Maybe this is a stupid question, but how? Was the Bahamas' SEC holding its own copies of FTX's keys? I thought the entire point of these schemes was that this kind of seizure-by-force wasn't possible (absent exploits or insiders).
> the U.S.-based bankruptcy administrators […] had “credible evidence” that officials in the Bahamas had directed FTX founder Sam Bankman-Fried to access FTX’s systems after the Chapter 11 filing, “for the purpose of obtaining digital assets of the debtors.”
In the Vox interview he says he’s trying to win a jurisdictional battle with Delaware, this just part of that fight.
He had an "out" which was the companies business model was to purchase regulations from politicians intended to put all his competitors out of business, that process seemed to be going VERY well, and if he could have held out another half year, maybe two years... he likely would have been very successful. So he is legally obligated as an officer of his company to lie on twitter to keep the charade running long enough to pay off for the investors.
Certainly his investors would have made more money if he hadn't gotten caught than how it turned out, and being a criminal organization he can't be honest about that on Twitter.
Please point me to this law.
[1] second paragraph here: https://www.wired.com/story/ftx-hack-theft-crypto-tracing/
https://www.vox.com/future-perfect/23462333/sam-bankman-frie...
I have to say I find the idea of a "Bahamian regulator" amusing, or at least ironic. People don't put their wealth and companies in the Bahamas because of their reputation for excellent regulation.
Ultimately, if you foul things up enough in whatever jurisdiction you happen to be physically located in, men with guns will come to compell you to do something.
We often ignore the physical realities when thinking through security scenarios
I've lost count how many times I've seen self-professed crypto fundamentalists say they'd never, ever give out their keys during duress - that they'd rather die than hand over anything. (Usually in the context of some person getting kidnapped and giving their keys to their captors, has happened quite a few times around the world)
Not your keys, not your crypto.
There is no crypto scheme, no algorithm, no possible arrangement of private keys and Merkle trees that can escape the reality of men with guns.
It's a solved problem, and has been since the first bitcoin paper. That no one read that and just heard "magic internet gold I can get rich from" is their problem and not mine.
You don't get rich quick off the bitcoin protocol however so we have people run places like FTX: centralize and get the big bucks because they provide convenience. Then act surprised when it goes tits up like every other centralized system.
Same thing with people not encrypting their emails or not using tor as a bridge to the internet. In short: if you're the type of person who doesn't have their own key, yeah, prepare to get wrenched. The rest of us can manage our exposure quite easily.
I never said that, all I said was that this is not the BGP problem, it's the $5 wrench problem.
And it's not a solved problem, governments seize crypto all the time and people get tortured for their keys regularly. Just a few days ago the US picked up 50,000BTC.
All of crypto is a get rich quick scheme, but people want their winnings denominated in fiat which is why exchanges exist. It's hard to reconcile "best performing asset in history!!" with "you can't get rich off bitcoin."
> In short: if you're the type of person who doesn't have their own key, yeah, prepare to get wrenched. The rest of us can manage our exposure quite easily.
You have this completely reversed. If you're the type of person who does have their own keys prepare to get wrenched.
Sure thing bud.
OP is likely the same kind of person who calls taxes "theft" for rhetorical purposes.
You mean violence. Physical force. In that context, the means is irrelevant and pedantic.
Especially when they're so rarely used in situations like this.
Or are you saying cops don’t have real pistols in their holsters, and agents just pretend to be armed on those raids?
Of course, violence isn't the only sort of coercion... but it's part of it.
I mean: unless the attacker knows exactly how much coins you have, he has zero way to way if you're unlocking a decoy wallet or the real one.
That sounds so complicated, that even someone with a physics degree from MIT will not be able to make it work.
Say you give the attacker all of your bitcoins/data, they're now incentivized to continue punishing you in perpetuity regardless, since you could have provided a decoy.
They don't need to know the exact number. They need to have a rough idea of the number. In the most likely scenario, where a state wants access, they tend to have a pretty good idea, because they get that information from investors, state agencies, banks and seized records.
On the contrary. It's the only case where maths can defend vs men with guns.
Multi sig schemes spread over different people over several continents make the "men with guns" thing very difficult. Or multisig but m-out-of-n, with a dead beat: if after x weeks you don't hear of person A, person B and C move the coins to a new sig where person A isn't involved anymore.
There are also a shitloads of things you can do with smart contracts. For example you can have a smart contract where if person A's private key doesn't sign anything for more than x weeks ("blocks"), the funds are destroyed.
