Winklevoss twins secretely withdrew $280M in assets before crypto firm collapsed
nypost.com
nypost.com
They are talking about Gemini, the crypto exchange the twins ran. They withdrew funds from Gemini before Gemini collasped.
Gemini the actual NYC-compliant exchange is still solvent (and afaik still compliant)
Totally not relevant to anything here so I understand if this gets downvoted, but fun anecdote.
This is because whoever knows the private key to a crypto wallet is the owner of the funds. Usually, exchanges don’t give you access to the private key(s). And even if they did give you access, it’s still not safe because there’s nothing stopping them from moving the funds to a different account without your knowledge.
I wouldn’t recommend buying crypto unless you at least have a decent understanding of public/private key crypto
ftfy
Genesis's lending operations are what collapsed.
I wouldn't recommend giving your hard earned money to people in an unregulated market.
If we didn't have banking regulations, bankers would run off with your money - and when they did - you'd be left with nothing.
At least with FDIC & SIPC - you're not left with nothing when they run off.
> What does the crypto have to do with it?
The fact that crypto doesn't have those regulations.
Can you share the jurisdictions that are starting to regulate it?
Crypto people want it to mean, "We continue to do what we want to do, but claim to follow regulations." Meanwhile everyone else means, "You follow KYC and AML regulations properly. So you shut down criminals. Can reverse transactions when ordered by a bank. And have sufficient knowledge of who you're dealing with to help law enforcement in a practical manner."
Crypto people respond, "But once it is cryptographically signed on the blockchain, it is final! And wallets are designed to be anonymous! We want to be regulated, with regulations that make sense for crypto!"
Sorry crypto. You can't have your cake and eat it too. Right now you're an attractive nuisance for criminal enterprises. There is no particular reason why society should want crypto to be part of the financial system. There are good reasons to shut down crimes like ransomware.
haven't seen that proposed yet, but stranger things have happened regarding what the FDIC covers
How do you regulate Bitcoin like you regulate dollars in the bank?
That's what crypto has to do with it.
I'd extend it to regulated as well. As soon as we're deprived of the ability to own usable cash - we'll be left with mere illusion of ownership.
CBDC is the final step to modern slavery.
For example, people that had their crypto on MtGox were still able to file claims for their funds in bankruptcy proceedings
And a lot of them have also been able to sell their claims, for more money than their BTC were worth when MtGox collapsed
At the same time, there’s plenty of stories of individuals loosing their keys, forgetting their paraphrase or getting hacked
Crypto can be pretty risky, regardless of how/where you store your funds
Like my bank has my money as well. If possession is all that matters then they would own it too. But luckily there are laws that say that they don't and a bank CEO that withdraws customer funds before a bank collapse is going straight to prison.
courts move slow. how long did it take to see Elizabeth Holmes get convicted?
10 years later, I'm still waiting on MtGox bankruptcy proceedings :o)
Technically the creditors losses are “crystallized” at the time of bankruptcy and if the organization wanted to push it, could make the creditors whole and end up with the remaining value.
Sometimes this happens in real life where equity holders end up getting some payments post-bankruptcy liquidation.
As I understand it, mtgox is going to go through a procedure to pay out the excess to the creditors anyway, which probably further delayed things.
Many bankruptcies take a significant period of time. Even Bernie Madoff creditors continue to receive distributions from the estate.
Everyone I know who had funds on MtGox at the time of bankruptcy, ended up selling their claim (most to Fortress), for a pretty good amount, in fact more in USD than what their BTCs were worth at the time of bankruptcy
(Obviously there’s an element of risk and discounting of future returns, but I’m sure the claims buyers know what they’re doing. They’re not in the business of taking Ls)
If the people that sold needed the money, they are for sure better off, even if they got less money than waiting
Additionally, it’s impossible to know if they invested it in something that gave them better returns than waiting
Fortress might know what they are doing, but for sure they can’t exactly predict the price of BTC or that there would be a pandemic and the behavior of the markets during the pandemic
Potentially someone that sold in late 2019 and put their money into TSLA, NVIDIA or even Moderna, might have made more money than and unknown figure they could get when the bankruptcy proceedings finally pay out. If they exit(ed) the market at the right time
I think it’s a good trade for both sides, no need to have a winner and a loser
But hey, sometimes the hedge fund has a better job acquiring "dumb" money and pays more than claims are worth just so they can get their cut.
