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Comment by camjohnson26 | Hacker News Reader

By the numbers, around $34 million in funds is affected, mostly Ethereum. They say in the press release that they prevented most of the unauthorized withdrawals and reimbursed the remainder, but it’s unclear how much they had to pay for reimbursements.

For context, this is the startup that has been using Matt Damon as it’s face.

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> For context, this is the startup that has been using Matt Damon as it’s face.

They're also notable lately for getting the naming rights to the (former) Staples Center.

> https://en.wikipedia.org/wiki/Crypto.com_Arena

I wouldn't call it a startup, it paid 700mil$ to rename an arena!

Technically, they agreed to pay $700M over 20 years for arena naming rights -- no idea what the deal actually looks like but if you flat-line it, they're "only" paying $35M/year. Which is still a ton of money but much more reasonable in terms of cash out the door for a startup.

I hope this doesn't mean we have to endure 20 years of this name on the nba court. With all this gambling (sports betting) sponsoring of the NBA and now these crypto sponsors, it really does look like the NBA has sold out (also new trikot sponsor deals). It's a shame how much they feast on hooking impressionable men on gambling. Actually, thinking about it, there should be more ads for f2p/mobile games, would fit perfectly in this portfolio. (sorry for this rant but it really disturbs me and I hope I'm not the only one)

You'll have to endure it if you believe that Crypto.com will exist 20 years from now. I'd bet even money they won't exist in 5 years and the court is renamed in ~3 years.

I mostly agree on the gambling front too - gambling was bad enough when you had to lure people to a casino but at least that gave them the excuse of "It's my form of entertainment, it's like going to a nightclub."

"The best minds of my generation are thinking about how to make people click ads" -- not any more! Now they're trying to find the shortest distance between users' wallets and their RSUs. On the plus side, they can use all of the targeting and persuasion techniques that have been used to make TikTok/Instagram so addictive on directly separating users from their money. Forget selling a product!

> I'd bet even money they won't exist in 5 years and the court is renamed in ~3 years.

For some historic context, Enron Field lasted two seasons and CMGI Field less than one, from what I can tell? I wonder who holds the record.

Sports business has always loved sports betting. What you are seeing now is relaxed regulation and new tech that routes around existing regulation.

Venture capital used to be about placing small, diverse bets on a lot promising startups - everybody in the process was trying to make the world a better place

Since about 2018, VC game changed - now it's about brazenly placing massive bets on a small set of startups of increasingly questionable utility, using the funds and clout to ram their way through into monopoly positions. Not a speck of morality involved anymore - and nobody is even trying to pretend otherwise

Public image hasn't yet caught up with this reality

It feels like a bubble to me. When I see Matt Damon shilling crypto, it reminds me of pets.com Superbowl ads. I think reality will catch up sooner or later.

I owned shares in a teak plantation in the late 1990s. We make mistakes when blinded by greed.

>everybody in the process was trying to make the world a better place

I think "everybody" here is a pretty substantial overstatement. Plenty of folks were just trying to make money, without much regard for whether it made the world better or worse.

CryptoPets.com incoming!

> everybody in the process was trying to make the world a better place

have you actually met any VCs?

I laughed out loud when I read that statement. Holy moly the delusion is strong.

we don’t know if CDC funding is VC

It's irrelevant what the funding comes from or how you define it. VC, PE and Hedge funds all have fairly loose definitions. But, someone is funding it because it sure ain't coming from profits.

what’s your analysis on their profits

Since no one really knows how to define a "startup" then this whole discussion is basically moot.

https://news.ycombinator.com/item?id=11162052

Having been around on the first dotcom boom, renaming an arena is an extremely startup thing to do if you've raised a huge amount of money.

They took out huge ads in Vegas for re:invent. Personally that set my alarm bells off pretty badly.

Yeah, seeing huge marketing spend by an organisation that's not a massive brand with deep pockets always makes me wonder where the money is coming from

they are already making a huge amount from spread etc.

They also have high-visibility ads in F1: https://www.formula1.com/en/latest/article.formula-1-announc...

I doubt it's very cheap to advertise in F1. You need to outbid large competitors.

The numbers match with the chain activity: https://twitter.com/ErgoBTC/status/1483540849434763264

Presumably they mostly stole ETH because tornado cash is the best mixer around to launder stolen funds

I assume they stole just anything they got.

I'd assume any attacker would at least transfer everything to a BTC/whatever address generated offline, then figure out later how to launder it.

I'd love to read more about these money laundering operations like Tornado Cash. Are they just straight up 100% fraud companies? Do they have any pretense of a legitimate use case or does everyone just understand they're used for criminal activity? Are they regulated at all? I assume you have to trust your magic beans to them at some point; do the money launderers sometimes just steal them? What do they charge for their service?

tornado.cash is a legitimate service, that happens to be used by hackers that steal ethereum.

