The FBI created a coin to investigate crypto pump-and-dump schemes
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I find it interesting that they made up both "NexFundAI" and "NextFundAI" (with a t) with some sort of made-up relationship between the two.
still worked though. guess there is a market for that, too.
“Now the first thing to say is that this is definitely not Pyramid Selling, ok?”
I feel like law enforcement always uses the option which produces easy prosecutions rather than the more difficult option that involves complex investigations that has more risk but more likely to produce long term good.
My concern is the FBI doesn’t actually try and determine which is the best allocation of resources but just presses the button that makes the FBI look best. Investigating real crimes is a lot more difficult than investigating these ‘sting’ crimes so if investigating ‘sting’ crimes was less efficient then it might be incorrectly priotized.
If the FBI threatens your family to get you to commit a crime, that’s entrapment.
If you pull up to a sex worker and proposition them, but it turns out to be a cop, that’s not entrapment. Because you were looking to commit the crime.
Look at the majority of the replies to your comment. Now imagine twelve of those people on a jury and a defendant who isn't mother teresa.
That's how.
It's just not entrapment. If an FBI agent sells you a baseball bat and you kill someone with it, that's hardly entrapment.
There's lots of actual terrible things the FBI does that there's no reason to make something out of nothing.
The quintessential example is a bait car with the keys in it. Every real car theif walks right on by and after a week of it sitting there they nab some teenager with a weed dealing prior and then throw the book. Yeah, he did steal it but he probably wouldn't have if he didn't walk by it sitting there with the keys in it for an f-ing week. Frequently when it's "real crime" they're going after informants are involved and that often muddies the waters a lot since the informant is usually trying to get a break on some other charge.
So you're just making up that they did that here because your gut says they usually do that?
> The quintessential example is a bait car with the keys in it. Every real car theif walks right on by and after a week of it sitting there they nab some teenager and then throw the book. Yeah, he did steal it but he probably wouldn't have if he didn't walk by it sitting there with the keys in it for an f-ing week.
We're looking at multiple individuals collaborating long-term saying they can "control the pump and dump" and do "inside trading easily." These are just scammers doing scam things.
You can see the direct quotes from guilty party. It's hardly a gray area like a teenager entering a car with the keys inside. It's adults telling uninvolved people that they intend to break the law, encouraging others to do it with them. It's pre-meditated over a span of many months. There is nothing an FBI agent could have done short of force them to say these things at gunpoint that would even approach entrapment.
Unless you're just asking for carte blanche crime because you're willfully ignorant of what entrapment is.
A bait car isn’t entrapment either. I don’t think you’re understanding the term.
Making a crime look easy is not entrapment. Putting on a short dress is not “rape entrapment”.
Entrapment debates are also a pretty good opportunity to apply the average person heuristic. Would the average person likely steal a car if they saw the keys sitting inside? Probably not, so someone who would do that is arguably predisposed to committing the crime if presented with the opportunity.
Now there's a very valid argument to be had about whether or not it's a good use of police time trying to catch lazy criminals (i.e. those that are willing to commit a crime but only when it's super easy). But that's a police policy discussion, not a legal defense. The criminals in those situations still deserve to be charged.
So they created a coin to pose as a customer of this service.
It’s just not entrapment at all, it’s not similar or close to entrapment either. It’s analogous to posing as a drug dealer to bust money laundering services, or posing as a car thief to bust a fencing operation.
The crime was committed. So the burden of proof falls on the defendant to demonstrate entrapment, which only happens if they can make a convincing case that they were not otherwise inclined or likely to commit the crime.
That's quite difficult to do when, in fact, they did commit the crime.
I think the standard should be stiffer: it should need a preponderance of evidence (not proof beyond reasonable doubt) that the defendant either also committed similar crimes, or was demonstrably predisposed to committing the crime in question.
I rather suspect that the defendants in this case would not be able to mount that defense either. But I've grown quite tired of reading about the FBI hitting up some random resentful teenager and talking him into buying a fake bomb.
That seems to be true here. They didn’t just set up a bait car, they followed it to the yard where the thieves stored their other stolen cars.
Police are allowed to set up stings . if you walk in to a crack house and willingly buy crack, thats on you. You broke the law and there was intention to do so.
If the government say, gave you money and told you to invest it with their friend at glowcoin to dump it, that would be entrapment.
Local us government agencies at the state level routinely get slapped down for entrapment. The FBI, not so much...
