News BITCOIN, Heists, Thefts, Hacks, Scams, and Losses

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The discussion highlights significant security issues surrounding Bitcoin exchanges, particularly focusing on the infamous Mt. Gox, which suffered a major theft leading to its bankruptcy. The exchange's management ignored critical warnings about its software's security flaws, resulting in millions lost and a tarnished reputation for Bitcoin. Other exchanges like Flexcoin and Canadian Bitcoins also reported substantial losses due to hacks and social engineering attacks. The conversation underscores the ongoing risks associated with Bitcoin transactions and the need for improved security measures in the cryptocurrency space. Overall, these incidents illustrate the vulnerabilities within the Bitcoin ecosystem that can lead to significant financial losses for users.
  • #551
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  • #552
(Bloomberg) -- Sam Bankman-Fried’s trading house Alameda Research had a secret speed advantage when executing orders on his now-collapsed FTX crypto exchange, according to the US Commodity Futures Trading Commission.

Alameda, which also tumbled into bankruptcy last month along with FTX, was able to skirt certain portions of the exchange’s trading architecture and sidestep some automated verification processes, the CFTC said in a complaint filed Tuesday in Manhattan federal court.
https://www.yahoo.com/finance/news/ftx-systems-gave-alameda-trades-055134191.html

SBF has a heapin' helpin' of trouble.
 
  • #553
morrobay said:
Understood: Just saying they both coulda, shoulda, woulda.
Not that I worry about it, but are you saying that you wish for a large scale thief to get away from the consequences of his actions?Although I agree if I was him and realized that I'm about to get at least 10 years behind bars I would probably take a route B after my massive crypto defrauding scheme goes bust.
The question is why he isn't running , is it because he suddenly has become a devout christian and is willing to pay for his sins or the more likely option that maybe he thought till the very end that he could somehow clean up this mess and save his name to a degree. But if that's the case I have to say his very naive. I have a hard time believing a man who managed to get so far even with thievery and questionable intent can be so naive.
I guess time will answer these puzzles.
 
  • #554
artis said:
The question is why he isn't running
He's under arrest.

More damning information
https://www.yahoo.com/finance/news/ftx-executives-used-korea-account-214446326.html
(Bloomberg) -- A GitHub account bearing the name of former FTX executive Nishad Singh authored code that hid Alameda Research’s ballooning liabilities on the now-collapsed cryptocurrency exchange, according to internal documentation reviewed by Bloomberg News.

The documentation, in the form of comments associated with specific lines of code, offers clues to the origins of a mysterious account on FTX that a regulator alleges helped mask mounting debts of its sister trading firm Alameda Research. The relationship between the two firms, and alleged misuse of FTX customer funds, led to criminal charges against founder Sam Bankman-Fried.
. . .
The code and available information could be used to show intent.
 
  • #556
A new horror series:
1671126431441.png
 
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  • #557
Astronuc said:
He's under arrest.
That is only for the last couple of days. He was free for like a month after FTX filed for bankruptcy and given he knew what he was doing and where it was all heading I'd say he was well aware of the possible outcome at least a month prior to that , so at least two months. I mean plenty of time.
 
  • #558
artis said:
Not that I worry about it, but are you saying that you wish for a large scale thief to get away from the consequences of his actions?
That isn't how I read @morrobay 's post, at all.
 
  • #560
gmax137 said:
That isn't how I read @morrobay 's post, at all.
I might have got the wrong impression that's why I asked.
 
  • #561
artis said:
That is only for the last couple of days. He was free for like a month after FTX filed for bankruptcy and given he knew what he was doing and where it was all heading I'd say he was well aware of the possible outcome at least a month prior to that , so at least two months. I mean plenty of time.
It's not clear that SBF knew the severity of the situation, kind of like he didn't bother to keep thorough accounting records. There was initially a rumor that SBF took a flight to S. America, perhaps Argentina, or somewhere in the neighborhood. Perhaps Bahamian authorities told him not to go anywhere, and perhaps he thought he could explain his way out of the situation, and recover. I don't know.

