South African Brothers Vanish, and So Does $3.6B in Bitcoin Exit Scam
bloomberg.com
bloomberg.com
Then the wrong child becomes the leader of the family and and bam, they start reducing the silver weight and replacing the coins with cheaper metals and the entire trust in that coin disappears.
And that ignores issues like the Conquistadors coming back from the new world with literally tons of gold / silver and royally messing up the gold / silver coinage economy.
Which was preceded by the exact opposite problem in Europe:
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That's actually a plot point in an anime called Spice and Wolf[1]. I encourage anybody who has an interest in medieval economics and early capitalism to watch it.
Mr. Lawrence had a leg up on his rivals because he's the main character with practically a modern economics degree. So his ability to predict market trends and focus on important information is head-and-shoulders above everyone else.
Holo the Wise Wolf in contrast, is a minor, fictional pagan deity without much understanding of human culture. But her sharp wits gives her a lot of street smarts that stands above even Mr. Lawrence. It seems that she can control the yields of wheat fields to a certain degree, but since the recent invention of crop rotation and some fertilizers, her followers were no longer praying to her (and probably don't need her anymore). So she heads off with Mr. Lawrence (the first merchant to swing by after she decided to leave).
Holo serves as a good stand in for the audience as well: as Mr. Lawrence holds roughly 15+ different coins out and describes their relevant marketplaces, Holo of course gets bored of the discussion (much like the audience probably does).
Giving Mr. Lawrence "knowledge", while giving Holo "wisdom" allows the pair to balance each other out in their journeys. Especially since the basic plot of the show is "follow rumors to make money". Holo can accurately sniff out the truth out of rumors, while Lawrence can predict where the markets go once he's given the facts.
EDIT: In many ways, Holo serves as Watson while Lawrence serves as Sherlock in most situations. Lawrence explains the plans to make lots of money to Holo (much like Sherlock explains the situation to Watson, since Watson is the audience stand-in). But unlike Watson, Holo quickly catches onto the money-making game and is quite capable to changing the plan for the better. So its actually a very fun dynamic to watch the two. Just enough explanation from Lawrence, and just enough improv from Holo to keep things interesting, even though they're just buying and selling things throughout the show.
https://en.wikipedia.org/wiki/Wildcat_banking
It wasn't fiat money, they were deposit notes representing gold or silver. And while outright fraud wasn't much of an issue since physical banks can't just disappear and leave town overnight, if the bank collapsed the currency would probably not be redeemable anymore.
It was not fraud by the institutions as such, but counterfeits was a big problem with as many as 7000 unique notes it was next to impossible to know which was genuine.
Post the civil war as much as half the currency was estimated to be counterfeit. The secret service was given the policing money task as a direct result.
There was streamlining of currency issue after that.
The first banks would have dealt mostly with physical money / gold, so it would be a lot harder to pull off this kind of fraud.
Not if the government intervention is a smart contract. Why do we fear government intervention?
- (individual) errors - (individual) misconceptions - corruption ( individual incentives )
What if we had direct democracy and your case would be reviewed by every citizen? Would you still fear to be spyed upon? Would you fear to be detained without reason?
That's what Cryptography promises. A uncorruptable system which serves society with incentives correctly alligned.
1. education from their fellow salespeople is typically worse, like getting medical advice from a health-supplement vendor.
Simple or not, the current solution is far from perfect and will be reinvented and will fail again and again until a better solution emerges. There is no way that the current banking/government/democracy/economy system will survive this century.
Case in point:
https://en.wikipedia.org/wiki/Danske_Bank_money_laundering_s...
https://www.cnn.com/2021/01/21/europe/vatican-bank-money-lau...
https://www.justice.gov/opa/pr/bank-julius-baer-agrees-pay-m...
Find some recent example of the owners of a bank/exchange absconding with their client funds: that would be closer to the matter at hand.
But you’re right. Mostly the normal banks and exchanges are regulated and incidence of fraud is low. A lot of that regulation is “lessons from past failures”, which crypto hasn’t had yet.
Bank owner embezzles for awhile, bank robber shows up, publicly robs the bank, makes off with $1000, bank owner claims $10,000 was stolen. Bank owner now has a reason why he can't give everyone their money back.
Banks and municipalities who issued their own fiat currencies I believe encountered many more problems.