Ransomware victims would disagree!
You may not think particularly highly of ISIL or North Korea, but they still bid in the global marketplace! North Korean counterfeit 100's are of /very/ high quality and accepted globally.
Alls I'm saying is that Markowitz' portfolio diversification strategy is still viable.
I heard that actually applies to normal banks too. Once you deposit your money, it’s now their money with a promise to repay you what you deposited.
These are the ownership categories: -Single accounts (owned by one person). -Joint accounts (owned by more than one person). -Certain retirement accounts, including IRAs. -Revocable trust accounts. -Irrevocable trust accounts. -Corporation, partnership and unincorporated association accounts. -Employee benefit plan accounts. -Government accounts.
If you were to open a single account at Wells Fargo with 250k in it, you can also open a joint account with 250k and have it insured. Then, you can go to Bank of America and do that same thing.
Also, I'm not sure if America has ever enforced the cap, but it's safer to keep it under 250k per ownership category.
Even better, funds don't have to exist to show them on a screen. Numerous exchanges collapsed because the stated funds weren't in the exchange in the first place and what the traders actually traded was numbers in a MySQL database when the actual funds they sent to the exchanges were being bet on somewhere else.
The sad reality is, for most people in the trade crypto assets are whatever the screen says.
- Gemini is based in New York and is regulated by the New York State Department of Financial Services. Gemini was granted a charter to operate a trust under the NYSDFS.
- Gemini is still alive and operating, regular crypto and cash in the Gemini exchange can still be withdrawn by users. Users that were participating in Gemini's Earn program lent their money to Genesis, which went belly-up, and they are now creditors of Genesis.
Users opted-in to loan their money out. Sometimes you loan money and it doesn't get paid back, that's life. The real question of Gemini's legal trouble comes down to two things:
- Did Gemini make it clear to customers that money they put in Earn was lent to counterparties that may not pay them back?
- Did Gemini do proper due diligence on behalf of customers, and did they continue to allow deposits into Earn even if they had reason to believe Genesis was insolvent?
The reason the 280M withdrawal is news is that it may indicate they knew Genesis was insolvent before they closed the Earn program. However, the twins claim it was Earn customer money that they withdrew, in which case it may be a good thing (managing risk if they suspected Genesis insolvency). We don't know for certain whose money it was at this point, all we know is that 280M was withdrawn, everything else is speculation.
Some of those titans are not the most...ethical characters.
We already have laws regulating a lot of this stuff...
All my Apes gone.
you don't need a regulation to look around when you’re at an ATM, cover your PIN number, and double check that you’re logged out, and check your wallet’s presence over and over again, none of the many regulations helped here and there are many similarities: people learned the best practices with new technology and followed them
yet again, now we see why the financial markets need scrutiny.
in the late 90s most broad media references to "computers" were about the viruses and things that went wrong, those newly introduced problems didn't go away and only have increased in frequency and amplitude, we just choose not to make international headlines about them anymore and talk more about what's being developed and working as intended
this dictated whether they wanted to spend any energy learning that a different reality was also happening and possible, this dictated whether they wanted to invest their resources into personal computers or upgrades
you can argue the empirical quantity of my experience, it is also the same behavior described about people averse to crypto: the negative sentiment and actions they are bombarded with doesnt compel them to be interested in seeking a different reality
something something rainbow tables something
How is this news?
