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Comment by petesergeant | Hacker News Reader

> this is straight up old-style fraud from a company

Traditional banks definitely go up bankrupt, and regulated financial entities definitely break laws, but it seems to happen with alarming frequency with crypto companies.

Given that the only two proven use-cases for crypto are doing an end-run around regulation/laws (however foolish or unjust people may believe those rules to be) and speculation/gambling, it also doesn't seem that surprising?

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I would probably add a distinction that one of the main current use-cases proven is avoiding restrictions rather than regulation/laws. I think a much more positive case can be made for working around limitations that are put in by large players in various industries to make it harder for the common person to do something or start a business in a given area, even in cases where there aren't specific laws around it.

> avoiding restrictions rather than regulation/laws

Could you give an example? Most of the ones I've seen are regulations/laws that someone simply thinks are unjust, eg a country's currency controls or avoiding laws designed to stop money laundering.

Or, you know, explicitly trying to make sure north korea can sell the crypto they make with ransomware.

> Traditional banks definitely go up bankrupt, and regulated financial entities definitely break laws, but it seems to happen with alarming frequency with crypto companies.

Traditional finance can be just as bad. Remember the savings and loan crisis? Just as regulations had to catch up with banking so too will they for cryptocurrency exchanges.

Sure, but I’ll note that you’re pulling an example from 30-40 years ago here where I’d be a little surprised if you couldn’t find an example of malfeasance leading to loss of deposits for at least every year since MtGox went down.

Yes but also consider how long banking has existed, and yet this still happened just 30-40 years ago. Cryptocurrency exchanges are relatively nascent in comparison.

The fact that a lack of regulation results in a marketplace of scams was known before bitcoin was invented. Naivety of that is not acceptable. Bitcoin chose not to build in any protections in a financial systems to stop scams means they were purposely, or out of abject stupidity, leaving them out. Bitcoin doesn't get to say "oops we can add the ability to stop scams later" because it should have been table stakes from the very beginning

But bitcoin was literally built to be free from regulation. Why is that?

Okay, but imagine instead recreating the system where the SLC happened vs continuing in one where it's been accounted for...

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