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

  • Topic: News 
  • Thread starter Thread starter nsaspook
  • Start date Start date
  • Tags Tags
    Bitcoin
Join the discussion
Registration is free. Ask a follow-up in this thread, or start your own.
Sign up Log in
1,017 replies · 93K views
artis said:
Maybe SBF was one of those "ex-lovers" and let her in on a secret.
I hope not. TS has apparently had quite a few boyfriends; she certainly could to better than SBF.
 
Last edited:
Reply
  • Like
Likes   Reactions: Vanadium 50 and russ_watters
Physics news on Phys.org
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
Consider that she is the only one out of how many that did not sign on. It's a sad commentary on greed by those who already have more money than they could possibly spend.
 
Reply
  • Like
Likes   Reactions: russ_watters
artis said:
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

Great summary of cryptocurrency by Ben McKenzie at the FTX hearing

 
Before holding up Taylor Swift as an excellent judge of what makes a truly bad idea, remember she was in the movie Cats.
 
Ben McKenzie on CNN - My interpretation of McKenzie's comments: Cryptocurrencies are not currencies - they are unregistered, unlicensed securities, but based on a fictional narrative, i.e., they constitute a fraud.

My take - There is real money invested with the hope that crypto will amount to some equity in some investment. It's not clear how many crypto investors successfully recovered real currency when FTX collapsed. I suspect SBF put the real money in some real bank, and in exchange for the real money, SBF/FTX issued an 'unregistered security', which of course is worth less than the real money invested by many others, if there is any worth at all. The worth was built on the expectation that others will pay more in the future for the cryptofunds, or perhaps the crypto will be used to make an investment in a real company that produces real value (real estate, commodity, . . . . )
 
If they have a half-decent lawyer looking at their prospectus before sending it out, I don't see how this can be fraud. It should say "we hope it will go up, but it might go down - way, way down" in fancy legal talk. Then they're covered.

Their legal position seems much better than Theranos', since they don't have a product, so how can the product not work?
 
Thoughts:
Why is Commissioner Gordon investigating crypto?

Oh, he has a book coming out.

But at least he has an economics degree.

Also picturing SBF and TS arguing over who's parents know more about investment banking.
 
russ_watters said:
Why is Commissioner Gordon investigating crypto?
Shouldn't this be prefaced with "Riddle me this, Caped Crusader?"
 
Reply
  • Like
  • Haha
Likes   Reactions: phinds, Ibix and Bystander
Astronuc said:
Ben McKenzie on CNN - My interpretation of McKenzie's comments: Cryptocurrencies are not currencies - they are unregistered, unlicensed securities, but based on a fictional narrative, i.e., they constitute a fraud.

My take - There is real money invested with the hope that crypto will amount to some equity in some investment. It's not clear how many crypto investors successfully recovered real currency when FTX collapsed. I suspect SBF put the real money in some real bank, and in exchange for the real money, SBF/FTX issued an 'unregistered security', which of course is worth less than the real money invested by many others, if there is any worth at all.
I think McKenzie put it best himself - to paraphrase , that the only real "appeal" for crypto apart from that given to it by youngsters , adventure seekers and paid celebrities is the idea of getting away from a government controlled centralized/monitored currency.
So essentially something that a thief would enjoy.

The problem of course is that even crypto is centralized and this is done by the very people who own the exchanges and the servers on which the exchange is done on, but being that there is very little regulation , they can just take your real money that you gave them and do pretty much whatever with it because you agreed to exchange your government backed dollars for nobody's backed virtual numbers.
 
Vanadium 50 said:
If they have a half-decent lawyer looking at their prospectus before sending it out, I don't see how this can be fraud. It should say "we hope it will go up, but it might go down - way, way down" in fancy legal talk. Then they're covered.

Their legal position seems much better than Theranos', since they don't have a product, so how can the product not work?

Oh God, a securities lawyer would lose it if a cryptocurrency put out a prospectus that says that.

You can't sell securities to Americans without registering them with the SEC. The SEC has basically made it impossible to register a cryptocurrency as a security because they don't really work like a traditional company. That doesn't get you out of the obligation.

https://www.sec.gov/litigation/complaints/2023/comp-pr2023-78.pdf

Here's a case filed this week against an exchange for selling unregistered securities to Americans. The complaint is not "and they didn't warn anyone they could lose money". In fact, it uses statements about how the price can go up and down as evidence that these are securities. So putting in a disclaimer that the value of the coin goes to zero gives you extra exposure here, not protection.
 
Reply
  • Like
Likes   Reactions: russ_watters
But is it fraud?

Let's pick on Theranos again. Their stock was a registered security, but their product was fraudulent,.
A crypto fund might be an unregistered security, but I don't see it as necessarily fraudulent.
 
I agree with @Vanadium 50 if your making false claims about a product then it's fraud , if you are providing a platform for adventure seekers and wishful thinkers to try out their "get rich quick scheme" by exchanging their hard earned US dollars for virtual numbers stored on a server , numbers that can fluctuate based on multiple variables , none of whom are directly in the control of the exchange itself then that is not fraud all on it's own.