If they set up that crackhouse in a neighborhood with no crack, where no one knows where to get crack and there are no users...
Then the person walking in wouldn't have been doing so if they didn't set up the trap in the first place.
Giving it as an option.. allows a crime to be committed that otherwise wouldn't.
Creating a coin to investigate pump & dumps is not entrapment. That's a legal action, and one that many legit people and businesses do. It's akin to standing up a server on the Internet to see who hacks it.
If they approached a market maker who was not otherwise marketing pump & dumps and said "Hey, I have this coin, can you pump it up so I can exit with a profit?" and the market maker replies "This is not normally something we do, we're not interested" and then the FBI keeps approaching them with progressively higher prices until they give in, they'd have a good case for entrapment. If they threaten the market maker's family, it'd be a very good case. But note that even if it's the FBI doing the approaching, but the market maker just says "Sure, here's the price", it's still not entrapment. In that situation they're still clearly willing to commit crimes.
https://en.wikipedia.org/wiki/Jacobson_v._United_States
They tried to push him into ordering CSAM for years, with fake penpals, fake advocacy organizations, fake catalogs, etc. Gave up repeatedly, but after three years they finally got him to bite.
hilarious, but running an operation of this scale to only charge 18 people? this is like squishing a few individual ants, then going on a victory lap bragging to national media about what a canny and clever exterminator you are. great job cleaning up 0.0001% of the market 10 years late!
> And no cheating by writing a law that laws don't apply to you.
If you want to be upset about government overreach, look into Richard Glossip’s case. He’s been on death row in Oklahoma for decades for a murder even Oklahoma agrees he didn’t commit, based on the false testimony of the actual murderer.
Any actual utility imagined for cryptocurrency has yet to materialize in any significant quantity despite nearly a decade of tech bros telling me it’s coming any day. I’d bet less than 0.1% of good and services are actually bought with it. (Optimistic estimates are 0.2%). So it’s clearly not primarily used as currency. You can’t eat it and it doesn’t pay a dividend.
It’s just people pumping and dumping and other people hoping to time their purchases and sales along with the pump and dumpers.
> I’d bet less than 0.1% of good and services are actually bought with it. (Optimistic estimates are 0.2%).
this also applies to nearly every 'normal' currency
If somebody put all of their liquid assets in any major fiat currency and lost half of it in a couple months you’d be surprised. If that happened with a crypto currency you wouldn’t.
Which goes back to my statement that any benefits beyond gambling are only theoretical and haven’t actually materialized in 15 years of being told it’s coming any day now.
this is in fact the majority use-case when i refer to people disciplining their central banks -- savings are converted to stablecoins pegged to the dollar etc. there is no alternative system that ordinary people have access to; buying dollars at a foreign exchange business is regulated and incurs punitive fees to prevent this from happening.
But one use is to get around currency controls / manipulation by the government. Not a big deal in EUR/USD countries, but some places limit how much money you can take with you outside, or occasionally invalidate their old currency for a new one altogether.
If you get enough shares you can force a dissolution of the company and get paid the proceedings.
Of course that only works for stocks that are not overvalued, but stocks in that territory are for gamblers only anyway.
Yes, you can. If you are an UHNWI your private banker who also manages your portfolio will organize cash loans to you and your family using the shares as collateral. It just shows up in your bank account and you pay your bills, go eat out and live off that tax free income. If you don't have major equity holdings (say a kleptocrat living in London who, coming from the wild-west has an aversion to publicly listed equities) your banker will do the same but using your real estate holdings, yachts, etc. as the collateral.
>Value is what we assign to something collectively. It’s not a measure of some intrinsic reality.
I beg to differ.
And a similar argument could be made that Bitcoin creates value for its customers. You might disagree with that but the people buying bitcoin would probably disagree with you. To me that seems like subjectivity.
Similarly for AAPL and MSFT - the stock price is a measure of a gamble on future earnings not how much value they create for their customers. Indeed high margin businesses like AAPL shouldn’t even exist under an intrinsic theory of value because a large part of the 30% markup is because of social cred and network effects. That’s not really value creation.
> I beg to differ.
Can you please describe it in more detail because this directly contradicts what little I know about economics.
If I’m understanding your position, it seems like you’re arguing that value is some intrinsic property.
That mechanism however is rejected in the Wealth of Nations, because of things such as the diamond-water paradox. Diamonds are fairly useless (or at least were moreso when the treatise was written) but still cost more than water which is crucial to life. If value is represented of the intrinsic value, why would that be?