A lot of what's happening in the crypto space is just self-professed libertarians re-discovering fire. They start off by being skeptical of banks and monetary authorities, but eventually realize that an unregulated free-for-all attracts bad actors that ruin it for everyone else. Hence the wet blanket of AML + KYC + Deposit ratios.
https://www.afponline.org/publications-data-tools/reports/su...
Its just as large and just as consequence free as bitcoin/crypto heists and fraud despite the paper trail
Some reinforce their respect of one system by looking at the proportions of the money supply and transactions, I would say that isnt that important as the industry / interest in fraud has a fixed size
ACH fraud was 1% on 21 billion$. That's 210 million in total, way less than the 4 billion from the article with 1 Bitcoin scam ( of an exchange, again).
None of the ACH frauds were the exchange/bank running away with your money fyi.
And probably a lot of them, if end users, was even insured.
Edit: Sorry. Made a mistake corrected below by a comment and follow-up.
0,08% fraud on 51 T. Is still way less than this sole scam vs. BTC market cap.
21 Billion per year is close to the annual ACH transaction volume measured in count of transactions.
The total value of those transactions in dollars is somewhere over $50T (Trillion) dollars.
1% of that is $500B.
+ The number i found for fraud in ACH afterwards was actually 0,08 %
> ACH fraud is extremely low at 0.08 basis points, or 8 cents for every $10,000 in payments
https://silamoney.com/ach/understanding-the-basics-of-ach-fr...
I took the 1% from you, assuming you got it from somewhere reliable or at least that you believed in it. (I looked for it in the report summary; I didn't find it; I assumed you got it from the full report, which I don't have access to.)
If the correct figure is 0.08%, that's almost $41B on $51T (more now, as the network volume continues to grow).
But the entire fraud /year is way less percentage then this sole scam from the entire Bitcoin market cap valued against its peak.
So his comment is actually a net positive for traditional payments ( even if you neglect insurance, ... )
One one-hundredth (.01) of a percentage point. For example, eight percent is equal to 800 basis points.
https://www.investor.gov/introduction-investing/investing-ba....
The author of the article made the wrong calculation which makes this extra confusing. Ugh...
Since 8 basis points from 10 k is 8 => https://www.wolframalpha.com/input/?i=8+basis+points+of+1000...
Where are those numbers from?
> For example, eight percent is equal to 800 basis points.
Correct. 800 bp = 8% = 0.08 = 8e-2, as in your example there (different than the numbers in the linked article).
Also, 8 bp = 0.08% = 0.0008 = 8e-4, as in the numbers you gave at the top (different than the numbers in the linked article).
Also, 0.08 bp = 0.0008% = 0.000008 = 8e-6, as I’ve pointed out (and corresponding to the numbers in the linked article:
> ACH fraud is extremely low at 0.08 basis points, or 8 cents for every $10,000 in payments.
Note that 8 cents are $0.08.)
I checked it 2 times and always parsed it as 8bp... And not 0,08bp.
I feel embarrassed now. Nice job :p
ACH Fraud has also been going on for at least 20 years or so in similar amounts
Yes big bitcoin heist and no insurance for those victims of that exchange
Both true
Given Bitcoins track record, it wouldn't surprise me if some of the funds would belong to quite questionable characters, so you are basically stealing money from organized crime groups.
It is obvious that you can buy some protection with $3.6B, however your face and name is publicly known, meaning that you will be on the run for the rest of your life or possibly face a very gruesome death.
Is that really worth it?
Basically, life isnt worth living poor, or the current state of the world isnt worth being unable to change. Death is more favorable than skimming table scraps.
Although the luxury consumptive spending is a tiny portion of what is possible, and nobody can take those experiences away from you, the funds contributed to charities, political campaigns, and investments allow shaping the world as you see fit now.
So thats the explanation, without justifying it. Despite recent attempts of making society seem more fair, this has always been the history of the world. Seize and lock in a millennium of control and favor for your family.
https://www.coindesk.com/promoters-of-crypto-ponzi-scheme-on...
Generally I would assume that you might pull it of if: - you leave your home country and never come back - you cut all connections with friends / family - you spend a decent chunk of the proceeds on personal protection - you never talk about your previous life - you drastically change your appearance - you never travel and keep a very low profile (e.g. no Ferraris, no mansions, no superyachts)
But these are a lot of IFs and you might still slip.