Then again, where would he go? With those kind of losses, if another country tried to shield him, that country might find itself on the receiving end of sanctions and disconnection from the global banking system.
BWV said:
Sam Bankman-Fried just lost 90+% of his net worth and his company, FTX

Sam Bankman-Fried’s $16 Billion Fortune Is Eviscerated in Days
https://www.bloomberg.com/news/arti...iscerated-in-days-with-binance-set-to-buy-ftx
Well, that certainly blew up!
 
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  • #562
re: Will SBF face prison time (and/or other punishment)

https://www.huffpost.com/highline/article/white-collar-crime/

Read ^^^ this recent HuffPost article on white collar crime and then rethink.

It's rare for super wealthy/powerful people to get harsh sentencing. And even if they do, once they are locked up and the media has shifted the spotlight away from them, their high-powered lawyers start negotiating reduced sentencing and they often get out of prison MUCH FASTER than expected (again, when "no one is looking"...). See examples in article.

Some of the stories in there will sicken you. . .we live in an unfair world. I tend to think SBF gets off relatively easier when all is said and done.
 
  • #563
kyphysics said:
re: Will SBF face prison time (and/or other punishment)

https://www.huffpost.com/highline/article/white-collar-crime/

Read ^^^ this recent HuffPost article on white collar crime and then rethink.

It's rare for super wealthy/powerful people to get harsh sentencing. And even if they do, once they are locked up and the media has shifted the spotlight away from them, their high-powered lawyers start negotiating reduced sentencing and they often get out of prison MUCH FASTER than expected (again, when "no one is looking"...). See examples in article.

Some of the stories in there will sicken you. . .we live in an unfair world. I tend to think SBF gets off relatively easier when all is said and done.

Remember though, he isn't wealthy anymore!
 
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  • #564
artis said:
That is only for the last couple of days. He was free for like a month after FTX filed for bankruptcy and given he knew what he was doing and where it was all heading I'd say he was well aware of the possible outcome at least a month prior to that , so at least two months. I mean plenty of time.
I for sure want to see him extradited and processed in a U.S. court. But from his position it would have been easy to have made "arrangements" for a fast boat to Cuba and join the U.S.fugitive crowd there. It seems Cuba could care less what the U.S. thinks with a history of taking fugitives.
IMG_20221216_140716_1.jpg
 
  • #565
Astronuc said:
It's not clear that SBF knew the severity of the situation, kind of like he didn't bother to keep thorough accounting records.
Much about him is rather strange from the outfits to the financial dealings, at this point it's even hard to say whether it's all a clever show or not.

Someone should ask him whether the millions paid to democrats were actually worth it , because judging by the looks of it it did not help him much, if anything.
And he definitely did not pay them out of pure love and care for US politics.
 
  • #566
artis said:
Much about him is rather strange from the outfits to the financial dealings, at this point it's even hard to say whether it's all a clever show or not.

I agree here. The whole thing is confusing.
artis said:
Someone should ask him whether the millions paid to democrats were actually worth it , because judging by the looks of it it did not help him much, if anything.
And he definitely did not pay them out of pure love and care for US politics.

He's young, his parents are college professors, he grew up in California, he probably is a liberal? If your goal is purely to opportunistically bribe someone in exchange for political protection when bad things come out, he didn't pick the right party (not that i think the Republicans would have helped him in any way either). He also didn't pick the right election, mostly he donated to the primaries and then skipped the general election (probably because the money issues started becoming more apparent is my speculation)

Also, none of that was actually his money, so the cost to him was very small. It's not like they'll upgrade the felony charge because he stole 3.02 billion dollars instead of just 3 billion dollars. If that extra money could have stopped ftx from collapsing when it did then it would have been an expensive decision, but it seems like he really needed to not steal any money for that to work given how bad it ended.
 
