FTX collapse, Tether operations have links to online-poker cheating scandals
poker.org
poker.org
All while FTX had a Chief Regulatory Officer who was basically a career white-collar criminal. It beggars belief that anyone who dug half an inch into this story wouldn't have seen 90,000 watt flashing red warning signs.
Crypto turned into a haven for replaying every form of financial fraud ever invented on an epic speedrun against retail "investors", and a whole lot of powerful people and institutions have dirty hands. The idea all of this could be adequately explained by stupidity rather than malice strains credulity.
https://www.nytimes.com/2022/05/14/business/sam-bankman-frie...
The Chinese banned it. Unfortunately Americans genuinely believe they are above corruption.
(I think it works this way across the anglosphere, not just America. The average Briton can't bribe the average British cop, but their royals/etc certainly pay to make crimes go away.)
The NYT is in the "providing content to lure people to advertisers" business. They don't sell ads to third parties. They could be very symbiotic with Google, for example. If Google was searching their content, bringing readers in, and supplying ads. But, instead, Google scrapes their content and helps people never visit their site at all.
What does that mean? The NYT sells ads, i.e. you can pay the NYT to have your advertisement shown in the NYT. Google sells ads, i.e. you can pay Google to have your advertisement shown in Google results. The NYT and Google sell the same thing. They are competitors.
In fact, the NYT outsources their ads to Amazon's advertising business.
[0]: https://www.sec.gov/Archives/edgar/data/1652044/000165204422...
I don't think they did.
To check my memory, I clicked on to the "Cryptocurrency" keyword to see the crypto-related stories going back. It's mostly reporting news (which is mainly bad) and skepticism.
Is the next crypto narrative is going to be "why didn't the media save us?" I guess it makes about as much sense as all the previous crypto narratives.
Anyone else remember those folks who suddenly realized climate change was actually happening and immediately started whining about how the media failed to tell them?
People failing to think critically about how media works while simultaneously whining about how the media works will never cease to amuse me. It is almost exactly like taking a bus to the end of the line and then yelling at the driver for taking you there.
> The laughter has faded. Over the last few days, the collapse of a so-called stablecoin called TerraUSD has sent the crypto market into meltdown, accelerating a dramatic sell-off that tanked the price of Bitcoin and Ether, the two most valuable cryptocurrencies. At Baha Mar, Mr. Bankman-Fried was throwing a giant party for the industry; this past week, he was attempting to restore calm, tweeting long threads about the state of the market.
Then discussing how his awkward, unkempt appearance is actually calculated and intentional. And look at the final paragraph:
> Outside, the convention center was emptying, as hundreds of crypto enthusiasts headed for the airport. It was the calm before the coming meltdown. To leave the resort, guests had to walk through the Baha Mar casino, the largest in the Caribbean, a brightly lit hall of flashing slot machines.
The whole thing is framed around this guy hanging out with celebrities and lobbying government officials while his market crashes. Reading it for the first time 6 months after it was written, I think it holds up as an accurate profile with a bit of foreshadowing of what was to come.
Un fucking believable.
1. "yeah absolutely could pull it off without my math degree I use very little math" - given that her position is a CEO (ie. leadership), it seems plausible that she doesn't use her math degree in the day to day. Also, the clip has zero context as to what the question actually was.
2. "being comfortable with risk is very important" - Would you rather have a hedge fund CEO that's not comfortable with risk?
3. "we tend not to have things like stop losses I think those aren't necessarily great risk management tool" - ...which is true. Stop losses are basically market orders that get placed when the price drops below a certain amount. It's true that they can stop losses, but it could also lead you to sell at the bottom and at the worst price.
4. "trying to think of a good example of a trade where I've lost a ton of money um well I don't know I probably don't want to go into specifics too much with" - This is one of these questions where you need to have a prepared answer for, because answering it any any honest/unprepared way would make you look bad. The closest real life example would be something "what is your greatest weakness" or "what was the biggest fuck up in your last job". Obviously she didn't have one prepared, hence the response.
Worse, in relatively illquid (and circuit breakerless) markets like the fringe cryptocurrencies they were investing in, stop losses can easily result in selling at absurd prices and can even be manipulated to do so. There was even a lawsuit against FTX for exploiting them.
E.g. say something is trading at $105 after falling a bit and you believe there are significant stop loss orders at $100 (perhaps aided by exchange insider knoweldege), you see that there is very little volume on the order book below $100. You then put in a huge buy wall at $10... sell down to $100 to trigger the stop losses, then laugh as idiotic stop losses dump coins into your $10 wall.
Moments later the asset is trading at $101 again.
In large liquid markets they're less risky because someone will usually hop up and take the deal at $99 so even though you get burned a little it usually won't be too bad. But cryptocurrency markets, particularly for the fringe scamcoins FTX was investing in are just not very liquid.
It seems to me that you need to have a stop loss to prevent blowing up when you have leverage. This sounds like one of those strategies that might work most of the time, but will eventually lead to bankruptcy, like picking up pennies in front of a bulldozer.
I haven't read Mark Spitznagel's latest book, but it's all about problems like this.
It also suggests that this hedge fund was run by amateurs that hadn't learnt the lessons of other overleveraged funds like LTCM.
It's hard to tell if the media has gotten worse at their jobs or they've always been this bad and I'm just getting older. There are plenty of earlier scams and bubbles (Enron, dot-com bubble) that slipped under the radar until thing went to shit, so I suspect the latter.
Serious investigative reporters with the smarts and experience to dive deep were always the exception, maybe a handful in the world at any given time.
So IMO, “they’ve always been this bad” is the answer, but it’s not entirely fair. Kind of like saying the cooks at McDonald’s have always been this bad; in fact it has never been their job to do world-class work.
Sounds like the "Yuppie Nuremberg Defense" from Thank You For Smoking, in which a tobacco lobbyist excuses himself by saying he has a mortgage to pay.
Anybody who took money from these people is not a victim.
Yes. Being discussed now on HN: https://news.ycombinator.com/item?id=33593234
> And more generally, how do you square this stance with the near universal HN view that tech coverage is too biased against tech companies?
