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.
  • #721
Vanadium 50 said:
Obviously a new definition of the word "stable" of which I was previously unaware.
https://cointelegraph.com/news/bitc...c-terms-how-high-can-the-btc-short-squeeze-go

“If USDC is only 90% backed, the equilibrium price is NOT $0.90. The equilibrium price is ZERO,” Cory Klippsten, CEO of Swan Bitcoin, reacted, adding:

“Everyone has the incentive to redeem asap for $1. You don’t want to be in the last 10%, with all the money already gone.“
 
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  • #722
nsaspook said:
https://cointelegraph.com/news/bitc...c-terms-how-high-can-the-btc-short-squeeze-go

“If USDC is only 90% backed, the equilibrium price is NOT $0.90. The equilibrium price is ZERO,” Cory Klippsten, CEO of Swan Bitcoin, reacted, adding:
With this logic, people should run to withdraw all their cryptos from all centralized exchenges, as none is fully backed up.

People should also run and empty their bank accounts in cash, as only around 2 percent of one's money is backed in paper money. Once all papers are removed from banks, people could start making money by selling them to those badly in need of paper money.

Am I wrong?
 
  • #723
fluidistic said:
Am I wrong?
Yes, for US banks anyway. Unless your bank account is more than $250,000 it is insured by the FDIC.
 
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  • #724
fluidistic said:
People should also run and empty their bank accounts in cash, as only around 2 percent of one's money is backed in paper money.
Nonsense. "Paper money" is just a holding token for "the full faith and credit of the United States" and that is backed to the tune of $250,000 for individual bank accounts.
 
  • #725
I do not understand how that goes against what I wrote. Even if it were fully backed no matter the amount in one's account.
 
  • #726
gmax137 said:
it is insured by the FDIC.
But that's also not cash but electronic money, no?
So regardless the insurance no sufficient 'backing' in cash.

As scorn on the nonsense of that bitcoin guru, it's just brilliant, IMHO.
 
  • #727
fluidistic said:
I do not understand how that goes against what I wrote. Even if it were fully backed no matter the amount in one's account.
what you wrote was
people should also run and empty their bank accounts...
That is what I was saying is nonsense. People COULD just pay for everything with checks, credit cards, PayPal, etc. Actual greenbacks are not necessary.
 
  • #728
gmax137 said:
unless your bank account is more than $250,000 it is insured by the FDIC.
I believe it is better than this. If it is over $250K, the first $250K is insured, Per bank, not per depositor. If someone had $1.5M and deposited $300K each in five banks, and fourt failed, he would get at least $1.3M back

As a practical matter, when the FDIC has stepped in, people have gotten all of their money back. Few people are above the limit, so the difference is snall, and the government prefers to step in before a bank goes belly-up.
 
  • #729
Rive said:
But that's also not cash but electronic money, no?
So regardless the insurance no sufficient 'backing' in cash.

As scorn on the nonsense of that bitcoin guru, it's just brilliant, IMHO.

I don't know what point you are making here.

See
https://www.fdic.gov/resources/deposit-insurance/understanding-deposit-insurance/

"Federal deposit insurance goes to the heart of the FDIC’s mission: to promote confidence and stability in the nation’s financial system. FDIC deposit insurance enables consumers to confidently place their money at thousands of FDIC-insured banks across the country, and is backed by the full faith and credit of the United States government. Since the founding of the Federal Deposit Insurance Corporation in 1933 no depositor has lost a penny of FDIC-insured funds."

EDIT: Emphasis mine.
 
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  • #730
gmax137 said:
I don't know what point you are making here.
My point is that you did not get the point of that comment either.
#722 was sarcasm, not an argument.
 
  • #731
Rive said:
My point is that you did not get the point of that comment either.
#722 was sarcasm, not an argument.
Well, I have missed out on sarcasm before, especially in print.
 
  • #732
https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html

Regulators close New York’s Signature Bank, citing systemic risk​

To stem the damage and stave off a bigger crisis, the Fed and Treasury created an emergency program to backstop deposits at both Signature Bank and Silicon Valley Bank using the Fed’s emergency lending authority.

While depositors will have access to their money, equity and bondholders at these banks are being wiped out, a senior Treasury official said.

FDIC insurance now covers all deposits but equity and bondholders are left holding worthless paper.

I guess that's the risk with any investment.
 
  • #733
nsaspook said:
https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html

Regulators close New York’s Signature Bank, citing systemic risk​

FDIC insurance now covers all deposits but equity and bondholders are left holding worthless paper.

I guess that's the risk with any investment.
I heard about it last night. Crypto exposure (is like Cryptonite) has real world consequences.

Regulators seized New York regional bank Signature Bank (SBNY) two days after shutting down Silicon Valley Bank as overseers of the banking system try to restore calm before markets open Monday.
https://finance.yahoo.com/news/regu...-third-largest-us-bank-failure-231404695.html
Signature becomes the third-largest bank to ever fail in the U.S., behind Silicon Valley Bank and Washington Mutual in 2008, if its assets haven't changed significantly since the end of 2022. Signature had $110 billion in assets as of Dec. 31, ranking 29th among U.S. banks. It had $88 billion in deposits as of that date, and approximately 89.7% were not insured by the Federal Deposit Insurance Corporation.