  • #567
Mazars, the accounting firm that issued a proof of reserves report posted by cryptocurrency giant Binance last week, has pulled the report from its website and no longer offers the service for its crypto clients.
https://www.yahoo.com/finance/news/accounting-firm-issued-proof-reserves-223433840.html
"Mazars has paused its activity relating to the provision of Proof of Reserves Reports for entities in the cryptocurrency sector due to concerns regarding the way these reports are understood by the public," the accounting group said in an emailed statement to Fox Business.

I wonder if it is really a matter of not believing the report's accuracy.
 
  • #568
https://www.bloomberg.com/news/arti...of-cash-to-plead-guilty-in-bitcoin-theft-case
1671308931775.png
Ohio Man Who Posed in Tub Full of Cash to Plead Guilty in Bitcoin Theft Case
Prosecutors had seized the wallet from Harmon’s brother, Larry, after his February 2020 arrest on charges he laundered $311 million in crypto transactions on Darknet sites where illegal drugs were sold. Larry Harmon was the first person charged with US crimes related to “mixing” — the practice of jumbling together tokens from different owners to make them harder to trace.
 
  • #569
Office_Shredder said:
I agree here. The whole thing is confusing.He's young, his parents are college professors, he grew up in California, he probably is a liberal? If your goal is purely to opportunistically bribe someone in exchange for political protection when bad things come out, he didn't pick the right party (not that i think the Republicans would have helped him in any way either). He also didn't pick the right election, mostly he donated to the primaries and then skipped the general election (probably because the money issues started becoming more apparent is my speculation)
Now it is revealed that he donated to lawmakers who were on committees that would be investigating him.
https://freebeacon.com/democrats/ba...to-house-committee-members-investigating-him/
 
  • #571
  • #572
morrobay said:
' So I would say this suggests SBF new very well of his liability and guilt by making these targeted " donations".

$40 million this cycle, largely to Democrats
contributed $300,351 to nine members of the House Financial Services

Are you sure targeted is the right description? Even if he picked them specifically, it was probably to influence legislation, not an impending criminal investigation.
 
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  • #573
Office_Shredder said:
Are you sure targeted is the right description? Even if he picked them specifically, it was probably to influence legislation, not an impending criminal investigation.
I agree , it seems more likely the donations were made in order so that the government doesn't put obstacles in the way of crypto so that it can boom which was absolutely necessary for him to acquire more capital investment. Because by the end of the day this was just a post modern ponzi scheme with the ending of a classical ponzi scheme.
 
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  • #574
  • #575
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  • #576
This is from a link from your link above: These are very serious charges. I would be baffled if he gets off light on this.
Screenshot_2022-12-19-17-54-09-18.jpg
 
  • #577
morrobay said:
These are very serious charges. I would be baffled if he gets off light
There's two sides in me , the one side kind of feels a little sad for SBF because truth be told I'm not sure whether that many people could resist the temptation to live good while fooling around some rich and as we now see quite naive and careless investors , and I do believe that one is also responsible for one's carelessness as much as the thief is responsible for his theft , the other side in me does think the guy needs some serious time off both for him to think through all this mess as well as a cautionary tale for other "wanna get rich quick" fanatics.Not that it changes anything but if I had any say in this , given his 30 now , I'd give him 15 years with the condition that after he comes out he has to hold a regular job and actually earn his money not steal it ,+ he would have plenty of time left to start a family and enjoy the simple things in life.
Just my 2 cents.

PS. Truth be told I haven't done my research so I don't know how many years behind bars one typically gets for the scale of theft he was doing.
 
  • #578
artis said:
the other side in me does think the guy needs some serious time off both for him to think through all this mess as well as a cautionary tale for other "wanna get rich quick" fanatics.
And a nice long prison sentence will do the first part. Nothing will do the second part. There have been hundreds (at least) of "cautionary tales" throughout recorded history, including recent history (think Enron ... think Madoff ... etc). None of them have meant squat as a deterrent.
 