This paradox is interestingly resolved by the subjective theory of value which has a similar solution to marginalism which says basically that while the first units of water are valuable, if you have excess of what you need it you won’t want more. Whereas because diamonds are rare you will want more of them and are only bounded by your storage constraints.
https://en.m.wikipedia.org/wiki/Subjective_theory_of_value
> A combination of both labour and subjective theories can be seen in the formulations of English economist Alfred Marshall. He argued that prices are determined by both the objective costs of production, the supply, and the subjective utility of consumers, the demand. This approach is in line with the modern conception of how market prices are determined, where both the demand and supply curves intersect.[9] This is in contrast to other 19th century theories which view costs through a type of subjective value lens. Since the subjective value holds that buyers use their own value judgements, the same goes for sellers, and thus the mechanism of production. Austrian economist Ludwig von Mises believes that production costs are determined by a seller's evaluations of their opportunity costs, or the sellers "marginal utility lost of having fewer of that good".[10] Under this, supply curves are also set by subjective preferences.
So it’s pretty well established economic theory that the important factors for value are the perceived value of something (demand) and the cost to produce it (supply). But there’s no objective intrinsic way to measure value because it doesn’t exist as it’s a product of supply (objective based on cost to produce) and demand (subjective based on perceived value).
Bearer shares were once a choice tool for cross-border money laundering. Once commonplace, now outlawed or neutered virtually everywhere on earth. What you are describing is money laundering. It is a crime. We are not debating whether it should be considered so, or that all engaging in it are the bad guys (some are ordinary wealthy/middle class fleeing warzones/regime-change/political persecution), but it is ridiculous to use this as a line of defense for the existence of something.
Imagine using BBBY shares as a store of value and you have pretty much the same situation.
However, if things change too drastically (the power grid goes down), then CCs are completely useless anyways and we'll be back to bartering. So I'll keep a good stock of Monero, and an even larger stock of things people value in a crisis. Guns, ammo, tools, food, water, medicine.
A total myth. Only occurs in places where a peg is established to currency outside the environment, e.g. prisons. The very few anthropological examples of bartering occur between travelers who do not meet each other again for mutual fear of jealousy.
Debt: The First 5,000 Years is required reading: https://annas-archive.org/md5/af5cf10f842d46b32a893be4ff52ba...
What happens after apocalypse is people return to providing goods and services on credit. Once every month a communal reckoning brings the community together and debts are cancelled out in a circle. If you have lived in a small eastern-European village filled with hen-farming babushkas, beekeepers and craftsmen as I have in Hungary you will recognize this to an extent even today. The commoner's social life and trade is inexorably linked.
Even the wholesale traders who did make use of cash only settled using it once every few weeks or so, reminiscent of the hawala, fei chien (Chinese flying money), and other ancient mirror transfer systems. While debt was nominally denominated in it among peasants, only standing armies (Rome & USA), mercenaries, criminals, and nomadic peoples/traveling merchants ever held on to cash for longer than a moment.
Acceptance of money to settle debts is the legitimacy of a state's monopoly on violence expressed in units.
Why would I give you a sandwich for your monero in our fallout scenario? Monero is only worth anything today because someone will buy it from you for dollars. Why are dollars worth something? Because the U.S. Gov requires you to accept it for debts and they control the printing of it. If the government loses the ability to enforce that everything reliant on it falls with it. They are able to enforce it by way of the most powerful, violent standing army the world has seen.
I don't really know what to say to the bartering point. People want valuable and scarce things they don't have in exchange for valuable and scarce things they do have. How that's a myth to you is beyond me.
> Any actual utility imagined for cryptocurrency has yet to materialize in any significant quantity
Is false, to the tune of billions in remittances per year. Normally when the number starts with a B we do consider that market significant.
> It’s at $60,000 because Americans gamble on it.
It's at $60,000 because speculative investors are taking a position on its future value being higher than its present value. You don't agree with that position and that's fine. To me, that position seems rational, looking at past performance, and considering the odds that the sort of financial instability which makes Bitcoin useful for remittances will increase over time. Clearly if you don't see it that way, you speculate on some other investment vehicle. Stocks perhaps.
It's odd to take a look at a 15 year old growth curve which consistently pumps more than it dumps and call it a pump-and-dump scheme. But you do you.
Bitcoin was created as a gigantic middle finger to the various governments, worldwide, ever printing more money out of thin air. This has been made very clear in the message encoded by Satoshi in Bitcoin's genesis block:
"Chancellor on the brink of second bailout for banks"
From there everybody was free to side with cypherpunk anarchists and to mine Bitcoins or to buy Bitcoins.
