NYU Student Owns a $6M Crypto Mine. His Secret Is Out | Hacker News Reader

NYU Student Owns a $6M Crypto Mine. His Secret Is Out

nytimes.com

Odd. If one is trying to build an under-the-radar facility you would generally want to over pay contractors and keep everyone especially happy.

I’m glad his secret is out. I’ve had enough of Chinese money buying up properties in America and Canada. When will it end? When will the government take it seriously? It’s ridiculous that an LLC can own property but you have very few ways to cheaply find out who is behind said LLC

This system was set up this way to benefit the domestic ruling class. The fact that it might benefit foreign capitalist is incidental.

Why should we care where money comes from so long as it is legal and so long as there is not a national security concern? Should there be any preference for a private french citizen's money as compared to a private chinese citizen's? Isn't that one of the things that makes this country better than places like China which place all sorts of arbitrary restrictions on who can buy certain things there? I agree that the opaqueness of LLCs can be a problem but the fact we have such hysteria about a random student just because he's chinese smacks of racism. Those who are truly concerned about the malign influence that comes along with chinese money would do well to vote with their wallets and not support businesses that end up sending work to china in exchange for money (That and holding accountable the politicians who allowed china to exploit the system of world trade while not playing by the rules). That is your prerogative but the general fungibility of money in a ostensibly free-market system is a virtue that should be preserved.

I am assuming that GP was not specific about Chinese investors' money due to national security concerns or sinophobia. More pressing, especially to anyone hoping to live anywhere near Vancouver, is the fact that Chinese investors account for 1/3 of the total sales volume of property (2016 figures). [1]

[1] https://vancouversun.com/business/local-business/chinese-inv...

> Routledge compiled the data by extrapolating from a Financial Times survey of 77 high- end buyers and data from the U.S. National Association of Realtors

First, not exactly a large sample size. Second, how did this analyst know if the buyer was a Chinese citizen or just somebody with a Chinese surname?

For most industries and investments, sure. Shouldn't matter who owns what.

Property and real estate have a different utility, in that it provides one of the most foundational needs a person requires. It's not the same as a chinese investment firm buying up various asset classes, non-native investors buying up real estate that could provide shelter to native citizens is a problem.

> non-native investors buying up real estate that could provide shelter to native citizens is a problem

Aside from xenophobia, why?

In a time of plenty for everyone it's probably not so important.

But when there are constrained resources it generally makes sense to look after the locals first, before providing for non-locals.

You only feel that resources are constrained because local governments and NIMBYs work to set the policies that make them constrained. Instead of blaming foreigners, you should blame them.

Are you projecting? :)

It's an obvious national security issue and avenue for potential economic coercion. It also has significant negative externalities for the local economy. For example, good luck convincing a software dev to relocate to Vancouver when a basic detached house costs a couple million dollars. It makes industries that actually produce things uncompetitive compared to services facilitating rich foreigners' asset flight.

It’s a national security issue to let people buy houses? Excuse me while I clutch my pearls tighter.

It’s only a problem because we aren’t building enough new housing to meet the demand. You are blaming a symptom instead of the disease.

Or, there's always been more than enough housing in many localities for the local demand, but those people are not buying houses because they've been priced out by sophisticated investors who are not local, are not especially interested in the long-term development of the locality where they are buying, and who will almost certainly not ever be a resident.

OK, but most of those “sophisticated investors” rent out their property to generate a return on their investment, so no net housing is lost. In addition, these investors who you claim are not residents are paying property taxes that fund local services like firefighters and schools while not themselves consuming those services. So why is this necessarily bad?

> rent out their property

> are paying property taxes

Call me prejudiced, but I went from renter to home-owner in the last half-decade and I don't see the rentier class as really contributing in excess like you do.

I live in a Midwestern city where many of the rentals are owned by one singular corporation, and there are several such corporations, and I don't know what all the properties are like. I have a myopic view because I've only ever rented one house in this city, and only ever owned one house.

So I'll give you my one anecdote, because it's all I got. Tl;dr: we're paying those taxes, even though we should be saving a boatload because of our primary residence exception, we're still paying more taxes than a comparably priced house that we used to rent. It's a much nicer house, but by the numbers I do not get the sense that property renters are paying more taxes like "they're supposed to be." (But if I became a rentier and bought a second home to improve, rent out, and maintain, then I would pay those boku taxes; sure!)