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  • #579
artis said:
There's two sides in me , the one side kind of feels a little sad for SBF because truth be told I'm not sure whether that many people could resist the temptation to live good while fooling around some rich and as we now see quite naive and careless investors , and I do believe that one is also responsible for one's carelessness as much as the thief is responsible for his theft , the other side in me does think the guy needs some serious time off both for him to think through all this mess as well as a cautionary tale for other "wanna get rich quick" fanatics.
I agree with both, but want the latter. He's a kid (in that he acts like one) but he's not a kid (because he's friggin 30). Grown-up crimes should have grown-up punishments. They need to, because the damage is real. And please don't make this political, but we regularly try teenagers as adults for other crimes (theft, murder, etc.). If anything, fraud is more grown-up than those.

And not for nothing, but I wish "investors" would, someday in the history of the world, stop being blinded by the glare of the gold in front of their eyes and actually start evaluating the "investments" for what they are. It wouldn't bother me at all if one of the VCs who "invested" in this nonsense shared a cell with him. While I think the Brady/celebrity lawsuit stuff is silly, there's real responsibility for a real investor. Maybe the threat of jail time will give them pause when thinking of "investing" in the next thing with a registered domain name.
 
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  • #580
russ_watters said:
I agree with both, but want the latter. He's a kid (in that he acts like one) but he's not a kid (because he's friggin 30). Grown-up crimes should have grown-up punishments. They need to, because the damage is real. And please don't make this political, but we regularly try teenagers as adults for other crimes (theft, murder, etc.). If anything, fraud is more grown-up than those.
true I agree, emotions aside he is perfectly fit to stand trial and his intent is so obvious, the whole "giving away money during lifetime, cheap clothes , wirefraud chat name etc" , it was a game for him.

Then again as much as I agree that he should be put under the legal system's hydraulic press and squished flat as a penny , and we do try teenagers for serious crimes, the legal system is not perfect and some grown ups have managed to unfairly get free, one notorious case that also involved a celebrity was the OJ Simpson case.
Though being a violent fool he did manage to eventually get to prison in 2007 for robbery and kidnapping but still he got free of what I seriously believe was the murder that he committed before.

russ_watters said:
And not for nothing, but I wish "investors" would, someday in the history of the world, stop being blinded by the glare of the gold in front of their eyes and actually start evaluating the "investments" for what they are. It wouldn't bother me at all if one of the VCs who "invested" in this nonsense shared a cell with him. While I think the Brady/celebrity lawsuit stuff is silly, there's real responsibility for a real investor. Maybe the threat of jail time will give them pause when thinking of "investing" in the next thing with a registered domain name.
Exactly, if someone agrees for someone else to oversee their money or whatever then they have a responsibility to treat that money as if it's not theirs and it's not.
These careless investors I believe are just like careless baby sitters or house managers. If I pay you to secure my house and then I find it trashed and burned down , even if it wasn't done by the manager or caretaker he does have a responsibility part in that situation. Countless examples of this, like doctors responsible for their patients etc, but in the financial world if often fails to follow this same principle
 
  • #581
artis said:
, the legal system is not perfect and some grown ups have managed to unfairly get free, one notorious case that also involved a celebrity was the OJ Simpson case.
That was tragic. The DA was up for re election so for maximum publicly he moved the venue downtown which resulted in
a majority of blacks on jury. Had the venue been where the crime was , West LA/Santa Monica a mostly white jury would have returned the correct verdict. Lets hope there doesn't exist a venue that would select sympathetic jurors in the SBF case. If that happens then it is time for professional jurors.
 
  • #582
morrobay said:
That was tragic. The DA was up for re election so for maximum publicly he moved the venue downtown which resulted in
a majority of blacks on jury. Had the venue been where the crime was , West LA/Santa Monica a mostly white jury would have returned the correct verdict. Lets hope there doesn't exist a venue that would select sympathetic jurors in the SBF case. If that happens then it is time for professional jurors.
Yup those are the limitations of trial by peers, the peers can be manipulated in some cases , and jury just as democracy only holds in general if the majority of it's participants are vigilant but also intelligent and without hardcore ideological leanings.
 