There also the whole plausible deniability thing: where it's impossible to know where a hardware unlocked with a hardware wallet is the real thing or not.
$5 wrench attack, here's my real password: take the 50 millions. Oops. Decoy. On the other password there's $2bn.
Didn't work in this case.
Ten years ago when my crypto was worth barely anything I had an airgapped, full disk encrypted, RasPi which required a Shamir's Secret Sharing key arrangement to unlock as my cold storage... just because it was something fun to setup.
Here a multi-billion dollar enterprise has less sophisticated OpSec. Just... wow.
A dude who plays LoL badly. Embarrassingly badly for his number of games.
But in GPs defense, I don’t believe these were multisig wallets with geographically distributed individuals in control. It was 1/1.
Nonetheless, a metal pipe is a good counter to crypto.
I may have to file this one under, "everyone wants to be a gangster until it's time to do gangster things"
No relation to crypto or even who you are anymore.
>No relation to crypto or even who you are anymore.
The relation with crypto is that crypto doesn't solve this problem either.
Nothing can solve the problem of protecting you from "bad men" who want to hurt you and don’t care about anything else.
"Ho ho! Good luck, gentlemen! For, you see, I've implemented a multi-signature scheme spread over different people across several continents which requires-"
"Understood. Off to jail with you, then."
I don't understand how this defeats the wrench attack.
Presumably you aren't released until the actual tokens are in hand, so decoys just make the attacker angrier.
Someone might be quite happy to engage squads in lots of countries to kidnap and beat everyone if the payout is billions of dollars, but it's a very different problem and e.g. the Bahamas government or some local thug won't be able to do it. I have no idea how large a cartel would need to be to have reliable operatives on the ground in lots of countries, and I'd assume if you're part of a group holding the keys to those amounts of cash, you're going into lockdown when two of your associates suddenly vanish.
Perhaps one or two if the multisig holders are already on board and will "reassure" the others that everything is fine.
Or one government (like the US) coordinates with others to get it done.
For criminals, it'll also be a huge operation, and it'll come with insane publicity which criminals typically don't like. Who's powerful enough and willing to potentially burn their existence in entire countries for such a payout, when they make billions a year?
Unless there are street fights, people will not care that much.
Or perhaps political opponents in unstable countries.
On the government side the USs reach is far and criminals are not always willing (or able) to go beyond it. Maybe coordinating with China won't happen, but let's say Japan, mexico and 2 EU countries is not out of the ordinary.
There are busts happening almost every year on that scale
Somehow I don't see state actors falling for that, especially when they have a rough idea of the actual numbers involved, based on the shitton of angry people, some of which are very rich and very well connected, clamouring about it.
If you’re part of a multi signature scheme and you’re hiding from US authorities in, I dunno, China or Russia or Pakistan or Afghanistan or Iran, there’s (a) not much stopping Uncle Sam’s boys from sneaking up on you anyway if they’re sufficiently motivated and (b) some local men with guns whom you might need to deal with as well.
In reality it’s probably not worth it for the US to track you down to the ends of the earth and/or get the CIA involved if you’re just trying to sneak some ill-gotten money out of the country, and it’s a lot easier for one of your multi-signature holders not to get caught than for the authorities to simultaneously catch up with a quorum. And maybe your group includes some people who really don’t mind living the rest of their lives in these types of places.
But for those of you who live within the greater American empire, the price you pay for keeping that money out of Uncle Sam’s hands is going to include keeping it out of your hands and also you go to prison if you ever get caught. Which is probably a bad deal unless you’re a drug cartel or some other group that’s already sort of priced in that outcome.
Side note: its interesting how "men" has gone from sometimes being gender neutral to being almost exclusively male and how "man" has gone most of the way down the same path.
Insiders can be press ganged with threats of violence, which the state has a monopoly on.
"Mr Zhong pleaded guilty on 4 November to hacking the website and has forfeited his Bitcoin and assets to police as he awaits sentencing." https://news.yahoo.com/stolen-3bn-bitcoin-mystery-ends-17073...
if such an event happens in a more or less civilized country, you might eventually get some third party to confirm that you're unable to disclose the key
If he's in a different jurisdiction, they get the other country to cooperate and share the seized funds.
Yeah.
Like they refused to show up for a man stalking his ex and trying to break in, during daylight and in full view of everyone in the complex, and they continued to not show until after he murdered her.