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Comment by floor2 | Hacker News Reader

What lives did he ruin?

The USA has an incredibly robust, tightly monitored and regulated financial market. The SEC, FDIC and associated regulators and auditors carefully control bank reserves, prosecute insider trading, prevent and insure against fraud.

Some people decided to opt-out of that system and send their money to an unregulated entity in the Bahamas to buy imaginary money without government oversight.

Honestly the government shouldn't have intervened here at all. The people who lost money should have been laughed at and told that's why you put your money in the regulated market. If you intentionally try to avoid taxes, anti-money laundering regulations, audits and securities law by buying crypto overseas, then taxpayer resources don't go bail you out.

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I agree. However, I think there's something to be said about how people don't understand what kind of protections are afforded to them by regulation.

A lot of these people were likely acting in some level of good faith, assuming that a company so big it could afford a Super Bowl commercial starring Larry David would never scam them. I know, it's stupid, but people don't understand where the guardrails are, what FDIC insurance really is, what sort of insurance exists on retail brokerage accounts, etc. And they didn't just lose money off of crypto losing value, they lost beyond that amount off of this business co-mingling funds when they were not supposed to.

But I do not feel that badly for anyone whose life was 'ruined' over this for one big reason: they were trying to get rich quick. That's the fact that underpins so much investment in crypto. BTC to the moon! SHTC to the moon! ETCC to the moon! These people were hoping for their 'investments' (speculative gamblings) to explode in value. And they weren't planning on sharing any of it with you or me, not beyond what they're legally required to through taxes (and sometimes, not even that, like you say as well).

I'm not sure I fully agree that we should just sit by and let them be robbed, but the point you make about the government doing nothing is an interesting one as it would be great marketing against a disruptive currency.

If you ask to borrow $500 and I give it to you, and you run off with the money with no intent to ever pay me back, did you commit fraud? Or was I just a rube who should have known better?

You seem to wish to live in a zero trust world model where everyone is out to scam everyone at all times and "caveat emptor" if you do get scammed. We should do our best as a society to not turn into that.

Caveat emptor. Emptor is “buyer”, caveat “beware”.

Caveat emperor: I’m not worried about being defrauded because my legions will beat up anybody who does so.

Thanks, I got caught by auto-correct. :)

I'm reading their comment as the opposite - there are mechanisms for a high trust society in place (which is good), but if you go out of your way to opt out of it then you're on your own.

The difference is there is no such thing as "unregulated" in the concept of fraud. Doing fraud is illegal. Even if FTX had done all the paperwork to be compliant, it would still be illegal fraud.

Same as there's no place where murder is allowed. You can't "opt out" of parts of society. It's not even "take it or leave it", society is "take it or get out of our reach"

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