You should also consider that some people will never forgive. Here [1] just a random news article about someone getting killed because of a dispute that happened 20 years before.
https://www.cbc.ca/news/canada/hamilton/revenge-doesn-t-have...
That combination was sort of inevitable.
There are many custodial solutions that offer access to those products
Many people have no clue about the difference between custodial and noncustodial solutions
And even if they are aware, it then becomes impossible to discern which custodial solution is more legitimate or has more assurances of security
(Or, if there is such a product and you have access to it, let me send you a dollar, and you give me the US GDP in a year and keep the other 49 US GDPs for yourself for services rendered).
If you dont understand that market then you will keep adding irrelevant conditions
None of the crypto products offer those yields for very long, there are enough different products that capital can keep moving between them to sustain a given rate to investors
Whatever is being offered - from the legitimate services - is not different than what banks had been doing with customer deposits
Like I said, WHY people pile into any particular custodial solution is because they cant or don't want to discern
If you want to debate about the skepticism that should have been lobbed at a compounding version it doesnt add anything to the discussion
Outside of crypto nowhere is offering 10% on anything over really any time period, inside of crypto services are offering 1000% of percent briefly with any managed solution being able to give 10% comfortably, it would be easy to make slightly more enticing accounting and easy for an investor to not be able to discern which tweak is the bad one. Many people also just like high yield investment schemes and plan to get out before the mathematical impossibility rears itself
and
While South Africa’s Finance Sector Conduct Authority is also looking into Africrypt, it is currently prohibited from launching a formal investigation because crypto assets are not legally considered financial products, according to the regulator’s head of enforcement, Brandon Topham. The police have not yet responded to a request for comment.
$3.6B is 1% of South Africa's GDP. That's a lot of money.
Could be down 40% or more by now. GDP isn't nearly as volatile.
$3.6B = ZAR51.17B (xe.com). That seems like a lot of savings for the small upper/middle class.
The name of the crypto company "afri" suggests it might have targeted the African market as a whole.
Can any Africans/South Africans explain how ZAR51.17B of savings accumulated in this crypto company(or scam)?
Is it like Madoff who conned rich people or did these guys manage to reach pensioners and steal their money too?
[1] https://www.goodthingsguy.com/opinion/perspective-salary-sou...
The figure is slightly inflated as it’s the value at Bitcoin’s high earlier this year, but it’s still a lot.
My theory is lots of international customers as I don’t see our market being big enough, thumb sucking, but I reckon 2/3 of our country earns less than 500USD a month. Maybe their customers are from other African countries, but it feels unlikely to be enough.
Perhaps they had some “whale” clientele from several different countries.
I wouldn’t personally think the “Afri” in their name is particularly meaningful, it’s just a naming thing, but maybe some people treat it differently.
Heck, the kleptocratic president and his party was robbing the country for a better decade.
Need someone with context knowledge, but I suppose the name suggests it could also have been targeting Afrikaners in South Africa (ex. "AfriForum"[0])
If anything it associates it with Africa and Afrikaaners (like most people of European descent here) identify more as European residents of South Africa, rather than as African. To make clear, Caucasians here will refer to themselves as South African, but not as just African. If someone on the internet told me they were African, (and not in a bad way) I would assume they are of dark colour.
As someone who used to cross the "Boerewors curtain" daily, interacting with people on both sides, I think you're severely understating how distinct the Afrikaaner identity is, and how (most) Afrikaaners see themselves as having a different heritage from other people of "European descent".
> If someone on the internet told me they were African, (and not in a bad way) I would assume they are of dark colour.
Maybe that's because the former government (that one) used "African" as a race, an not as a geography-based identity: one could be "White", "Colored", "Asian" or "African"
That doesn't make any sense to me if bitcoin is truly a trustable public ledger.
Someone laundering a small amount of money probably won't get that much effort but $3.6B is a much harder problem because it's an unusually amount of money to launder and it's enough to get law enforcement involved. It's not inconceivable to image _everyone_ receiving bitcoin traceable back to the tumbler being asked to prove that they weren't involved. That factor limits the total volume going through a tumbler and increases the cost since everyone using it is risking being targeted as an accessory.
Seems like many users are tumbling their personal-use-quantity drug bitcoins for bitcoins from crimes with much more LEO/regulatory oversight - like money laundering (and increasingly ransomware).
I wonder how many people have gotten a knock on the door by the Secret Service and found their risk mitigation strategy actually painted a bigger target on their backs.