Cynically, they give negative coverage by default to encourage "charitable giving". When the org starts "donating" money to journalists, the tone of the coverage flips.
It's not a "defense", it's just reality. When it snows, do you say that sounds like the "triple point defense" of frozen water?
People are by and large fallible. I am. And we're wired to prioritize our immediate family over nebulous ideas like The World Must Know The Truth. I am full of nothing but admiration if you are the rare exception who is doing only the most principled of things, with complete confidence that everyone you work for is upright, and that you have optimized your labor to produce the most good for the world in general, not just you and yours.
But I honestly don't blame those "Yuppie Nuremberg" people, and if you see shallow news reporting as the moral equivalent of lobbying for tobacco, I can't really disagree. I just don't have the energy to pass moral judgment on everyone, so I'm content with understanding the phenomenon.
Why would they bother with it when what they're doing is way more profitable? They also have a reputation for being the partisan press. They'd have to completely rebrand to get into a less lucrative area.
And if it is mentioned, it is dismissed as misinformation, like Hunter Biden's laptop.
The long form journalism that the partisan press produces, both sides here, amounts to little more than fan service. It's incapable of investigating things out of public interest without it relating to their kayfabe. MSNBC can produce thousands of hours about Trump/Russia, but the for the Snowden leaks you get a few seconds of a professional talking head, who had to take off his lanyard with his CAC right before taping, telling you how Snowden is a bad man.
The WSJ on the other hand has excellent investigative journalism which is usually well separated from conservative partisan commentary - see Carreyrou as a good example.
There is, but if you're ever exposed to it it's probably in the context of brutal point-by-point debunking. On account of how it tends to be hilariously bad. Like that recent Mules "documentary" from D'Souza, or various Sinclair must-run pieces. Typically they're just very-slanted advocacy masquerading as investigative reporting. Or they take the form of popular opinion-jockeys running special "exposé" episodes that are also mostly or entirely easily-dismissed-with-public-info BS. Collectively, these seem to sate the conservative demand for conservative-flavored investigative journalism, and are all much cheaper than doing actual investigation, especially since you'll always find something to "expose" and there are never any dead-ends wasting time and money (since there's no need for actual substance behind the whole exercise).
If you mean from actual newsrooms, sure, those don't do much investigative reporting, but then there aren't a lot of conservative newsrooms. And it's not like the non-conservatives ones do much, either, with a few exceptions.
They're often good material. But they are way way way fringe. 60 Minutes especially is probably only still around because it would be a public embarrassment to kill it.
I mean, the heavy metal sonic aesthetic is not well suited for Mariachi music. The fact that Metalachi exists and has a following doesn't disprove the hypothesis.
It's even worse. 50 years ago that's still what they were, but they had the "power" of defining reality. Politicians, millionaires, and other actually powerful people had to suck up to them or with the narrative-shapers against them they would have real problems.
But that reality is breaking (if not totally broken). Social media, feed algorythms, recomendation engines, etc, are taking those narrative-shaping powers from them. So they get less respect.
Correct answer.
People dramatically underestimate the extent to which reporters are stenographers: they go to relevant people, get quotes, write some background around the quotes (which itself is derived from previous statements), and hit publish.
Almost every business article you see is push-driven. The business being covered will issue a press release and it gets rewritten into articles.
The press are pretty good at attribution: if the NYT says that "Bob said X", you can be pretty sure that an NYT reporter heard Bob say X. That doesn't tell you anything about whether X is true or not.
But of course this would be expensive to operate, difficult to insulate from corruption and compromise, and unlikely to be popular with advertisers, whose objectives constitute the epitome of conflicted interest with such an outlet's stated core principle.
As you shade over from news to analysis, there are outlets like that. The Economist comes to mind; I don't think I've ever felt that their content was written from press releases. But it's also at least a day, usually a week, later than the actual news.
There's probably a project management style triangle here: fast, accurate, and, um. Some third thing. Pick two.
I think it’s entirely possible that an industry with low competition and high nepotism could just be doing their jobs poorly.
Isn’t that why Joe Rogan is more popular than CNN?
They're not trying to be gourmet food, they're trying to be fast food. They were very bad by even that low standard, and they became better by that standard. I'm still not a fan, but to give credit where credit is due, they did improve.
So yeah, some credit, that's fair. But I think the lesson is that good management recognizes when quality is falling off the bottom of the bottom rung, and makes adjustments to get back on that bottom rung.
We can both recognize the limits of mass market news and think that, eg, CNN is delivering a product below that standard.
You say this as if it's an inherently bad thing. There's nothing wrong with some MSG as a flavor enhancer.
How is Rogan an an example of good journalism? He doesn't do background research or push back on guests.
Vass you dere, Charlie? [1]
Misinformation/disinformation may, I suppose, have always been pretty much this bad, but the writing quality and intelligence in the mainstream media was not.
"Journalism" today reads like an assignment written by a near-illiterate freshman engineering student in the compulsory English class, by the standards of the mid-90s. At best.
And I think the reason is obvious - modern advertising technology proved that decent writing adds essentially zero value and forced everybody to accept it.
So the people with liberal arts degrees are not wrong to hate techies. But once, even techies wrote better.
We used to live in a world where elites guessed at what ordinary people wanted, and once the data-driven creed took over, it turned out they were mostly wrong. But optimization taken too far is evil.
Yes, true investigative reporting is rare (and expensive), but good work is still being done.
For the media at large, given the volume of stuff you can read, much of it is plain "story-telling" or "narratives", and I do think the media is more likely to go with things that fit the narrative of the day than look at things with a critical eye.
With Theranos, the media absolutely wanted to highlight a "female Steve Jobs", and Holmes used that to her advantage. Similarly, with SBF, given all the smarmy characters in crypto, he fit the narrative of "the good guy", "the next JP Morgan" coming to save the financial system for good.
Still, it's weird to have to read about this at poker.org first instead of any "respected" news source.
There was an editorial on CoinGeek in February casting doubt on SBF and pointing out the poker scandal: https://coingeek.com/ftx-ceo-sam-bankman-fried-isnt-who-you-...
