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

  • Thread starter Thread starter nsaspook
  • Start date Start date
  • Tags Tags
    Bitcoin
Click For Summary
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.
  • #331
Astronuc said:
Wall Street Journal reports "FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall".

That sounds dodgy. Was that legal?
It was just a "poor judgement call".

Crypto exchange FTX lent billions of dollars worth of customer assets to fund risky bets by its affiliated trading firm, Alameda Research, setting the stage for the exchange’s implosion, a person familiar with the matter said.
"He’s also vegan and drives a Toyota, so all is forgiven!"
 
Physics news on Phys.org
  • #332
1668132270132.png
 
  • #333
Be careful where you put your bitcoin/cryptocurrency and/or money.

Tracy Wang
Thu, November 10, 2022, 5:00 PM

"Shocking" is a word that aptly describes the rapid fall of Sam Bankman-Fried’s cryptocurrency empire. To a surprising degree, it’s a sentiment that pours out from people who worked for him, people who you’d think would’ve had a clue.

How can that be? It may have something to do with a luxury penthouse in the Bahamas. That’s where 30-year-old Bankman-Fried is roommates with the inner circle who ran his now-struggling crypto exchange FTX and trading giant Alameda Research.
https://www.yahoo.com/finance/news/bankman-fried-cabal-roommates-bahamas-220000971.html

Many are former co-workers from quantitative trading firm Jane Street, others he met at the Massachusetts Institute of Technology, his alma mater. All 10 are, or used to be, paired up in romantic relationships with each other. That includes Alameda CEO Caroline Ellison, whose firm played a central role in the company's collapse – and who, at times, has dated Bankman-Fried, according to people familiar with the matter.
Conflicts of interest? Negligence?

According to FTX staff: "It’s a place full of conflicts of interest, nepotism and lack of oversight."

FTX and Alameda employees CoinDesk interviewed say they have been kept in the dark about the events of the past week, adding that only CEO Bankman-Fried’s inner circle may have had knowledge that the exchange, as reported by the Wall Street Journal, siphoned customer funds into corporate sibling Alameda.

FTX apparently needs some independent outside oversight.
Among his nine housemates are FTX co-founder and Chief Technology Officer Gary Wang, FTX Director of Engineering Nishad Singh and Ellison of Alameda, Bankman-Fried’s trading business that’s at the center of the current chaos and on which the Wall Street Journal reported got $10 billion of FTX customer money.
. . . .
“Gary, Nishad and Sam control the code, the exchange's matching engine and funds,” the first person familiar with the matter said. “If they moved them around or input their own numbers, I'm not sure who would notice."
It seems that FTX did not disclose the appropriation of customers' funds with which they 'gambled'.

“Some employees kept their life savings on FTX”!Bloomberg reports Bankman-Fried’s Assets Plummet From $16 Billion to Zero in Days
https://finance.yahoo.com/news/bankman-fried-assets-plummet-16-080320755.html

At the opening of US markets 0930.
ymbolLast PriceChange% Change
Bitcoin USD16,598.27-945.34-5.39%
Ethereum USD1,214.45-80.58-6.22%
Tether USD0.9985+0.0022+0.2233%
BNB USD281.48-18.29-6.10%
 
Last edited:
  • #335
Reply
  • Like
Likes BWV, russ_watters, Astronuc and 1 other person
  • #336
Office_Shredder said:
991 million dollars is approximately a billionaire. He's fine
Two days later:
https://www.wsj.com/livecoverage/st...ried-s-net-worth-at-zero-byL97Xf4UJhiK7vCNmtD

Bloomberg Estimates Sam Bankman-Fried’s Net Worth at Zero​


https://www.bloomberg.com/news/arti...go-from-16-billion-to-zero-after-ftx-collapse
The downfall of his crypto empire -- which filed for bankruptcy on Friday along with his resignation -- means assets owned by the mogul once likened to John Pierpont Morgan have become worthless. At the peak, the 30-year-old was worth $26 billion, and he was still worth almost $16 billion at the start of the week.

The Bloomberg Billionaires Index now values FTX’s US business -- of which Bankman-Fried owns about 70% -- at $1 because of a potential trading halt, from $8 billion in a January fundraising round. Bankman-Fried’s stake in Robinhood Markets Inc. valued at more than $500 million was also removed from his wealth calculation after Reuters reported it was held through his trading house, Alameda Research, and may have been used as collateral for loans. FTX.US and Alameda were also part of the bankruptcy filing.

