Founder of crypto lender Celsius Network arrested, charged with fraud • Hacker News Board

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

#91

Post by zzzeek » Thu, Jul 13, 2023, 5:24 PM UTC

dcist wrote: post #34

jcranmer wrote: post #14

Journalists really need to link to court documents. Although in this situation, there does seem to be quite a few of them: US v Mashinsky: https://storage.courtlistener.com/recap/gov.uscourts.nysd.60... SEC v Celsius: https://storage.courtlistener.com/recap/gov.uscourts.nysd.60... FTC v Celsius: https://storage.courtlistener.com/recap/gov.uscourts.nysd.60... CFTC v Celsius: https://storage.courtlistener.com/recap/gov…

Thank you! I never understand why journalists don't link to court documents.

newspapers can't sell ads on a remote court document site

which leads to a great business idea, run a mirror that republishes legal / government documents in a syndicated fashion with [your ad here]

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

#92

Post by vorpalhex » Thu, Jul 13, 2023, 5:25 PM UTC

legitster wrote: post #90

vorpalhex wrote: post #86

Earlier quoted context omitted.

> Suddenly, anyone buying and selling them becomes a criminal. No, people buy and sell securities all the time. You simply need to follow the regulations for handling securities which includes certain types of tax and risk effort. If you keep selling securities while not following the KYC and tax stuff for those securities, you will in fact be breaking the law. Nor did the SEC magically throw down one day and start c…

The regulations for handling securities are through a brokerage. This is a HUGE deal because handling crypto through a brokerage would basically neuter it. Imagine trying to buy a pizza with Bitcoin, but you have to go into your Charles Schwab account and wait 3 days for the Bitcoin transaction to settle. In a brokerage system you would get the ownership stake aspect of crypto, but none of the transactional ones.

The settlement time on stocks is minutes. There is no requirement that brokerages are slow to settle. That is your brokerage choosing to be risk adverse.

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

#93

Post by smogcutter » Thu, Jul 13, 2023, 5:26 PM UTC

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…

> Tomorrow, the SEC decides that Pokémon cards are securities (far-fetched, but work with me here)

There’s a little bit of rhetorical sleight of hand here. It’s far fetched because the analogy isn’t actually very good. This isn’t hand waving a minor problem- why the SEC is calling crypto securities and not pokemon cards is the right at the heart of the issue.

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

#94

Post by bottlepalm » Thu, Jul 13, 2023, 5:26 PM UTC

angry_albatross wrote: post #59

bottlepalm wrote: post #51

Earlier quoted context omitted.

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.

The value will deflate at some point, it's kind of a mathematical certainty. We cannot extract more money from the system than we put in, since Bitcoin is a non-productive asset. It does not generate revenue the way that a business/company does. And someone has to pay for the electricity of the miners, so money is draining out of the system, making it a negative sum game that people are playing. I would also disagree…

Private as in independent of going through any bank or institution like you would have to do to move money internationally in any other form.

A store of value like gold, the dollar, or Bitcoin has nothing to do with generating revenue - only the intrinsic value of how hard is it to create more - dollars can be printed, a gold vein can be discovered tomorrow that would crash the price, Bitcoin on the other hand there's no chance of creating more than what's planned - which makes it a great store of value in turn valuable.

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

#95

Post by logicchains » Thu, Jul 13, 2023, 5:27 PM UTC

kayodelycaon wrote: post #71

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.

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

It's a matter of perspective. For many people around the world, the US government is the bad actor, the bad actor preventing them transferring funds through "normal" (US controlled) routes.

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

#96

Post by seanhunter » Thu, Jul 13, 2023, 5:27 PM UTC

legitster wrote: post #79

toomuchtodo wrote: post #4

"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.

I think you mean the SEC. That’s the agency here and yes, investor protection is part of the SEC’s mandate.

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

#97

Post by RetpolineDrama » Thu, Jul 13, 2023, 5:28 PM UTC

BlandDuck wrote: post #82

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…

I think the way to understand this is that the SEC is concerned about protecting unsophisticated regular folks from being scammed. If you started aggressively marketing your Pokemon cards, presenting them as financially sound investments, and regular people started putting their entire pension savings into them lured by false promises and being scammed, then the SEC might well take an interest in Pokemon cards as wel…

[flagged]

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

#98

Post by zzzeek » Thu, Jul 13, 2023, 5:29 PM UTC

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…

the endgame is clear, be one of the 99% of fraudsters that are never prosecuted

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

#99

Post by RC_ITR » Thu, Jul 13, 2023, 5:30 PM UTC

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…

Playing Devil's Advocate - The Pokémon card is a thing. I'm not buying it because I think it is a fungible asset that I can use to transact with (the thing I bought has a physical condition that can be graded, it is unique).

No one was collecting crypto to complete their collection, they were buying crypto (not caring even a little bit about which particular unique token they bought) because they thought it would be a useful tool in future monetary transactions.

The real crime here is US regulators thinking "commodities" was a fix-all solution for regulating crypto when you can eat most commodities, but not crypto (since again, If I buy orange juice futures from someone, they can't deliver me any oranges, they need to be edible and of a certain grade).

Now regulators have come to their senses, but in a really confusing and unfair way TBH.

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

#100

Post by kalverra » Thu, Jul 13, 2023, 5:30 PM UTC

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…

In the case of Celsius, this seems like one of those a case of starting with good intentions, but quickly turning into fraud city in desperate attempts to keep the boat afloat.

For the more run-of-the-mill crypto scammers, there's a combination of over-confidence that no one can touch them, or will bother to come after them. Or they just don't even think that far. For a lot of the bullshit influencer pump and dumps, the worst that's happened has been ZachXBT or Coffeezilla exposing your bullshit. Which is a good thing, but the influencer just pops back up with another get rich quick scheme in a couple months for a new group of rubes.