It's not that "the media" has gotten worse at their jobs. Rather, there simply a lot less funding for reporters. The hit in funding has become much worse in local reporting -- especially local newspapers. However, if this is viewed as a training ground for the few large national/international news organizations, it's easy to see how this has a profound impact for even the large and well funded publications.
There's simply much less reporting happening than their used to be, and it's a real problem.
https://www.pewresearch.org/fact-tank/2021/07/13/u-s-newsroo...
https://www.statista.com/statistics/626459/number-employees-....
Newsrooms are completely different from investigative digging into stuff.
I am in UK and look at my local papers - the number of stories is massively down and the report numbers are much smaller. One reporter now for several London boroughs when there used to be several for one.
Who is looking at local government now?
Yes, news orgs could have adapted faster, but most privately held papers were in the black. Only when the debts and insane growth expectations were added were they dying.
Private equity is ruining modern democratic institutions.
The issue is lack of advertising revenue. No local classified adds or local firms. All gone to Facebook.
There's plenty of funding for and to reporters who aren't trying to discover the truth but instead manufacture it.
Is there a reason we think they persist?
Unless you are comically bad at crime, bad actors will maintain some level of misdirection to conceal their malfeasance. There are only so many hours in a day, there is not time to do a deep dive report on everything that comes across the desk (most of which would match the official narrative). Theranos took years of concentrated effort to expose, with a large amount of risk (real or implied) to those involved.
With Enron, they were very very good at obfuscating their scam. But it was the WSJ affiliate that was the first mover on Enron being fishy. A major short seller saw that article and shorted the stock, then turned a tip into another reporter. That reporter then pretty much started its downfall. It was, possibly, the best example of the media being the guardians against a scam since the internet started.
In the early days of Enron, an investigative journalist would have found a real gas trading company. But at no point in the history of Theranos would an investigative journalist worth their salt have found a real company.
Although, in the early days, a journalist wouldn't have found the gas trading. While Enron traded oil early on, they pretty much built the gas trading industry at the same time they were becoming more scammy.
Especially when there were tweets as old as 2018 at the very least describing the very scam Alameda/FTX/SBF was pulling.
@bitfinex'ed, a Twitter account which exposes tether for the scam it is since maybe a decade (and tether shall eventually fall), has been posting proof of all the wrongdoings. Including the ties between Alameda an Deltec (tether's bank in the Bahamas) since the very start of the scam.
It's also the media's fault that they re copy/pasting everywhere that it's "leveraged trades gone wrong, sending SBF in a death spiral".
That's not the story at all yet that's what these scummy media are publishing.
The story is that the goal was, from day one, to not only defraud people/investors but also to do a regulatory capture of the crypto exchanges market by greasing politicians and working hand in hand with officials and ex- officials who all knew each other.
If there were still investigative journalists around, there's material for quite a story.
But it's better to present SBF as an altruistic woke kid who, sadly, was sent into a death spiral after a few bad leveraged trades.
Going against the narrative is brave but it doesn't pay the bills. Besides would it even matter? Does anyone on r/cryptocurrency even care what the MSM writes?
And the public doesn't help with their hero worship of tech douchebags.
No, sorry, that is their job description. But since we're using radar as analogy, let me introduce to your new friend, IFF (Identify, Friend or Foe).
Part of the problem is that the press is owned/regulated by the people in the very institutions that fund the scammers.
It's stunning to me that that interview didn't crash FTX by itself, and it indicates that the industry (fintech, VCs, crypto) is engaged in a huge pump and dump. It's legitimately criminal.
[0]: https://archive.ph/fGLat#selection-3973.7-3973.12 (27:13)
Not to mention the fact that a lot of investigative leads likely either don’t pan out, are not newsworthy, or ruffle feathers better left unruffled (news media relies on connections and access for leads on stories, and their customers are advertisers, ie large corporations).
There is not much of a market for investigative journalism. IMO tort law or class-action suits could fill that niche too if the incentives were more aligned (gotta be a lawyer to make anything off a class action) and the playing field were more even - arbitration clause says what?
So lacking an incentive for either of those the next best thing is short selling, which also sucks because it’s time-based, risky, requires capital, and isn’t relevant when something doesn’t have a direct link to a tradable security
SBF and crew were probably basking in their own genius too much to realize how most Michael Lewis books end up. They probably thought they were more Moneyball than The Big Short.
" The $69 million spent by Bankman-Fried and his deputies on the 2022 midterms likely would’ve done little to plug FTX’s reported financial hole, but it couldn’t have hurt. Bankman-Fried told Forbes last month that “in the end, I care about policy more than politics,” adding that “my giving has been bipartisan, and my goal is to help support great policy makers.”
Bankman-Fried has supported Republicans during this cycle, primarily through his $2 million contribution to the blockchain and cryptocurrency-focused GMI super PAC. But the bulk of his giving, including $27 million to the Protect Our Future super PAC and $6 million to the House Majority super PAC, has gone to support Democrats. Bankman-Fried told Forbes last month that “much of this was for primaries, rather than D vs R general elections” ($33 million of his contributions were made during the first four months of 2022.) "It seems SBF was backing/bribing pro-crypto candidates.
It's not specific to crypto. Theranos was a similar fraud, and so was WeWork.
They can make a public spiel about how they were deceived as long as they want, but to anyone following them at the time it was obvious they were going in with their eyes open. Whether the product works or not is simply not their top priority when making an investment.
edit: I'd like to point out to the people who clearly disagree with the above that the dude running this scheme from Bahamas was openly taking drugs and playing videogames in meetings with investors. It's even mentioned in the VC material. Yet they did shower him with money. Please do tell what kind of due diligence could possibly miss the warning flags that maybe this company wasn't completely honest?
HSBC teaches us that the US govt happily approves of financial crime as long as it's large and they get their cut: https://www.investopedia.com/stock-analysis/2013/investing-n...
Madoff's mistake was probably not sharing with the right people, and that the optics were a bridge too far.
sbf was giving tons of cash to the democratic party so NYT cant find anything bad to say about him
https://www.forbes.com/sites/michelatindera/2021/10/21/the-w...
https://www.opensecrets.org/outside-spending/donor_detail/20...