In announcing it was filing for Chapter 11 bankruptcy, FTX said Friday in a statement that Bankman-Fried has resigned as chief executive officer and will be succeeded by John J. Ray III. Employees are expected to continue with the company and “assist Mr. Ray and independent professionals” during bankruptcy.
 
Reply
  • Wow
  • Like
Likes Office_Shredder and russ_watters
  • #337
nsaspook said:
Best headline so far about this:
Where did you find that?

nsaspook said:
Trusting Charlatans with their Money
Keep your regulation off my crypto!
 
  • #338
Vanadium 50 said:
Where did you find that?
A reddit group.
 
  • #342
russ_watters said:
Madoff?
Maybe too much to hope for, given small investors largely got made whole by the trustee.

A basic legal principle of ponzi schemes is that fake gains can be clawed back in the bankruptcy - so if FTX gets treated like the scam it was, anyone who ever made a dime off the company could be a target
 
  • #343
I think we should fix Sam Bankman-Fried up with Elizabeth Holmes. Think of the children!
 
  • #345

Cryptocurrency exchange FTX files for bankruptcy​



GURA: Yeah. So about a week after the first signs of trouble, FTX - which has been a huge player in the world of crypto, really one of the largest crypto exchanges, with a big international presence - filed for bankruptcy protection in Delaware, along with 130 affiliated companies.

I also heard thousands, or hundred thousand investors. I haven't found the statement in writing.

https://www.npr.org/2022/11/11/1136...lars-low-and-under-doj-scrutiny-seeks-bankrup
 
  • #346
Did the Sam Bankman Fried guy take some personal profits before FTX crashed, such that he's still wealthy? Or, was like all his money tied into that one endeavor and he's not completely broke?
 
  • #347
kyphysics said:
Did the Sam Bankman Fried guy take some personal profits before FTX crashed, such that he's still wealthy? Or, was like all his money tied into that one endeavor and he's not completely broke?

The post above makes it sound like all his wealth was pumped back into it. He owned a huge chunk of Robinhood that would have left him set for life, but apparently that got lost in the fire.
russ_watters said:
Larry David wasn't wrong afterall:



They only ran that commercial because SBF's brother wanted their dad to be in a commercial with Larry David. In hindsight that was probably the beginning of the end.
 
  • #348
kyphysics said:
and he's not completely broke?
should have read "now" . . .
 
  • #349
I was waiting for this part of the thread title to happen in the FTX saga.

1668268000561.png

FTX Is Investigating a Potential Hack Amid Bankruptcy Filing​

Bankrupt cryptocurrency exchange FTX is probing a potential hack and asked customers to stay off the FTX website, the company said. More than $400 million worth of crypto funds appears to be missing, according to crypto analytics firm Elliptic Enterprises Ltd.

https://decrypt.co/114269/hundreds-...-from-ftx-overnight-in-unauthorized-transfers
Several wallets allegedly belonging to FTX were drained of hundreds of millions of dollars in coins late on Friday night, with much of the funds transferred from Tether (USDT) into stablecoin DAI, and from staked Ethereum (stETH) into Ethereum (ETH).

It was the same day that FTX filed for Chapter 11 bankruptcy, and it looked too soon, too late at night, and too sophisticated for the actions to be attributed to liquidators.The exodus, all visible on blockchain tracker Etherscan, totaled around $650 million according to pseudonymous blockchain sleuth ZachXBT, widely trusted by the DeFi community.

https://www.reuters.com/markets/cur...ng-failed-crypto-firm-ftx-sources-2022-11-12/

At least $1 billion of client funds missing at FTX​

 
  • #350
We, the public, give the tin-can-banging Pied Pipers power when we humor their empty ideologies as anything but absurdities. SBF was openly running an offshore casino out of an incestuous frat house of twenty-somethings who were skimming billions off the public through rigged market making, and this was all a matter of public knowledge. And yet institutions like the New York Times run full-page stories declaring him as some secular saint who will herald in a new future that will reshape human civilization, and our elected leaders line up to kiss the ring. While technology may change, human nature does not; these self-professed messiahs prophesizing salvation through technology are far less enlightened than they would have you believe. They only want to pick your pocket; they just now have a better story to distract you while they do.

https://www.stephendiehl.com/blog/ftx.html
 
Reply
  • Like
Likes russ_watters
  • #351
SBF was openly running an offshore casino out of an incestuous frat house of twenty-somethings who were skimming billions off the public through rigged market making, and this was all a matter of public knowledge.
Can someone elaborate on this and how it worked in layman terms?