  • #583
No one should be surprised by this, just the tip of the iceberg

https://www.forbes.com/sites/thomas...oney-laundering-over-binance-crypto-exchange/

A methamphetamine and cocaine gang operating across the U.S., Mexico, Europe and Australia used the world’s biggest cryptocurrency exchange Binance to launder tens of millions in drug proceeds, according to an ongoing investigation by the US Drug Enforcement Administration. Between $15 and $40 million in illicit proceeds may have been funneled through Binance, the DEA alleged.
 
  • #584
https://www.theregister.com/2022/12/20/crypto_ponzi_scheme_cofounder_pleads/
OneCoin co-founder pleads guilty to $4 billion fraud

https://www.justice.gov/usao-sdny/p...currency-pyramid-scheme-onecoin-pleads-guilty
U.S. Attorney Damian Williams said: “As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated. Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars, claiming that OneCoin would be the ‘Bitcoin killer.’ In fact, OneCoins were entirely worthless. Greenwood’s lies were designed with one goal, to get everyday people all over the world to part with their hard-earned money — real money — and to line his own pockets to the tune of hundreds of millions of dollars. This guilty plea by the co-founder of OneCoin caps a week at SDNY that sends a clear message that we are coming after all those who seek to exploit the cryptocurrency ecosystem through fraud, no matter how big or sophisticated you are.”

I expect SBF will eventually have the same fate.
 
  • #585
Another Bitcoin Miner Teeters on the Edge of Bankruptcy
https://www.bloomberg.com/news/arti...ree-btc-warns-of-bankruptcy-restructures-debt
Greenidge Generation Holdings Inc., once one of the largest public Bitcoin miners in the US, warned that it may seek bankruptcy protection while entering into debt restructuring talks with lender New York Digital Investment Group.

The firm, probably best known for a long-running dispute with environmentalists over the impact of its operations on New York’s Seneca Lake, is the latest miner to teeter on the edge of bankruptcy in the wake of the plunge in the value of the largest cryptocurrency.
 
  • #586
I find this very interesting, the fact that once the currency value dropped some all of a sudden everybody seems to be empty pocketed...
Could it be because they all basically just tried to ponzi scheme the hell out of this affair...
It seems so to me, everyone to their own degree of sophistication.
 
  • #588
Schadenfreude
 
  • #589
HA ... I always thought that the "crypto" in cryptocurrency stood for cryptography, but NOW I get it ...
1671638300876.png
 
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  • #590
artis said:
I find this very interesting, the fact that once the currency value dropped some all of a sudden everybody seems to be empty pocketed...
Could it be because they all basically just tried to ponzi scheme the hell out of this affair...
It seems so to me, everyone to their own degree of sophistication.

From my link above “OneCoin” Pleads Guilty.
In an August 9, 2014, email between GREENWOOD and IGNATOVA, IGNATOVA described her thoughts on the “exit strategy” for OneCoin. The first option that IGNATOVA listed was, “Take the money and run and blame someone else for this . . . .” And in a September 11, 2016, exchange with IGNATOVA’s brother, Konstantin Ignatov, GREENWOOD referred to OneCoin investors stating, “These ppl are idiots,” to which Ignatov responded, “as you told me, the network would not work with intelligent people ;)”
 
  • #591
gmax137 said:
Good riddance. The whole "mining" thing, especially operating power plants to run the servers, seems to me to be a colossal waste of scarce resources.
Yup, wasting real actual energy to mine worthless bits in the hopes to turn them into real actual money with a profit over that of the electricity bill.
From the experience of some people I know vaguely it doesn't seem it gave them any real benefit. But hey, hope dies last doesn't it.
 
  • #592
https://finance.yahoo.com/news/bitcoin-miner-core-scientific-files-for-bankruptcy-133753430.html
Publicly traded bitcoin mining company Core Scientific (CORZ) filed for Chapter 11 bankruptcy protection in a federal bankruptcy court in the Southern District of Texas early Wednesday morning.

The bankruptcy petition, according to the company's announcement, resulted from a combination of a declining bitcoin price, rising electricity costs needed to power its data centers and "failure by certain of its hosting customers to honor their payment obligations."
 