He supported his girlfriend, Michelle Bond [2], who ran as a Republican (she lost) for New York's 1st Congressional District [3]. She served as Senior Council at the SEC during the Obama administration [4].
Local party officials accused Bond of being a "double agent backed by Dem money":
> Ryan Salame, the live-in boyfriend of Michelle Bond and co-CEO of FTX, has rallied his crypto-billions behind his girlfriend’s Congressional campaign. Some local voters have claimed this is a shameful attempt to “purchase” the election.
> As one of Bond’s most prominent financial supporters, Salame has become a familiar face on the campaign trail. He totes closely behind, posing in photographs while shaking the hands of Long Island Republicans and keeping his close association with Democrat mega-donor Samuel Bankman-Fried silent.
This has led some to allege "@rsalame7926’s political contributions were made to offset the massive Democrat donations from @SBF_FTX and to spark the illusion that there was a balance of political donations coming from @FTX_Official" [6]
[1] https://www.politico.com/news/2022/04/11/new-crypto-pac-laun...
[2] https://twitter.com/michellebond111
[3] https://ballotpedia.org/Michelle_Bond
[4] https://www.forbes.com/sites/jasonbrett/2020/10/30/meet-mich...
[5] https://messengerpapers.com/2022/08/soros-successor-looking-...
[6] https://twitter.com/JagoeCapital/status/1591466731448442881
A growing force in political fund-raising, he has a super PAC that recently gave more than $10 million to a Democratic congressional candidate who supports some of his philanthropic priorities.
In public, Mr. Bankman-Fried can sometimes seem uncomfortable, tapping his foot or twirling a fidget spinner. But the awkwardness is part of a calculated self-presentation. Over countless tweets, interviews and TV appearances, he’s positioned himself as a mad-scientist-cum-diplomat — a straight-talking brainiac willing to embrace regulation of his nascent industry and criticize its worst excesses.
Now Mr. Bankman-Fried is trying to leverage his fame to set policy in Washington, at a moment when the risks of crypto trading are growing increasingly stark; he makes regular trips to the Capitol from his base in the Bahamas, meeting with regulators and testifying in Congress. If he’s successful, he could become one of the most influential figures in the new era of technological experimentation that supporters call web3, writing the rule book for a slew of risky investment products that are increasingly reshaping the internet, finance and even the arts.
But his detractors say his advocacy is driven by self-interest. His political contributions have prompted complaints that he’s distorting the competitive landscape to advance his own agenda. And the charm offensive in Washington has alarmed consumer advocates who argue that FTX is exacerbating the volatility in crypto markets and putting investors at risk.
FTX serves as a portal to the crypto world. With the click of a button, a curious investor can turn dollars into Bitcoin, Dogecoin or Ether. It’s as simple as buying paper towels from Target — except that the value of a digital asset can be wiped away overnight amid the types of market gyrations that have sent cryptocurrency prices crashing over the past month. In the United States, crypto exchanges occupy a regulatory gray area: It remains unsettled whether the tokens are securities, commodities or something else entirely. Mr. Bankman-Fried has been pitching a regulatory structure with expanded authority for the Commodity Futures Trading Commission, which is smaller and less aggressive than the Securities and Exchange Commission and has traditionally been more sympathetic to the crypto industry.
FTX is headquartered in the Bahamas partly because 80 percent of its $1.1 billion in global revenue stems from a trading instrument that remains illegal in the United States. On the FTX platform, investors can borrow money to make enormous bets on the future prices of cryptocurrencies, leading to potentially astronomical gains — or catastrophic losses.
So not only is the article extremely up-front about the fact that SBF donated to the Democratic primaries (and as far as I can tell, none at all to the general election), it's far from "glowing" (it's a banal, if colorful, profile) and, contrary to the parent commenter's claims, nowhere does it claim that he is a "do-gooder", rather using the phrase in the context of how EA advocates think of themselves.
The sheer irony of people railing against misinformation in media while willfully misinforming people on social media.
This is the basis of NYT Pitchbot.
Who does believe that for more than 1 second?
They published three stories in the last week about how Democrats winning the election just now is bad news for Democrats.
https://twitter.com/nytimes/status/1591444463963947009
https://www.nytimes.com/2022/11/13/opinion/democrats-are-blo...
https://twitter.com/nytimes/status/1591944164240814080
Some of the NYT journalists like Peter Baker are so bothsides they don't even vote in elections!
https://www.nytimes.com/2020/03/02/reader-center/political-i...
That's the real story here.
I transcribed a discussion between Chamath Palihapitiya and Brian Armstrong and others talking about this. Here's what he was saying about all these people who've been very blind and didn't do any due diligence:
"I just want to say the second uncomfortable thing out loud which is there are a lot of venture firms in SV in this period of both not doing any work or due diligence who also took the extra step and actually created classes and teached teams how to create these tokens.
And those artifacts --those video links and artifacts-- are sometimes on their website, they're still on YouTube, they're inside of Twitter, and what these folds would do when we talked about this, the game that they played was they would get a team they would create a token, they would also buy equity at a crazy valuation, the equity was locked up but the tokens were not, and then they would put them on an exchange and sell them to unsuspecting people and they would be able to dump these tokens and if you look inside that trend those were the trend of "securities" instead it was done in an unregulated way.
They're going to start to look at a bunch of other tokens and token sales and you're going to end up looking at some very well known venture firms in silicon valley.
That token is not the only token that's been engineered by SV firms and it is also no the only token that's going to zero that's been engineered by SV venture firms site.
There's videos (still) today on some of the most well-known Venture firm sites on how to do this.
They're instructing people how to do this. It's what they did.
but I really also hope they figure out these other tokens as well ... ... and you will see these are unregulated securities that were sold by our brethren..."
It is, to me, about much more than "cryptocurrencies are scam".
Many in SV are deep into this. There are officials and ex- officials implicated too.
People have been dumping worthless tokens created by the tens or hundreds on people all the while the media were presenting SBF as an altruistic trustable white knight.
That's the real story here.