Were FTX insiders taking client capital and gambling with it somehow behind-the-scenes? . . .Also, did SBF know? His parents are Stanford University law professors. . .shame on him, if so.
 
  • #352
kyphysics said:
Were FTX insiders taking client capital and gambling with it somehow behind-the-scenes? . . .Also, did SBF know?
It's his house - his frat party.
 
  • #353
russ_watters said:
It's his house - his frat party.
Sure, but it's plausible underlings could be doing shady stuff behind a boss' back sometimes. It's not always the case that the top guys knows everything happening in-house. That being said, I saw this:
https://www.reuters.com/technology/...ange-was-using-customer-funds-wsj-2022-11-12/

Alameda, FTX executives knew crypto exchange was using customer funds - WSJ

Reuters
Nov 12 (Reuters) - FTX-affiliated crypto trading firm Alameda Research's Chief Executive Officer Caroline Ellison and senior FTX officials knew that the crypto exchange had lent Alameda its customer funds to help meet liabilities, the Wall Street Journal reported on Saturday.

Reuters reported Friday that FTX founder and former CEO Sam Bankman-Fried had secretly transferred $10 billion of customer funds from FTX to Alameda.

Ellison told employees in a video meeting on Wednesday that she, Bankman-Fried, and two other executives, Nishad Singh and Gary Wang were aware of the decision to move customer funds to Alameda, the Journal said, citing people familiar with the matter.
:wideeyed::)):nb) - Not sure it's a good/bad thing SBF's parents are star law professors...surely, of all people, he knew better? ...maybe they can hook him up with great defense lawyers now. .
 
Last edited:
  • #354
russ_watters said:
It's his house - his frat party.
Exactly.

https://www.coindesk.com/layer2/2022/11/11/how-sam-bankman-frieds-effective-altruism-blew-up-ftx/
How Sam Bankman-Fried’s ‘Effective’ Altruism Blew Up FTX
But effective altruism more specifically could have excused or encouraged behaviors that led to FTX’s downfall. Perhaps not least, Bankman-Fried more or less acknowledged in an infamous “Odd Lots” interview that many of the tokens trading on his platform were probably frauds.
That implies he and FTX were always facilitating harm to its users, but the neoliberal and utilitarian underpinnings of effective altruism allowed him to justify that as a matter of consumer freedom.
A less charitable summary of effective altruism, then, would be that it is little more than a fancy way of saying “the ends justify the means.” Effective altruism also encompasses an emphasis on “long-termism,” which can read like another excuse for mercenary corner-cutting today, so long as you commit your loot to improving tomorrow.
 
  • #355
So, what do you guys think the crypto/BTC investor interest implications will be after this?

We've already seen lots of heists/hacks and major crypto crashes already. Would the scale and also brand recognition of this latest fiasco finally put a dent into investor interest? Or, do we need to see even bigger implosions and scandals?

Is there ANY way to store BTC/crypto that is super safe?
 
  • #356
kyphysics said:
Is there ANY way to store BTC/crypto that is super safe?
Sure. Pen and paper.
 
  • #357
Vanadium 50 said:
Sure. Pen and paper.
Exactly. And as far as I'm aware, it is the ONLY way that is truly safe. You could put it in digital form on a 25-year blue ray disc and put that in a bank vault but even blue ray discs go bad.
 
  • #358
kyphysics said:
So, what do you guys think the crypto/BTC investor interest implications will be after this?
You mean what do I think the prospects are or what I think the investors will do? My opinion of the prospects remains unchanged. But investors in a bubble can be stubborn.
Is there ANY way to store BTC/crypto that is super safe?
Safe from what? A flash drive in a safety deposit box is probably good, thought that doesn't say anything about what's on it.
 
  • #359
kyphysics said:
Not sure it's a good/bad thing SBF's parents are star law professors...surely, of all people, he knew better? ...maybe they can hook him up with great defense lawyers now. .
Because someone's parents are 'star law professors' doesn't mean that person knows how to conduct themselves properly.
 
Reply
  • Like
Likes russ_watters
  • #360
phinds said:
You could put it in digital form on a 25-year blue ray disc and put that in a bank vault but even blue ray discs go bad.
Store your fake money in a real bank?! That's crazy talk!