Even if you love the concept and want to see it succeed, that's a big deterrent unless you love litigation and are confident that it won't be a SWAT raid.
In the end, after all mixing, you want to land it on some off-ramp to cash. And you want not a dollar, but significant sum.
In any case, there’s a big difference between “needing a middleman” to do something and leaving your funds with a middleman indefinitely. That’s like needing to use a taxi and paying with cash versus leaving your life savings with the taxi person so some day when you maybe want to use a taxi it’ll be easier.
2. Bitcoin is very confusing and hard to learn about. But buying from an exchange makes it easy for normal people.
My point is I would rather have a team of people paid to make sure that post-it note doesn't get lost than try to keep it myself.
I mean just to document and warn new comers.
It seems we already forgot about mtgow.
Literally the dream of the evil execs in Ready Player One, "75% screen coverage for ads before inducing epilepsy".
That isn't helpful on mobile Chrome, but that's why I only use Firefox on mobile.
Is it an old phone that hasn't been updated in years or a recent one?
I'm braving the onslaught of HN downvotes because I really hope that someone will suggest a solution to my problem. I really want to help my father use his iPhone.
No idea what the official settings looks like or where I would find what I wanted. No idea what the quickest ways to navigate the ui are. Just pages and pages of icons to scroll through. Multiple of which were called some variant of “settings”. Many of which were dodgy phone tuning apps she’d downloaded then Android and her phones manufacturer both had their own.
It’s not an iPhone or Android thing it’s an unfamiliar phone messed with by a tech illiterate thing.
FYI fastest way to get to settings or anything on iOS is to pull down in the middle of the screen. A search bar will come up and by the time you’ve typed “se” in to it settings should be the first result.
Works for contacts, calendar appointments, etc as well. It’s a solid choice for first thing you try when looking for basically anything.
If you're on any of the Home Screens (icons), you can swipe down in the middle of the screen to pull up Search, which you can use to more quickly get to settings rather than trying to scroll though apps to find it. Alternatively, you can put the Settings icon in the "app tray" that's on every Home Screen, rather than whatever the defaults are.
Settings also has a semi-hidden search mode, which you can get to if you swipe down in Settings (scroll all the way to the top).
Finally, "Control Center" has a Hearing control you can add -- I'm not sure if this integrates with the hearing aids, but it might let you have a much faster way to get to the specific settings if that's compatible.
Their problems always boil down to the fact that all app settings can only be accessed by going into the system settings, scrolling through all of them to find the app you want and taking it from there. To make it worse, sometimes an app setting will be hidden away under another nested system setting and there's no way to know this without googling.
So frustrating. I see the "user friendliness" of IOS touted all the time but IMO, functionality is so well hidden from the user that they end up accepting and settling for Apple defaults.
The only advise I can give you is to teach your father how to use google to find out how to do stuff on his phone when he gets stuck.
Ageism isn't cool, bud.
Edit: this does not appear to be as simple as I'd hope on ios 14.
Edit2: it is that simple if you follow the directions (set URL) Then second step (open URL) instead of winging it like a 1337 programmy dude.
I'm guessing since it's a hearing device, it should be a simple pull down and search for "MFi hearing device" or "Hearing Devices" which will instantly take you to that settings.
That said, learning how to find the exact settings the first time around is going to require a learning curve.
The back buttons should always be in the top left when they're available. There is also a gesture; you can swipe in from the left side of the screen to go back. There's an accessibility setting to make the buttons underlined, too [2].
[0] https://support.apple.com/guide/iphone/use-and-customize-con...
[1] https://support.apple.com/en-us/HT208204
[2] https://9to5mac.com/2018/05/25/how-to-go-back-on-iphone/
Product coolness, usability, reliability, value, and customer service have all fallen off a cliff in the search for more money.
I know you can mess around with custom ROMs and all that to get more life out of Android phones, but now that I work full time I just don't really have the patience to be constantly tweaking things to have my phone work pretty well. It's actually kind of weird that I'm in this position because I used to be all about customization and huge into the Jailbreak/Rooting scenes.
Teasing 20K by the weekend...
Deposit your BTC for safekeeping today!
Somebody close to me put some money on bitcoins. I told him to get a wallet and move the coins to the wallet where he is in control of they keys. This person only has a Chromebook as a computer.
Does anybody have any recommendations of a software wallet for a Chromebook?