Complete with SBF being the biggest or second biggest donor to Biden's campain for presidency though a fund which SBF's mom (a lawyer and teacher at Stanford) was running. And SBF's father, also a lawyer and teacher at Stanford, recorded explaining how he's helping FTX with charity and regulations.
> Crypto turned into a haven for replaying every form of financial fraud ever invented on an epic speedrun against retail "investors", and a whole lot of powerful people and institutions have dirty hands. The idea all of this could be adequately explained by stupidity rather than malice strains credulity.
Exactly. I'm glad some at least this for what it actually is.
Thankfully some people warned and described the very scam SBF was pulling the day FTX launched (in 2018 ?). Before that several had already noticed Alameda Research was behind crypto market manipulation and pump and dumps of shitcoins.
The signs were all out there and nobody looked.
Best description of all that is wrong with crypto. It's a human problem, not a tech problem.
This whole crypto failure is going to act as a bit of an 'innoculant' for any relaxation of financial laws. If anything, it should lightly strengthen support for further financial regulation of Wall Street and the like. All responses to any loosening up of the banks can reasonably be countered with 'Yeah, but look at what happened with Crypto.' So I guess that's at least something.
This was clear years ago. That is why I've been avoiding crypto like the plague.
Can't make this up. Reads to me like, on the contrary, they couldn't have found anyone more qualified.
(pleasure derived by someone from another person's misfortune).
That German saying is on point and really sad.
This is actually quite a profound statement.
Is there actually anything in human history that can come close to rivalling this ?
We have everyone from teens promoting shitcoins on TikTok, to household celebrities like Matt Damon, to white collar criminals, to arguably VCs, all the way to nation states like Iran and North Korea.
The wild west was only wild because Hollywood needed a narrative.
[1] https://blogs.berkeley.edu/2010/06/16/a-crime-puzzle-violent...
First our cities today are as safe as they have ever been. Crime is slightly up from 2018 but 2018 was the lowest ever. Small bumps in crime are not usual.
Second, googling murder rates in that region is possible and they are an order of magnitude greater than even the worse US cities.
We don't have written accounts of the tulip craze but I would imagine there were a lot of nefarious activities underway then. This is more global and the movement of money is transparent but anonymous in some ways. I think a hard part for a criminal enterprise like a drug cartel is the cash to crypto laundering that needs to happen in the amounts that it needs to. My guess is it was easier for shady banks and other crypto products to do shady things since its all just bits and bytes.
I disagree. It's super weird that we accept "well I was just doing it for the money" as an excuse from people who are often already insanely wealthy.
Everyone walks around with a computer in their pocket built in a factory where people were to have known to be treated poorly, possibly to the point of suicide and then they use that device to type in comments about moral superiority.
Civilization is a story of gradual improvement. Insisting that anything be completely beyond reproach overnight is not a productive view. And yet some people can't resist.
We're generally not given a baseline for the surrounding city, area, and country. The west has suicides, China will have suicides, how does this factory compare to those? Our impact isn't explained, along with the replacement for it, on the worker, the company, demand, and so forth. If there are any better alternatives and for who, and what the apples-to-oranges weighting for that decision is. The feelings and preferences of current, post, and hopeful company/industry employees and other citizens in that area.
At one extreme is a literal "gun to their head" moment where it's obvious there was no real choice and correspondingly the person shouldn't be held responsible (eg, someone points a gun at you and says hand over your wallet. That doesn't mean you really "gave" your wallet to them).
At the other end of the spectrum is a person with a tremendous amount of power, freedom and choice- eg, a rich person living in a Western country, making a decision where they have lots of options and/or can opt out or decline an opportunity freely.
It's easier to forgive a person doing something unethical to survive than a person living in luxury doing something unethical to have slightly more luxuries.
Sure, they can almost always find someone willing to do the advert. But that does not absolve that person of the moral consequenses of doing the work.
>>I would give a pass to any celebrity that was paid to be in advertisements. They are paid to make an appearance and say lines convincingly.
The exact same moral structure can be said about this, even though it is an extreme example: "I would give a pass to any assassin that was paid to kill the targets. They are paid to accurately deliver lethal doses of bullets or toxins and ensure that the targets end up dead."
Obviously, none of us would consider giving a pass to the assassin because it was a "professional paid job", even if (s)he was doing to feed his/her starving family.
Why should we give a pass to the actors? While different levels and directness of harm, both are taking money to do harm to others.
[0] https://www.huffpost.com/entry/george-clooney-35-million-one...
If any of the actors did any research they likely were convinced it was a solid thing to do at the time. It could have even been a "oh so-and-so is doing an ad, then I'm in" type of thing. Its pretty obvious whoever was involved at FTX was pretty convincing and doing wrong/illegal things behind the scenes so that's why I said they should get a pass.
Your first argument was that "...paid to be in advertisements. They are paid to make an appearance and say lines convincingly."; i.e., you justified it on the fact that they were paid professionals; the type of work doesn't matter and no judgement should be done.
Now, you admit that there is indeed a moral/amoral issue in making advertisements, but argue that in this case the FTX players must have been good liars and the actors must have been fooled.
Considering the actors to have reasonably vetted the thing as worthwhile & ethical, but having been fooled, is indeed a much better grounds to give someone a pass.
Especially so for the celebs who also invested their own money and have now lost it.
Of course the assassin example is extreme, I said so, and selected it because extremes can make the point more obvious. That makes it no less valid. I'm not questioning people's morals — I making obvious the foundational element that something being a "professional job" does not remove the actions from the sphere of moral judgement.
Certainly the celebs who invested along with promoting the thing were also fooled. That does not mean that they were absolved of moral judgement because it was a professional job, but that they can indeed be judged and given a pass because they were also fooled. Sure, the end result of both is that they pass, but the reasoning matters.
Your second argument is a good one in probably most cases; the first was not.
look up https://en.wikipedia.org/wiki/Wildcat_banking it's kind of an interesting period in finance that got kind of forgotten as it did not exactly end well.
"Crypto is a great experiment where people who didn't live in the 19th century get to relive at 10x speed all the bank runs and regulatory changes that happened then"
Much of the altcoin industry seems to have picked it up as an instruction manual.