Now I'm not disputing there have been lots of pump and dump.
I'll list two examples...
Without squinting too much the following for example is one kind of fraud: although SBF and FTX had already been exposed (by a famous short-seller) for the complete and utter scammy fraud they were, "journalists" at the NYT kept writing articles about SBF as if he was the second coming of Christ. Not surprisingly SBF had parents very well connected in NY and raising tens of millions for the dems. This, too me, is not far from a criminal organization (SBF/FTX/his parents and their accomplices at the NYT) actively defrauding people. One may dispute what's "pump and dump" (FTX was known to pump and dump a lot) but the NYT's articles certainly lured many into FTX, which pumped a great many shitcoins, and then, poof, all the money disappeared.
Following that even, the very Chamath Palihapitiya said that VC from SV had to look very deep into the way they were functioning because they actively took part in a great many pump and dump of shitcoins (he criticized for example lessons being given as to how to create coins).
It's nearly as if the biggest of the biggest of the pump and dumps were organized by well-known and well-respected entities and not by the cypherpunks who originally created Bitcoin no!?
As for an actual usecase, I'll leave this here:
- Turkey inflation rate in 2022: 72%
- Venezuela inflation rate in 2022: 234% ("slowing" down from previous year)
- US government public debt: soon to reach 36 *trillion*
Now physical gold is something lots of HNer used to make lots of fun of in the past. They're probably not laughing that much now that central banks are stockpiling physical gold and that gold reached new all-time highs.
So I'd suggest this: first wonder if you were one of these making fun of physical gold, thinking it was stupid. Then wonder if you were maybe wrong or not. Then wonder if "digital gold" is really that crazy of an idea?
If you were worried about rampant inflation or government default, you could hedge in any number of other ways that don’t routinely experience massive fluctuations and still pay interest.
Economists thought buying gold was dumb for many decades, and still do. You can find some time periods if you look hard enough where gold outperformed the stock market but you have to really stretch to make a case that it’s a trend.
https://www.reddit.com/r/FluentInFinance/comments/16upmcj/go...
That’s about what I expect bitcoin will look like in the future. (Kind of already does.) If you bought them in the early days you made a fortune, now they’re mature and they’ll never rapidly appreciate again.
Real estate has intrinsic value. Companies have inventive value (usually). Both of them can be used you give you a return even if you don’t sell.
Here, they are blatantly fraudulent. They trade between themselves, using fake generated wallets.
But what about Jump Capital? They have a crypto division that also does market making. The difference here is there are given a large chunk of tokens to market make with, as they please. Doing arbitrage through MEV (Which is just a collusion agreement between the mevbot and the miners), Buying at low points and dumping at high points.
At what point does convulusion and complexity create enough of a "Market Maker" vs. Trading with yourself.
trading off the same signals is collusion on "Signal sharing".
Creating MEV bots that take advantage of arb opportunities in the pool is insider trading.
Having significant equity in the company, but no financial interest or obligation to disclose dumps?
It may be a little early to make that comparison. Jump is still being investigated for its crypto shenanigans.
Such entrapment.
Very problem.
Wow.
AI workloads could be an actually useful piece of "work" that there can be "proof" of.
EDIT: maybe I had assumed too much about the technical feasibility...
1. The answers have a value uncorrelated with the price: either the problems are stupid (just like BTC's are) or they're so much more valuable than the mere mining reward that you'd do it anyway, with very little "correctly priced".
2. If the problems are completely arbitrary you get all the stupid spin-off coins just like we saw with cryptocurrency; and if they're not completely arbitrary then you vary between having lots of new problems and hardly any in exactly the same way that gold mines were suddenly found and then got mined out back when the gold standard was a thing, and IIRC that's one of the reasons against the gold standard.
Why can't you solve the high value problems by having the person who wants their problem solved bid to have the miners solve their problem instead of someone else's? Then the mining reward includes the bid and stays high as long as people are willing to pay to have their problems solved. Transaction fees are near-zero because the miners are paid by the bidders, and the amount of hardware you need to do a 51% attack goes way up because mining is more profitable this way so there is more competition.
Crypto on the other hand generates as more and more work as more miners join the network, so that the overall time taken remains constant. This is an essential part of the system, to prevent improvements in technology devaluing all previously mined crypto.
The two have a fundamental incompatibility.