Check out their code on github.

That's a pretty funny definition of "legitimate". By that standard, all of this malware is legitimate too! https://github.com/ytisf/theZoo

I'm sure someone can come up with some legitimate use for those. We came up with 'Linux isos' for torrents after all

How is it different from “TOR/some VPN is a legitimate service that happens to be used by some hackers to cover their tracks”?

How many legitimate uses can you name for TOR? And how many can you name for a money laundering service?

If you don't need financial privacy can you please post your bank statement here for everyone to see?

That's quite an evasion of the question. Yet more evidence that there's approximately no legitimate use.

But I'm on record as being in favor of full financial transparency for everybody. Every charge, every bank statement. Money, after all, is inherently social. And full transparency, while causing some problems, would eliminate a ton of others. So if you can get a legislator to submit a bill, I'll happy call them up to back it.

I wonder what percentage of their total volume it is that “happens” to be used by hackers.

People who are not criminals deserve transaction privacy, as well.

What would be the point of "transaction privacy"?

Odd statement. It is on par that all your bank statement should be public and easily viewable. It is on par saying that people do need digital privacy at all, as they have nothing to hide. And those are trying to hide are really 'bad people'. Monero/Zcash/Dash/Firo/etc are used by legitimate users to hide their transactions from public blockchain.

Your bank statement is not private, your bank has it. You can pay with cash, but the other customers can see you right there paying, so that's not private either. I understand the need for private communications, but private transactions don't seem to make a lot of sense.

To avoid getting kidnapped and tortured because your crypto portfolio is visible to everyone?

There are plenty of examples of that: https://github.com/jlopp/physical-bitcoin-attacks

Haha tell that to the IRS they'd love it.

Tornado Cash is a smart contract system that allows you to send fixed denominations of Ethereum, and receive a cryptographic "note" that allows someone who knows the note to withdraw the same amount of Ethereum from the smart contract.

Since zero-knowledge cryptography is used to ensure the generated note cannot be linked to the depositing transaction, it can be used to send money to yourself or another person without revealing the identity of the sender. There are criminal and non-criminal reasons to do this.

Because it is a smart contract system, you do not have to trust a person or organization with the money. You do have to trust the smart contracts defining the system are correct. The smart contracts are publicly available to read and have been reviewed by many people, including software audit organizations.

Interesting! I’m surprised the regulated exchanges don’t blacklist coins connected to that smartcontract because of the ease of facilitating laundering.

Since all crypto on smart contract platforms tumbles around in defi and the various decentralized exchanges all the time, this would effectively prevent anyone from depositing their crypto to those exchanges, which would make the exchange unusable.

To expand on that, say someone withdraws ETH from Tornado cash and purchases an NFT with it. The seller of the NFT then swaps their ETH for USDC on a decentralized exchange (the ETH then goes into a pool). Later, a liquidity provider to the ETH/USDC pool withdraws liquidity from that pool, and sends their ETH to an exchange, let's say Binance. If Binance blocked such deposits (and especially if they did so without refunding the user on-chain), no one would use Binance, and they'd also be the target of a lot of lawsuits.

It requires users to pay gas fees when making deposits, as well as for the services that "obfuscate" the withdrawals. Thats the payment. You trust that the nodes will obfuscate the transactions to receive the fees. The rest is basic smart contracts execution.

The compliance topic is tricky and deceptive. Only the user with a "Note" is able to link deposit and withdrawal. With this note the user can generate a proof of origin. This makes tornado cash compliant enough.

E.G. If the withdrawal address is under Money laundry suspicion, it may be urged to provide the origin of the transaction. That is possible [1] but there is no way of a 3rd party to Tag an account as "suspicious" based on the Tornado chain information (due to the obfuscation done by the Nodes that are getting the fees).

As far as I understand there is no accountability. The regulators would have to persecute all the nodes for helping out with the laundry. But there is no way for the nodes to know they're participating in laundry. So they cant be persecuted. Regulations needs to be invented for this kind of schema.

Please someone correct me if I said anything wrong. Im not an expert is just my conclusion based on some reading.

[1]: https://tornadocash.eth.link/compliance/

So does that make Crypto.com the equivalent of Teddy "KGB" and the $34 million a lot more stacks of high society?

A couple of years ago crypto.com used Matt Blaze as its face :P

https://web.archive.org/web/20170611024100/http://www.crypto...

Ad even earlier started out with MCO as their iconic token, then shifted to a new crypto while leaving early stakeholders in the dark. Those early maneuvers were something of a red flag.

Yep when I found out this was Monaco Coin guy rebranded, everything Crypto.com does started making a lot more sense.

https://www.cryptovantage.com/news/opinion-the-crypto-com-mc...

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