(Not that there aren't scams in Bitcoin land-- but they've mostly been concentrated into the altcoin ecosystems, which tend to be overweight in the exuberant and gullible even compared to Bitcoin. It's completely unsurprising to see the FTX implosion happening at a scamcoin casino who's CEO had been publicly attacking Bitcoin -- it would have been much more surprising to see it at a Bitcoin only or mostly organization)
Shitcoins represent a technological breakthrough in scamming because they scale so much better than operating a call center and have no physical footprint
We see this in online communities. We see it in the real physical world. And, yes, we are seeing it play out in crypto.
An online community without restrictions or boundaries doesn't look like one's fond memories of university dorm chats over a glass of wine; it looks like 4chan or the dark web.
A country without effective governance doesn't look like the romanticised media depictions of the wild west or your favourite science fictional post-scarcity anarchy utopia; it looks like Somalia.
A financial system without regulations doesn't look like your family kitty; it looks like, well, the crypto ecosystem.
Humans can't do better unless we all start to consistently choose cooperate/cooperate in prisoner's dilemma, and one quick look at, well, any community anywhere today shows we are a long way away from that.
This is not a technical problem, and cannot be solved with a technical solution. Humans do not know how to solve it. I wish we did. Historically, the most aspirational attempts to solve this problem have been the ones with the most gruesome outcomes.
Is this a soft implication that the same scene should "continue" to exist as it currently is?
If he was promoting FTX on his own personal account like so many "influencers" do, then I would be ok criticizing him.
While this article covers an interesting topic, the title is clearly an attempt to bandwagon on the "Tether is next" narrative while contributing nothing substantial to the conversation
That’s a pretty interesting little side story.
One example blog post: https://csgobetting.com/iesnare-how-youre-being-made-paranoi...
What unique properties does Bitcoin have that makes it useful that other cryptocurrencies don't, beside first mover advantage?
Bitcoin's value (not in terms of money, but in terms of usefullness) is an emergent property of the combination of proof of work, the difficulty adjustment, and its peer-to-peer nature. Other cryptocurrencies suffer because their founders have changed one or more of those properties in an attempt to "fix bitcoin" (bigger blocks! faster blocks! more blocks!), but that cripples the resulting emergent value.
If Bitcoin is directly cloned as Coinbit, and miners flock to it, and it achieves a greater total hash rate than Bitcoin, then its value supersedes Bitcoin's. Bitcoin's first mover advantage makes this unlikely (though non-zero).
It's 100% voluntary and makes zero promise of some fantastical ROI (unlike every non-Bitcoin cryptocurrency).
It's quite beautiful. It's universally frowned upon in the Bitcoin community to tell people they're going to make X in X time frame. All of that nonsense takes place with the Ethereum/shitcoin crowd which gets conflated with Bitcoin.
Some people may think this is a silly comparison because one of these things was fueled by a get rich quick FAD and the other has at least some real value in the real world.
But they are pretty similar in that they will be worth whatever people want to pay for them in the long run.
It's a function true of pyramid schemes and any system that relies on network effects to be of any real value.
Not that I care about Bitcoin one way or the other.
SBF is deeply tied to Solana. It's reported SBF/FTX/Alameda were sitting on close to $1bn worth of Solana up to a few days ago. Some are apparently locked. This makes him the biggest holder of Solana. Centralized indeed. Now of course these "$1bn" are in that worthless Solana scamcoin which already fell from $32 to $13 since the news. So I take that that $1bn is now more like $400m or something, and shrinking fast.
It's possible that, like with Serum, SBF was involved in the creation of Solana from the very start (I take it more independent journalist are going to dig on that: I don't expect mainstream media to do much research that said).
Why do we need digital scarcity, exactly?
>Other cryptocurrencies are less secure (the many direct forks, such as Bitcoin Cash and the like), less decentralized (Solana, BNB), less permissionless (any system that can be halted by its operators) or less scarce (Ethereum's emission schedule can be changed by a single organisation).
Ok, we agree that other cryptos are bad too.
>Bitcoin's value (not in terms of money, but in terms of usefulness) is an emergent property of the combination of proof of work, the difficulty adjustment, and its peer-to-peer nature.
But what is that useful to do? I agree cryptography and blockchains are nifty, but why do 1000's of decentralized computers need to do the work (and therefore duplicate/waste resources)? Couldn't one computer do it and make their work public so anyone/everyone could check their work?
You'll say something ambiguous thing about trust, but please give a concrete example when the above wouldn't work. Visa (and it's shareholders) have hundreds of billions of USD worth of incentive not to fuck up transactions (enough to buy enough electricity and ASICs to become 51% of miners), so why don't we let them do the work and then we check their work?
Is that bad because it's what we do now and it works?
Sure you could let Visa do this (as they and Mastercard handle most online payments now anyways), and it would probably work as well as Visa/Mastercard work now, but for some people that is not good enough.
1. Differentiate clearing (telling you you now have some money) and settlement (you getting the money you "have"). For Visa and Mastercard the latter takes days or more.
2. Permissionless means that you don't need any entity's permission to transact. Visa and Mastercard definitely require permission, and on occassion don't give it for various legal but "immoral" things like porn, Wikileaks, and who knows what in the future.
3. Borderless is kind of similar to permissionless. As soon as you bring in legacy behemoths like Visa into it, this kind of goes away.
4. With decentralization, fees are determined objectively (you pay to get in, and if there is enough demand, regardless of price, blocks are full). A monopolist would charge as much as they could get away with, sometimes even if that means no transactions are being performed.
---
I would say that with a Visa(like) company, you definitely lose 2, and 4 will probably have some bullshit involved.
1. This has nothing to do with cryptocurrency. There is literally nothing about a decentralized trustless architecture that makes this happen. You're falling into the common trap that crypto people fall into where they equate criticisms of the current centralized system with 'possibilities of a decentralized system,' when really what they mean is any hypothetical new system could be better than the current one. All else equal, a centralized system will be faster no matter what (i.e. this is a major reason why servers are centralized) and I agree we should be working on better/faster centralized systems.