We paid almost $200k for our house, a steal because we bought it in 2020. It has appreciated by almost 20% in two years. (We're not selling, so that doesn't help us any.)

We rented a house before we bought this house. They don't maintain the property, they did re-rent it; I'm not sure if it's empty today, but they definitely kept the house full for the past three or so years mostly since we left.

It's in poor condition because they count on renters to maintain it, and the renters rarely have any interest in maintaining their rented property. So it looks like garbage and the assessed value is not likely to increase, based on there being no improvements.

But the property is valued somehow at $275k in spite of nothing having changed. The house I lived in when I was renting, has been listed for sale for the last month at almost 4x its tax-assessed value. That house was assessed at less than $40,000 when we moved in, the tax assessment is up to $75k, listed for $269k – they do not get any primary residence exemption, but their assessed value is less than half mine so they pay 14% less than I do in taxes. Do you think it will sell?

The rental house is paying less in taxes, but that house has been listed at 20% more than our new house is worth. It probably will sell for more than we paid, based on the potential for rental income; it has a marginally better location and 30% less sqft than our house, so there's no basis for that price. But I bet you that it will sell, for at least 80% of the asking price, and that assessment won't be updated for years "because that's how long it takes."

It isn't worth what they're paying/asking, unless they jack up the price and re-rent it again! (They will...) And they will never pay property taxes on a sale price or on a lease price, property taxes are based on an assessment value. An inflated sale price with no improvements does nothing for assessed value, nothing for tax revenue, it's wholly based on the rental price bubble that can stay inflated and keep going as long as we're a college town, (as long as college prices keep going up!)

I have one anecdote and to me it shows the bad pretty clearly. I'm not sure how clearly I explained what I perceive is wrong, but what I'm saying is they are really taking money out of our collective pockets and it's not going towards taxes.

I should probably just put the clown makeup on, I am not going to convince you of anything; if you're starting with the belief that sophisticated investors from outside of the community buying up houses and renting them back out to people in the community aren't creating a net loss while they generate a return on their investment, then you haven't interrogated the situation honestly.

Their (outside investors) return is axiomatically the net loss to the community.

If we (residents) weren't paying it out to these investors, then we'd still have that money here in the community, going into savings of people that live in the community, or getting spent in the community. You think they're going to pay taxes, and well, as I see it we just aren't set up to operate like that! Not at all. The law notionally taxes non-primary rentals or non-residences at a higher rate than residences, but for reasons I can't fully convey and don't truly understand, it typically, seemingly, doesn't work out like that.

I don’t have time for a detailed response but I just wanted to make one point.

> Their (outside investors) return is axiomatically the net loss to the community.

This is false, it is not a zero-sum game. Just because an investor makes a return doesn’t mean that somebody else loses. The same as investing in the stock market isn’t a zero-sum game. You shouldn’t have such a myopic view of how the world works.

Well, I told you I knew it was a myopic view. I understand that investor can come back, and I know they might try their luck again.

I appreciate your frank response, and I'd be willing to read if you find the time to tell me what else I should understand! (If we got our tax policy in order... no, that's not where you were going is it!)

It’s not ostensibly a free market. It’s not a free market at all.

They’re are also many parts not worth preserving for many reasons.

THat's an easy answer as I've seen first hand why.

It comes down to how transparent a country is and how much rule of law there is there for poeple who are outside of that country.

To use your example, there isn't a lot someone in North American can do to track down and get a debt paid by someone in China as the banking system will not cooperate, and the legal system will not cooperate.

France on the other hand tends to use the same banks and has very close legal ties so the legal system and the banking system will both cooperate in a way that you could never get from the Chinese legal or banking system if someone from that country owes you money and has assets in France and a North American court has a judgement against them.

If a North American court has a judgement against a Chinese citizen residing in China, how cooperative do you think their legal system or banking system will be?

So yes, which foreigners that own property can matter a great deal if there is ever a dispute with them.

You can still get a judgement against them stateside and put a lien on the US property.

