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Crypto brothers front-ran the front-runners

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Re: Crypto brothers front-ran the front-runners

#71

Post by paxys »

b0r3datw0rk wrote: post #51
Electricniko wrote: post #46

I feel like the people who wonder why this is a crime are missing something pretty important: this isn't the SEC attempting to regulate a crypto market by prosecuting securities fraud, it's the DOJ prosecuting straight-up old fashioned fraud. The crime is changing the terms of the transaction within the 12 second time frame after it had begun but before it had finished, and ultimately selling something different than…

how is the blockchain under the purview of the us govt? these were transactions submitted to a blockchain created for the sole purpose of not being controlled by the government all these code is law folks are constantly exposed as just looking to get rich quick

All fraud conducted in the US or related to the US in any way is under the purview of the US government. The specifics of how it was done doesn't really matter.

Re: Crypto brothers front-ran the front-runners

#72

Post by otterley »

tcbawo wrote: post #52
dheera wrote: post #38

Earlier quoted context omitted.

TFA: "They worry that this microsecond-scale competition between algorithms is socially wasteful" I would LOVE to see a stock market that (a) time-penalizes large orders -- 1 share trades in a microsecond, 10000 shares takes a week to execute OR (b) adds a random time delay to all orders in the range of [0,60] minutes for corporations, [0,10] minutes for residential traders, and [0,1] minutes for people who have prov…

> people who have provably low income You want to give all your financial info to your brokerage? What increasing latency will do is widen the markets. We’ll go back to the days of multiple cents or dollars between the bid and offer prices of stocks. It will definitely increase the time horizon to make an investment profitable. But maybe that’s a societal good for some people… In the modern era, adding a speed bump m…

> You want to give all your financial info to your brokerage?

You have little choice anyway. Once you give them your identification, which is required by KYC laws, it's a small matter of getting your financial information from the data brokers who possess it.

Re: Crypto brothers front-ran the front-runners

#73

Post by voakbasda »

aj3 wrote: post #62
Electricniko wrote: post #46

I feel like the people who wonder why this is a crime are missing something pretty important: this isn't the SEC attempting to regulate a crypto market by prosecuting securities fraud, it's the DOJ prosecuting straight-up old fashioned fraud. The crime is changing the terms of the transaction within the 12 second time frame after it had begun but before it had finished, and ultimately selling something different than…

But you're not signing EULA's in order to participate in the network. Moreover, there are no real "laws / regulations" within the network either, specifying what you are or are not allowed to do. Ethereum standards merely determine how the software is supposed to work, but even then I'm sure Ethereum devs would oppose treating their docs as an agreement (because they don't offer any warranty, licensing or attestation…

> asking for a sudden government oversight in the system that was built with the express goal of not requiring any government oversight.

Clearly, it has failed at that goal. This should not be surprising in the slightest.

Government gunna govern.

Re: Crypto brothers front-ran the front-runners

#74

Post by baobun »

resolutebat wrote: post #47

A (very) technical explanation of the attack: https://collective.flashbots.net/t/post-mortem-april-3rd-202... @scrlk summed it up: MEV bots sandwich attacking traders = okay MEV bots sandwich attacking other MEV bots = fraud

> In particular, the malicious proposer constructed their own block that broke the sandwich bots’ sandwiches up and effectively stole their money.

Deep cognitive disonnance or do these people really think they have enshrined privilege now?

Re: Crypto brothers front-ran the front-runners

#75

Post by lmm »

mrguyorama wrote: post #34
AlexandrB wrote: post #8

Earlier quoted context omitted.

"Code is law" was always just marketing. For example the original "DAO" had buggy code that allowed malicious actors to take money from the wealthy early investors. Suddenly "code is law" went out the window and the Ethereum chain was forked to get the investors their money back[1]. [1] https://www.gemini.com/cryptopedia/the-dao-hack-makerdao#sec...

Also, much more relevant than a bunch of hucksters showing that they care more about money than ideology, The DOJ doesn't GAF what you say, they care what the laws are. Tokens are property. They technically gain all the standard property protections, like people aren't supposed to steal them from you, and fraud is still fraud. If you want code to be law, you would have to pass legislation to that effect, and good luc…

> Tokens are property

Why/how? If someone "steals" "my" "property" in an online game, I don't get to call the real-world cops on them. Why should it be any different when you dress up your game in a bunch of finance words?

Re: Crypto brothers front-ran the front-runners

#76

Post by burningChrome »

paulryanrogers wrote: post #61
tmn wrote: post #57

Earlier quoted context omitted.

The government believes it’s entitled to taxes on the usd value of any acquired digital coins/tokens. I’d have more sympathy to your perspective if this wasn’t the case (although I’m still sympathetic)

My guess is the government is trying to disincentivize tax evasion and money laundering.

Its technically not tax evasion until they don't pay taxes on it, right? All they did was usurp people who were already cheating. If they were really concerned about tax evasion and money laundering, the feds could've just opened a case, assigned a few agents to it and then waited. They knew who did it, how they did it and still went after them before any real crime had been committed.

Re: Crypto brothers front-ran the front-runners

#78

Post by nativeit »

smeej wrote: post #28

$28M of somebody else's money seems like a small price to pay for securing enough attention to either address the situation that made this possible, or create a new market in it to close the arbitrage gap...and this is especially true when the "somebody else" got that money in shady-but-not-illegal ways in the first place. It's like the bug bounty system is built into the code.

Let's hope federal prison sentences for bounty hunters and full restitution of the bounty itself doesn't become a hallmark feature of other bug bounty schemes.

Re: Crypto brothers front-ran the front-runners

#79

Post by OutOfHere »

aj3 wrote: post #70
OutOfHere wrote: post #59

Earlier quoted context omitted.

The MEV bots had a protocol that they were expected to follow. These two guys were running a secret cluster of their own bots that strongly violated the expected protocol.

The strategy that MEV bots use is not a law. It is not even defined or endorsed by Ethereum standards, and arguably is not an intended feature of the network. You could alternatively claim that the guys defined their own protocol which addressed market inefficiency (which MEV is). Imo it's insane to claim that a trading technique you invented should have zero risk, and any losses you take are an indication of theft.

To my knowledge, the imprecision of the CFAA is sufficient to prosecute them.
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