2. You definitely need the permission of the miner/validators/whoever to transact [0]. You also need to convince them to put your transactions into the block and there is nothing that compels them to do so other than the same economic incentives that motivate Visa. You are again, criticizing the system now and imagining that a decentralized system is better.
2A. To break down the problem a little more clearly for you - Visa's main service (what it makes money doing) is actually fraud protection, since as you must know bank's can very easily settle between each other over other rails. Visa chooses not to process transactions that are at high risk of fraud/illegal activity, because they have regulatory liability. Miners not having regulatory liability isn't a function of decentralized trustless architecture, it's a function of being new. Either blockchain is similar to a wire transfer (something that porn companies still have full access to) or it's similar to Visa and will face the same problems.
3. I suggest you google the countries where it is illegal to use crypto to buy goods/services (governments plan on keeping currency controls intact after all!). The shear number will astound you!
4. Not sure on the monopolist point there, but again, Visa/Mastercard/Amex compete on swipe fees (look at the Costco example!) so I'm not sure what this decentralized point you're making really is.
[0] https://cryptobriefing.com/solana-blockchain-halted-for-eigh...
Bitcoin isn't a "system" unless you're already in it. If you're not already in it, you have to consider the whole economy and Bitcoin's "job to be done" inside it.
At which point there's two problems. One, you have to get into the system which means the things people are claiming "aren't crypto" like exchanges are, in fact, part of it. Two, it doesn't necessarily possess scarcity, because users have the option to fork Bitcoin rather than pay you to use it.
Bitcoin has a real multi stakeholder maintainership, where no single party can hard fork the currency or change the rules in any important way from the ones the users signed up for. This is what people mean when they say hard forks should be close to impossible to pull off. The only exceptions are where there is absolute consensus, such as pure security issues.
Closely related to the above, the issuance model is clearly known to everyone in advance and will not change. The issuance is not the same thing as the consensus rules. That helps force stakeholders to play fair.
There is no founder or foreground representative that has an undue influence in development. Even the core developers will have to convince everyone that their changes are sound and will not change the rules of anyone's investment, and more often than not, ends up with them dropped if consensus can not be reached.
Again related to the above, there was no pre-mine. Since there was no central party, no one owned any coins before the public blockchain started. So no one could sell or promise any future winnings. There's this whole founding myth to build culture on, and npt everything may be true, but what's clear is that an effort was made to prove there was no pre-mine (someone included today's paper in the genesis block, before which per the protocol no coins can exist).
The first mover advantage does not enter this. You could start a new serious attempt at a currency along the same lines as above, but very few bother when you are competing with outright scams. Personally I believe we have to wait some time to shake out the scammers before we can see any serious attempts at competing.
Both Tether and FTX hired former white collar criminals from the same company to head their regulator compliance.
What's with the snark? The title itself is technically accurate. That is "a link". There's nothing to justify. What you want to do is debate the strength of that link. That's fine, but it does nothing to change the accuracy of the title. A connection is a connection, like it or not.
Again - a link is a link, regardless of whether or not it means anything. It is a connection between two entities; nothing more, nothing less. They touch each other, and that is literally what is happening here. That link can be anything - something interesting, or something not - but it remains a link regardless.
In this case, your point is, "That is a link, but I find that link weak and don't believe it means anything".
Not all criminals end-up behind bars.
I suspect that some scams can go unnoticed for long enough.
I also suspect that scam opportunities are exploding.
Keep it low-key, don't get greedy, and you can probably milk it forever.
IMO, many startups are scams on some level. VC A funds company X. VC A also funds company Y. Company Y 'decides' to use company X's hot new product and has a lofty enterprise license. This happens a few more times. Company X now has very large revenues, VC's friends at big-nation-bank decide it's time to IPO and cash out.
Source: a decade of VC funded Enterprise saas company selling experience
It seems more to me like governments don't want to take financial crimes (specifically fiditiary duty) seriously, as it would make precedent for bankers who do the same crimes, just less visibly (bailouts).
But when you are selling financial services, this kind of fakery almost always blows up because the accounting is the product. And if the accounts are fake, the thing is fake. Fake accounts always leave a hole that can only grow with each cycle of fraud. Dan Davies wrote a great book titled "Lying for Money" on the whole sorry process[1]. Galbraith called it the "bezzle".
[0] - http://brontecapital.blogspot.com/2011/05/steve-madden-count... [1] - https://www.goodreads.com/book/show/38605195-lying-for-money
http://mungerisms.blogspot.com/2009/09/philanthropy-round-ta...
But, what I am calling for is not a lawless reprisal but something a little closer to appropriate punishment than either is likely to get. Punishment that many people in countries with much more history culture and civilization than ours, like China, would agree is gentle and mild for these kind of crimes. In China someone like SBF would likely just be executed, and yes, this seems on the harsh side of reasonable and deserved - but only just.
Market participants that do this aren't market makers anymore.
So, in terms of "crypto scam," there's nothing to see here.
I can too promise the moon and never deliver.
> Sam Bankman-Fried stormed on to the US political scene with multimillion-dollar donations that led lawmakers, particularly Democrats, to believe he was ushering in the next generation of donors. But in a matter of days, his business empire collapsed into bankruptcy and the prospect of millions more in donations evaporated.
https://fortune.com/2022/11/10/sam-bankman-fried-ftx-joe-bid... (https://archive.ph/BBpQN#selection-417.0-424.0)
> The 30-year-old Bankman-Fried has been a major force in Democratic politics, ranking as the party’s second-biggest individual donor in the 2021–2022 election cycle, according to Open Secrets, with donations totaling $39.8 million. That ranks only behind George Soros (about $128 million) but ahead of many other big names, including Michael Bloomberg ($28.3 million). What’s more, he had promised to spend far more on Democrats moving forward, predicting in May that he’d fund “north of $100 million” and had a “soft ceiling” of $1 billion for the 2024 elections.
Because he donated money to Democrats it makes people still want to invest in cryptos, is that the message?
If you want to complain about BTC, complain about BTC. FTX was not BTC.