You can, but you can't get environmental damages corrected, liabilities and damages covered (if say, they caused a fire or disaster in a community), or debts re-paid (if greater than the value of the property). Lots of issues with this. Chinese firms have bought a significant amount of US infrastructure, so it's also a national security issue.

https://americafirstpolicy.com/issues/20220906-u.s-infrastru...

This is a good point, but extends beyond individuals to companies as well, and seems to justify a pretty clear decoupling between China and the rest of the world until China is willing to play by the rules. Should we also then extend the guidelines that constrain foreign students from studying certain subjects in university (historically by not letting certain US government funds for research grants etc pay for those foreign students). It is obvious that China exploits the US educational and research system in a way that doesn't benefit us in the same way, apart from hoping that some students would stay and become productive members of society here who have no interest in funneling IP back to China.

How can you find out if it's a security concern and wether or not its legal if you don't even know who it comes from???

And then there are anonymous LLCs

https://wyomingllcattorney.com/Blog/New-Mexico-Anonymous-LLC...

I wonder what kind of equipment is in those little pods? How does the cooling work?

tl;dr a Chinese guy bought a bitcoin mine with Tether which is super duper dangerous because the banks weren't in the loop.

It’s dangerous because not being able to track widespread ownership of major in-country assets by a geopolitical adversary puts one at a disadvantage; it’s dangerous because it makes it much more difficult to ascertain that the proceeds of criminality are not being used in purchase of those assets - just to name a couple of the reasons.

So why are foreign nationals that are not permanent residents or citizens allowed to own property? At the very least they should have to register their land property purchases with some department. The problem here isn't actually the money used, it's the fact that the US does not genuinely care if foreign agents own property inside the US.

Wonder if it's normal in China to underpay and/or delay payments to contractors - so the Chinese investors just brought their way of working to USA or if there's something else going on.

My understanding was that a US owner contracted aspects of the facility construction and neglected to pay the contractors, then sold the completed facility to the Chinese investors.

It sounds like the original owner's contractor is alleging that the Chinese investors are also not paying them for services at the mine, while the Chinese investors are claiming the contractor failed to deliver?

It's not really clear from the article who is even ripping who off to me.

My impression as well. It seems to be typical mismanagement of the mine's construction, or people disagreeing on contractual aspects, where the responsibilities stop, etc.

> It's not really clear from the article who is even ripping who off to me.

Least scummy cryptocurrency story.

It’s the other way round. See “getting the factory pregnant”—working with manufacturing partners in China and then delaying payment until after they’ve paid for your work to gain leverage over related work.

Contractors and suppliers often face payment issues globally.

In Texas, when contractors work on a property, they are entitled to lien rights. Normally, property transactions involve a title company. One of their roles is to ensure the clearance of liens and manage the escrow of funds, transferring the purchase money from the buyer to the seller once they have established clear title. Additionally, they provide title insurance to the new owner, guaranteeing a title free from encumbrances like construction liens. This process is crucial for safeguarding the interests of all parties involved in property transactions.

Its hard to tell who is in the right without more facts. But it is clear the way the transaction was handled is part of the problem.

Conversely, Texas mechanics liens have little recourse when a property owner encounters a contractor acting in bad faith. I recently assisted a friend challenge an improper lien on their homestead in Dallas when a plumbing company quit the job halfway through because they couldn’t use their epoxy repair technique and walked away. The contractor filed the lien for the total amount agreed upon because state law makes it trivial to do, and it is an uphill battle to challenge a lien. It only worked out in the end because we had accumulated a paper trail via email and sms messages with the contractor, and reported them with said evidence to the state licensing apparatus.

If engaging contractors in Texas for property work, get everything in writing and have an attorney familiar with construction law at the ready.

I've experienced the same thing. In commercial projects in some places, the contractors actually just file liens right away "as a matter of practice". They automatically expire 60 (or some number of) days after the last day of work on the project, unless it is "perfected" by filing an actual lawsuit. At least that is the case in Canada. That seems to at least shift some of the cost and risk to the lien filer as they must pay for a lawyer, be ready to prosecute, etc.

> In commercial projects in some places, the contractors actually just file liens right away "as a matter of practice".

Sounds like a great way to get themselves black listed.

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