Signature served clients in the cryptocurrency world and had been trying to reduce its exposure. Like Silvergate Bank, another crypto-friendly bank that said last week it would voluntarily wind itself down, it suffered from a deposit outflow in the aftermath of the collapse of crypto exchange FTX. Deposits dropped 17% in the fourth quarter of 2022 as compared to the year-earlier period.

The value of some of its securities had also dropped in value due to a rapid rise in interest rates over the last year, . . .
So where was the regulation, the risk assessment, the stress tests, . . . . ? Interest rates have been steadily rising for about a year, and there was warning months before that started happening.
 
  • #734
https://www.bloomberg.com/news/arti...r-finance-hit-by-197-million-hack-experts-say
Decentralized lending protocol Euler Finance was hit by an attack that drained $197 million in cryptocurrencies from its platform on Monday, making it the largest hack in its corner of the digital-assets market this year.

The bulk of the hacker’s loot — worth roughly $135 million — was denominated in staked Ether tokens (stETH), while the remainder was held in wrapped Bitcoin and stablecoins DAI and USDC, according to security firm BlockSec. Some of the proceeds from the attack are already being laundered through Tornado Cash, a US-sanctioned platform which enables users to obfuscate their transaction history, security companies PeckShield Inc and Elliptic said.
The incident at Euler is the latest blow to the battered crypto sector, following the recent shutdown of several crypto-friendly US banks in the last week which left multiple major digital-asset companies exposed. Those collapses have capped off months of bankruptcies, scandals and layoffs among crypto companies, triggered by a rout in digital asset prices.

 
  • #735
A new report filed in the ongoing autopsy of failed crypto exchange FTX reveals a litany of accusations against the company including executives who laughed about losing track of millions, a culture that cracked down on anyone who flagged potential problems, and a total disregard for normal accounting principles.
https://finance.yahoo.com/news/ftx-execs-joked-internally-losing-180620302.html
A group of FTX’s debtors, led by current CEO and chief restructuring officer John Ray III, filed a 39-page report with the U.S. Bankruptcy Court for the District of Delaware Sunday, detailing the demise of the exchange along with its trading arm, Alameda Research. They allege that FTX was completely controlled by a small cabal of executives, helmed by cofounder and former CEO Sam Bankman-Fried (SBF), who failed to institute proper accounting, security, and management practices, putting the firm’s “crypto assets and funds at risk from the outset.”

“While the FTX Group’s failure is novel in the unprecedented scale of harm it caused in a nascent industry, many of its root causes are familiar: hubris, incompetence, and greed,” they wrote.
 
  • #736
If FTX was so sloppy, and these investors so savvy, why did they invest in it?
 
  • #737
For the same reason that "savvy" investors put almost one billion dollars into Theranos. Because SBF and Elizabeth Holmes both have outstanding people skills, and used those skills to persuade otherwise sophisticated people to invest in their scams without doing due diligence.

I have seen much the same thing on a much smaller scale in several of my jobs.
 
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  • #738
jrmichler said:
Because SBF and Elizabeth Holmes both have outstanding people skills, and used those skills to persuade otherwise sophisticated people to invest in their scams without doing due diligence.
And IMO the tech startup culture encourages risk taking for fear of missing out. Overall it's probably actually a winning strategy.
 
  • #739
A tech startup has a lot in common with a complex engineering project that requires innovation. The path to a finished product is not known until well into the project, so it is necessary to start with the assumption that a path to a successful finish will be found. So risk taking is definitely a winning strategy for a tech startup. One big win pays for several complete losses.
 
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  • #740
Well, if you're the principal and the startup goes broke, you need new investors for your next idea. If you're the investor in the failed startup, you may have lost your shirt. So, taking risk may be wise for some and not others.
 
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  • #741
jrmichler said:
Elizabeth Holme
Has she traded her black turtleneck for an orange jumpsuit yet?

"Too good to check" seems to be a common theme. Will people ever learn?
 
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  • #742
IIRC, her appeal pipe-line has emptied: 'Orange is the new Black' looms...
FWIW, did the psych assessment figure if she was 'Mad' (= delusional ) or merely 'Bad' ??
 
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  • #743
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  • #744
jrmichler said:
Her partner in crime
Not just in crime.

"You have him under some sort of strange sexual spell. I respect that." - Morticia Addams

jrmichler said:
lets get back to bitcoin scams...
Fair enough. But these do have a lot in common - "I don't understand it, but somehow it will make me zilions!: is not a story that usually ends well.
 
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  • #746
jrmichler said:
And now, lets get back to bitcoin scams...
Bitcoin is up 80% YTD, which is a pretty decent return...
 
  • #747
A funny take on what crypto and NFT's really are by Ben McKenzie and Bill Maher, their interview was longer but sadly this is the longest version I could find online,
For those interested in the full interview I suggest watching the full show, a great and funny take on pressing matters , it was Real time with Bill Maher season 21 episode 11

 
  • #749
Haters gonna hate.
 
  • #750
Astronuc said:
Taylor Swift didn't sign $100 million FTX sponsorship because she was the only one to ask about unregistered securities, lawyer says!
https://www.yahoo.com/finance/news/taylor-swift-didnt-sign-100-112618986.html
From Taylor Swift's song Blank space, the chorus

So it's gonna be forever
Or it's gonna go down in flames
You can tell me when it's over, mm
If the high was worth the pain
So she either saw it coming
Or...
Got a long list of ex-lovers
Maybe SBF was one of those "ex-lovers" and let her in on a secret.