The Winkelvoss’s net worth [1] is less than half of FTX’s shortfall alone [2]. These folks didn’t get rich by giving their money away.
[1] https://www.celebritynetworth.com/richest-businessmen/tyler-...
[2] https://www.bloomberg.com/news/articles/2022-11-10/sam-bankm...
Even if you have the most cynical opinion of cryptocurrency, you must admit it's alive and well. It is as long as there are enough people who believe that it is - and your honest answer to the above would reveal that you know that to still be very true.
Interrst rate hikes kill zombie companies. Scams put dumb people under the lash of their betters.
Continuing this line of thought, isn't the next level of "betters" the people who would readily employ violence to get retribution on those who scammed them? Or even those who would just employ violence to take what they want in general?
I can understand the law of the jungle as-it-currently-is point that boils down to "lol normie rubes fell for advertising", but extrapolating that out into an overarching moral judgement makes no sense unless you're also repudiating the specialization of labor that has led to most of our current prosperity.
Really no price? Even given the opportunity to buy at $10, you still wouldn't hold?
If it hits x sell. So if I was given a coin currently "worth" $15,000 for $5. I could set a stop loss of $6 and always make a profit since my initial investment was $5. Asleep, awake, doesn't matter.
I just don't understand all of the "BTC will never fall below <some level not far from the current price>" thinking.
Past performance is no guarantee of future results, but maybe that, the improbable 12000%, is the thinking that you're trying to understand?
This stays very much viable. Right up to the point that it isn't. Then, people will wonder what is backing those tokens, and if they want to risk the event that they aren't worth their advertised value. Then, a liquidation crunch happens and the company collapses in onto itself.
That said, the Tether situation is clearly fraudulent in some way, just not the one people usually put forward. So stay away, if you aren't already.
source? Sources like these[1] don't any mention recent issuances by tether.
Anyone doing international money transfers. Hell, that included intra-EU money transfers not 5 years ago.
Anyone in a bunch of countries. Lebanon being the most recent addition. Venezuela, Columbia, Turkey, Russia, Greece (sort-of-not-quite-anymore) ...
Anyone in legal but unfairly treated business/professions. Situations vary from country to country. From sex work, even website admins, to "the unbanked", who can expect the authorities to impound their money at the drop of a hat.
Anyone who wants to do large cash transactions safely without using a bank. And that DOES NOT mean drugs. Reality: you do this because you're afraid bank transactions can be reversed, which is possible in a bunch of places. Large, in the EU, has now become smaller than the cost of a used car.
Recently, if your transaction involves anyone on social security, your or their bank transactions may be monitored very closely by non-judicial institutions. If this is unwanted (and I guarantee it'll be unwanted) that will means you either use cash or crypto, depending on the amount. Although a lot of people in this segment haven't really discovered crypto yet.
After all, BTC is the reserve currency of all these crypto scams, as you call them.
And no, BTC is not the reserve currency; Ethereum is. Nearly all of these "crypto tokens" are just ERC-20 contracts that run as contracts on the Ethereum network. They're not even cryptocurrencies, just contracts with sets of rules that mimic the properties of a currency.
Using the sticker price to decide if a crypto/stock is a scam or not a very good idea.
Timeline:
- April 25, 2019: Biden announces his presidential campaign.
- 13 days later, Sam Bankman-Fried, son of Barbara Fried (co-founder of political fundraising organizations), launched FTX crypto exchange.
- The exchange is an overnight success. Sam Bankman-Fried (SBM) becomes biggest donor to Biden.
- Most of the FTX team is reported to have flown to Hong Kong now, so China, the CCP is their safe haven?
Certainly there will be a lot of noise to shuffle through over the next few days, weeks.
Edit: Great timing - DailyBeast literally just published a story exposing how the leader of one of those idiotic COVID misinformation groups spent her millions in ill-gotten gains: https://www.thedailybeast.com/covid-misinformation-group-ame...
Let's talk about Andrew Hill and how a grant from Bill Gates resulted in him changing course on his Ivermectin findings.
I've been seeing articles here on hn for years disparaging corruption within academic journals, but suddenly with COVID, every journal maintained impeccable ethics right?
Which of the 93 studies do you have trouble with, what specifically in each of those studies, and how much does that change the numbers/conclusions such as 83% average prophylasxis rate?
P.S. https://c19ivm.org/ - 83% average prophylaxis.
You're correct that in Africa, in places where Ivermectin is regularly deployed due to parasites had much lower rates of COVID and death from COVID - but no, you're wrong - that's not where those 93 studies were conducted.
Ukraine didn't contribute to FTX at all.
Quote: “Aid For Ukraine shows how the global crypto community and the traditional financial system can work together,” said Solana Labs co-founder Anatoly Yakovenko. “Crypto donations to the DAO are stored and governed on-chain, then transferred to FTX, a centralized exchange, to be sold for fiat USD sent via SWIFT to the Ukrainian government.”
So basically people in the US (not the US government) sent money to Ukraine using FTX as an exchange to fiat (lol). Seems the whole thing is more like a PR thing than anything else.
You could say we don't have proof that Rishi Sunak isn't an alien from Alpha Centauri sent to Earth to eliminate donuts without holes, but you don't just make up extraordinary claims for no reason. It is logical to assume the simplest, boring thing is the truth unless you have evidence otherwise, a la Occam's razor.
Ukraine funding FTX: Mostly false. This appears to be a confusion related to the fact that Ukraine launched a website accepting cryptocurrency donations that were processed via FTX [1]. However, as far as I can tell, there was no funding of FTX by Ukraine other than possibly FTX earning transaction fees for processing the donations.
FTX being 2nd largest donor to Democratic party in the U.S.: Semi-true. SBF was the 2nd largest donor, not FTX the company. [2]
[1] https://www.coindesk.com/policy/2022/03/14/ukraine-partners-...
[2] https://fortune.com/2022/11/10/sam-bankman-fried-ftx-joe-bid...
It doesn't really seem like much of a distinction, since Bankman Fried viewed FTX as his personal piggy bank. Regardless, the DNC will be fine. They're still popular with voters, regardless of what donors are doing. Donor money doesn't actually win elections, voters do.