Source: I too am from their hometown. I know billionaires who keep working because they feel they don't have enough. A gentleman who lived down the street from me has grossed probably close to half a billion in his career (maybe more), yet still goes to work every day. Granted, he has kids to feed, and the Winkelvii don't, but the song remains the same. People just want more, and sometimes they get used to a lavish lifestyle, and can't quit the grind because they like the lifestyle it brings....when they have the time to enjoy it.
You don't believe me? You might have a relative who experienced hard times, and sure, that affects you, I get it. But you've or they have probably not seen what the Winklevoss twins have, or what I have.
You weren't raised in Greenwich Connecticut where you were an elite rower and your parents were Ivy League professors. Cam and Ty's parents were very well off, and their sons went to a fabulously expensive private prep school ($30k per person per year, could be a lot more actually) in a fabulously wealthy town. The "I might not have enough" mentality is flipped, and it becomes an arms race of "I have enough, but my neighbor has much more" and thus forms an inherently competitive aspect to life, and worse, to making money. You've got a few hundred million? Cool story bro, that's pauper shit, my friend's got a billion. You've got a billion? Good for you, the guy down the street has 5 billion. Where the twins (and I) are from, you don't get admiration for getting that money, you get a target on your back, and everyone wants to outdo you. THAT is the world those guys grew up in (I did too). Nobody just says "wow, I made a billion dollars, time for me to go buy a place on some remote island or on the beach and just chill out with my family and those closest to me", they say "fuck, I got a billion but this asshole in my church just made 2 billion, and I want to beat him".
Nobody is content, which is stunning to me. If I ever get that kind of money, I'm buying a shack in the mountains, and a hut on the beach, putting a bit in a trust for my nephew, and donating the rest. Fuck the rat race.
I don’t understand, especially on an SV-dominant board, this “anyone who has more than me is necessarily evil” mentality.
No, and particularly not my "conspicuous consumption" which is what I said.
> this “anyone who has more than me is necessarily evil” mentality.
That's not my mentality. I didn't say necessarily evil or even evil.
I'm postulating on the motivations of people who have access to every material comfort they could ever want, but still want 1000x that because someone else has 100x that. I'm nothing like them, nor the people in my wealth range that seem to have similar motivations --splurging on status signaling, doing anything to get more. It's irrelevant that I am richer than 3rd world people.
I mean, it is. There are multitudes in rural Asia and Africa who don’t have a fraction of a fraction of what you have and would regard most of your consumption as “conspicuous”.
And you may not have said the word “evil”, but your intent was quite clear. I’m suggesting that, as I said, your baseline for what someone has, and their baseline for it, are inherently different, and that ascribing motive to that doesn’t make sense.
Mostly, I think that pretending your ostentatious wealth is actually totally ok to flaunt, just because it’s yours and you don’t care about the people who see it as flaunting and ostentatious, is a moral relative, just like the one you’re suggesting is so bad.
They could do something good for humanity or something. But they don’t. This correctly raises eye brows and makes people question their motives.
Most folks on this board have vastly more wealth than I do - that doesn’t make them/you bad people, even if they/you pursue that raise and promotion at work. I dunno, I just think this recent tendency to call anyone with “more” inherently evil as a result (or to dog whistle at evil) is thoughtless, trite nonsense.
I'm not saying trying to be rich is bad. I want to be rich. But for most people, if you gave them enough money to never have to work again, but they would be permanently middle class, they would take it. I am very jealous of people that can do that. But eventually jealousy turns to suspicion. These people have enough money for their families and many generations after them to be better than middle class comfortable and they are doing shady things to acquire more wealth?
This is my point. If someone's got under 10 million, and a large family, sure, keep working, that 10 million will be gone in a generation if not properly managed.
Someone's got 100, 200, 300 million, has no family to speak of or whatever? Dude, take a fucking break and live a little. Do some good for your community, your neighbors, your friends, etc.
You've got over half a billion, just stop - you've won capitalism. Congratulations. Sleep in. Go take a walk in the woods. Cook yourself a meal. Read a book. Just stop slaving away, you're not going to really make a difference in anyone's lives but your own if you don't stop and look around you.