This individual stealing people's money sheds light on how regulations exist for a reason, especially when handling billions of USD. Doesn't really speak positively or poorly on cryptocurrency as a technology though.
The main crypto part is that it's the person who dictated the upcoming crypto exchange legislation.
That corrupt CEO was greasing politicians (to the tune of $40m), was using an ex-CFTC commissioner to lobby a law regulating exchanges (which, by chance, would have made FTX legal and Binance and decentralized exchanges illegal) --ex-CFTC commissioner who just deleted his Twitter account by the way--, had nomimated has CEO of his Alameda Research fund the daughter of a colleague of the SEC's chair, etc.
Here what a US congressman has to say about the SEC's chair:
Interesting. @GaryGensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We're looking into this.
Interesting indeed.
There's much more to this story than: "we fucked up using leverage so we used a shitcoin of our creation as collateral to hide billions in losses".
We're potentially talking about a little cabal trying to regulatory capture the cryptocurrency exchange market very likely with the intent to run an ever bigger scam.
"had nomimated has CEO of his Alameda Research fund the daughter of a colleague of the SEC's chair, etc."
do you have a link ?
A big argument against cryptocurrency was that those governments and institutions had developed financial oversight for a reason.
History and contemporary geopolitics are both littered with examples of governments that absolutely ruin their population’s lives with currency problems. What if it were possible to have consumer protection regulation and also remove some of the nasty side effects of government and institutional preference in monetary policy?
However, the rest of us have a name for "bypassing government regulations" - we call it "crime".
> What if it were possible to have consumer protection regulation and also remove some of the nasty side effects of government and institutional preference in monetary policy?
"Crime, with extra steps".
Yeah, like hiding Jews during Holocaust was a capital offense. Pretty dumb argument.
Pretty impressive, I'd say.
They didn't refute the argument. They treated "crime" and "wrong" as an implication, and my Godwin invocation fits well to show it is absurd.
I don’t think that’s what we call crime. Isn’t crime the direct violation of government regulations?
By your argument, the use of _any_ currency other than your own government’s would be a crime. Or, is the use of every currency a crime in every other country? When I exchange Euros for JPY in the US, have I committed a crime?
As far as I’m aware, there are no laws against the use of cryptocurrency. There are plenty of laws against things like securities fraud and fraud in general, and those are all generally well and good.
> Some governments have been financially irresponsible in the past, so we need a tool to allow us to bypass all government regulations
I think you should probably gain a clearer understanding of how the currency markets have been behaving over the last year. Many currencies have lost >30% of their value against the USD (which might not matter so much if the USD were the same status as the others).
FTX had both a US and offshore location. US regulations do not apply to offshore entities.
SBF's parents are financial compliance lawyers and Standord professors. His dad has gone in front of Congress to argue for various tax and compliance regulations. What SBF did was criminal fraud, and he was equipped with world class compliance advice and yet here we are. A brazen theft of billions of dollars by a risk-addicted, self-delusional altruist.
Technology doesn't exist in a vacuum though, and the fact that so much of the ecosystem that sprung up around crypto is rotten is a hint that maybe the technology isn't all that useful. Crypto's nominal reason to exist is to have a way to transact without government oversight, but its popularity is due mostly to speculation and outright scams enabled by said lack of oversight.
Banking regulations exist to counterbalance the personal incentive to abuse any authority you have and take off which what you can take.
In the absence of regulations, everyone does exactly that... eventually.
Even with regulation we probably all have our number, our price.
It seems they are learning the same lesson as the OG computer nerd power users: nontechnical people suck and they ruin everything for everyone. Making crypto easy-to-use was the beginning of its downfall.
This is a naive conclusion to reach. "Non-technical" people are very much the reason that those who transact strictly in digital products and services can survive, not the other way around.
Centralized institutions exist because the establishment of trust is essential to even the most basic of human societies. Yes, they can be abused to corrupt ends, but crypto clearly has the same problems, with the malfeasance often committed by "technical people" themselves.
Yes the world would look dramatically different, it'd be more IRC/P2P than Slack/Youtube. But it would be a much better world where users are in control, and can do advanced things after skilling up in the appropriate area. I think that what is happening with Mastodon is a good example of what happens when the mainstream gets its hands on something that maybe it should learn about first.
And the thing is, anyone can become technical. They just need to cross that knowledge barrier to entry. But our society, in all its dysfunctional ineptitude, has decided that this is "inaccessible," and that is evil because everyone should be able to fuck up everything at every time. Yet somehow the guilds of doctors and lawyers and engineers (and drivers of cars!) carry on.