complete my collection.

Then it gets enforced. Not only did I trade in illegal assets, I am now guilty of fraud for telling people it was safe. I am also guilty of market manipulation! And on top of it, I did it via text message so it's now wire fraud to boot.

As far as I understand reading the charges, this is mostly what he is guilty of. This is a bit different than the "true" type-1 frauds that exist in crypto - the blatant pump and dump schemes, et al. In fact, I would feel safe to say there might have been no fraud without the SEC classification. (EDIT: Ignore this since they also did a lot of legitimate fraud too)

Regardless, the writing is on the wall for crypto. I could not even fathom why you would want to be holding onto even Bitcoin or Ether right now.

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

#70

Post by wpietri »

bottlepalm wrote: post #51
angry_albatross wrote: post #46

Earlier quoted context omitted.

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.

Bitcoin has proven to be an inflation resistant store of value enabling private and fast transactions to anywhere in the world - seems pretty successful to me despite being constantly derided by hacker news for over 10 years now.

Almost every word of that is untrue in practice. But let's focus on the core part, "successful".

Let's compare with M-PESA, a money transfer solution that started around the same time. M-PESA has steadily grown, doing 26 billion transactions last year. [1] Bitcoin was somewhere around 100m transactions for the same period. [2] That's about 0.5% of the volume. And its worse than the raw numbers suggest, in that the M-PESA transactions were things with positive economic impact, whereas a lot of the Bitcoin activity was driven by speculation or crime.

And that's wildly smaller than the number of credit and debit transactions that happened over the same time, of course. Bitcoin was hoping to be "electronic cash", but the shift away from physical cash was toward the already existing digital payment mechanisms, not Bitcoin. Merchant adoption, always small, went into decline years ago.

So no, Bitcoin was not successful in the sort of terms that match its initial goals or what was hyped in the early years.

[1] https://www.statista.com/statistics/1139181/m-pesa-transacti...

[2] based on eyeballing this: https://ycharts.com/indicators/bitcoin_transactions_per_day

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