  • #593
artis said:
Yup, wasting real actual energy to mine worthless bits in the hopes to turn them into real actual money with a profit over that of the electricity bill.
From the experience of some people I know vaguely it doesn't seem it gave them any real benefit. But hey, hope dies last doesn't it.
If you think about it, its analogous to mining precious metals - after inventing a sound fiat currency in Song dynasty then ruining it through mismanagement, China's economy in the late Ming and Qing period centered upon manufacturing goods to trade the Spanish for South American silver. The only use they had for silver was currency for the economy.
 
  • #594
Two senior executives associated with collapsed crypto exchange FTX have pleaded guilty to multiple criminal charges and are cooperating with federal prosecutors, according to unsealed court records. Additionally, the pair face civil fraud charges from the Securities and Exchange Commission that were announced Wednesday night.

Gary Wang, the co-founder of FTX, and Caroline Ellison, who served as CEO of the hedge fund Alameda Research, pleaded guilty to multiple counts of conspiracy and fraud for their roles in the fraud scheme that led to the collapse of the crypto-trading platform.
https://www.cnn.com/2022/12/21/business/ftx-alameda-research-cooperating/index.html

That sounds like a lot to me -- and fast. SBF is going to go to prison for a really long time.

I really want to read her book. From the library though, I don't want to send her any of my money.
 
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  • #595
russ_watters said:
That sounds like a lot to me -- and fast.
The higher benefits coming with being the first one to spill the beans, and there are no benefits in holding for the others...
I guess negotiations can really speed up things ...
 
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  • #596
russ_watters said:
SBF is going to go to prison for a really long time.
We might even have commercial fusion energy by the time he gets out.
 
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  • #597
russ_watters said:
https://www.cnn.com/2022/12/21/business/ftx-alameda-research-cooperating/index.html

That sounds like a lot to me -- and fast. SBF is going to go to prison for a really long time.

I really want to read her book. From the library though, I don't want to send her any of my money.

From CoinDesk -
Caroline Ellison, the former CEO of Alameda Research, and former FTX co-founder Gary Wang plead guilty to fraud charges in the FTX case, seeming to turn against their former boss Sam Bankman-Fried, who faces similar charges. Bankman-Fried, founder of both the cryptocurrency exchange FTX and the crypto trading firm Alameda Research, is expected to make his first appearance in federal court in Manhattan today.
https://www.coindesk.com/tv/first-mover/first-mover-dec-22-2022/

Also - https://www.coindesk.com/markets/20...oken-at-center-of-new-us-charges-in-ftx-case/
The U.S. Securities and Exchange Commission (SEC) has called FTX’s FTT exchange token a security. FTT was sold as an investment contract, and is a "security," the SEC said in a complaint filed late Wednesday, in a move that is sure to have a wide-ranging impact on the industry. "If demand for trading on the FTX platform increased, demand for the FTT token could increase, such that any price increase in FTT would benefit holders of FTT equally and in direct proportion to their FTT holdings," the SEC wrote in its complaint.

Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang have pleaded guilty to criminal fraud charges tied to FTX's collapse. The SEC and Commodity Futures Trading Commission also announced charges against the two, saying Ellison manipulated the price of FTT. The duo are cooperating with investigators. The U.S. Attorney for the Southern District of New York did not specify what they were being charged with.

https://www.coindesk.com/business/2022/12/22/sec-calls-ftt-exchange-token-a-security/
Caroline Ellison Plea Agreement: $250,000 Bail, Surrender of Travel Documents, Forfeiture of Assets
https://www.msn.com/en-us/news/crim...el-documents-forfeiture-of-assets/ar-AA15yfHn
The agreement states that if Ellison fully cooperates with the SDNY's investigation, as well as any other law enforcement agency designated by the office, she won't be further prosecuted criminally except for possible criminal tax violations with regard to the wire and commodity fraud charges that resulted from commingling funds between FTX and Alameda accounts.
 
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  • #598
It looks like SBF is toast.
Now will SBF have the goods to make a deal to rat on others known and unknown.
 
  • #599
from FaceBook. I guess this is dated lol.

cartoon.jpg
 

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