What is fraud and what was fraud in the FTX case was that the owners of the exchange did not just take the US dollars and exhcange them with crypto, but they then used those deposited dollars and funneled them away in dirty deals, personal items, luxury lifestyle etc, and then when the average Joe tried to exchange back his crypto value for his dollar value at the rate whatever it was at the time suddenly he found out there's no money in the bank, ups.
Now that definitely is fraud.

If I lose my money in crypto because it;s value dropped that's one thing but if I lose my money in crypto because the crypto exchange siphoned away that money long time ago so that they have no money to cover their a$$ then that's definitely fraud.

What if the crypto value went up? I deposited 1 million in dollars now my crypto is say worth 10 mil in same dollars, the exchange can't just say - nah we won't give you that much, then that is fraud , if I can't get my money's worth at whatever rate crypto to dollar is at the time then that's fraud 100%
It's basic simple theft
 
artis said:
What if the crypto value went up?
I think this point is often missed. If an investor buys crypto believing it will go up, he's buying it from someone who believes it will go down. Two sides to every trade.

When the people selling it are also the people saying it will go up, that should set off alarm bells.

(It'll go up all right - in a puff of smoke.)
 
Vanadium 50 said:
When the people selling it are also the people saying it will go up, that should set off alarm bells.
And that is I believe why Ben McKenzie says its the biggest Ponzi scheme in history , because the sellers claim their product/currency has more value than it actually has but in order for them to extract any value they have to eventually "create" the value and they can only do this by an ever growing number of clients,

So as long as there is a net influx of new buyers the value is kept high and they can then extract real dollars from that non existent smoke and mirrors value of their otherwise badly performing currency.

It's like Amway only worse because in Amway you at least get whatever overhyped product you ordered even if it has false advertising and it's actual qualities don't match the labeled ones.Those ordinary crypto people who lost everything unlike their more cunning and rich overlords would have been better off if they invested all that money into Gwyneth Paltrow's lifestyle brand "goop" :biggrin:
 
Reply
  • Like
Likes   Reactions: russ_watters and BWV
Real investing is a positive sum game - both the investor and the investee can benefit. Crypto is not even a zero sum game - it’s negative sum given the environmental impact and opportunity cost of the resources employed in mining
 
Reply
  • Like
Likes   Reactions: phinds, artis and russ_watters
BWV said:
it’s negative sum given the environmental impact and opportunity cost of the resources employed in mining,
,and the bank accounts for most of those that participate...
 
https://arstechnica.com/tech-policy...dealing-arent-fraud-seeks-to-dismiss-charges/
SBF says “dishonesty and unfair dealing” aren’t fraud, seeks to dismiss charges
SBF says US is criminalizing acts of dishonesty
One of the memos supporting Bankman-Fried's motion to dismiss repeatedly paints the FTX founder as being perhaps guilty of lying, but not guilty of violating US laws cited in his indictment.

That memo, for example, concedes that Bankman-Fried and co-conspirators lied on a US bank application to open an account to receive FTX customer deposits after the bank had previously rejected an honest application. But just because the bank "was deprived of the opportunity to conduct 'enhanced due diligence' and executive committee review before opening the account," that doesn't mean that Bankman-Fried committed bank fraud, his lawyers argued. To find him guilty of bank fraud, the US would have to prove that Bankman-Fried either deprived the bank of “moneys, funds, credits, assets, securities” or caused banks to risk suffering "economic harm" from losing the "right to control" access to its bank accounts, lawyers argued.

The same argument, lawyers wrote, applies to allegations that "Bankman-Fried engaged in a scheme to defraud Alameda’s lenders by providing them false and misleading information regarding Alameda’s financial condition" or wire fraud allegations that he "misused FTX customer funds by providing improper loans to Alameda."

"Simply making a false statement, by itself, does not constitute wire fraud unless it is made for the purpose of obtaining money or property from the victim of the fraud," Bankman-Fried's lawyers wrote..
 
gmax137 said:
Lol, reminds me of, "what does "is" mean?"
Since when are crimes illegal? "pound the table"
 
Somehow this reminds me of "The issue is not whether we broke a few rules, or took a few liberties with our female party guests. We did."



Realistically, what can he say? Some other dud did it? His only real defense is thay his actions do not rise to the level of a crime, or at least not the ones he has been charges with.
 
Vanadium 50 said:
Somehow this reminds me of "The issue is not whether we broke a few rules, or took a few liberties with our female ...
I love the way he winks at Dean Wermer
 
Atomic wallet (a closed source hot wallet) has suffered a breach, thousands of people's funds are being drained. I do not understand why people use a closed source wallet to keep their funds, as even noobs know that security throufh obscurity doesn't pay off in the long run.

Ledger, a Feench company selling ''cold wallets'' just revealed they would perform a firmware update that would allow the extraction of.the seeds of their users on the Internet, which defeats the purpose of owning such a wallet. They made false advertising claiming it was physically impossible to do so, and now if a police warrant ask them the seeds of anyone, they will just comply. Another closed source security mistake.
 
fluidistic said:
Another closed source security mistake.
Rather, selling such kind of wallet was a teeny bit fishy to start with...
If crypto (and all or any part of that) is expected to become some kind of legit banking/investing/money transfer thing then compliance is expected, regardless of any previous advertising about being 'restraint and authority free'.
 
Like all crypto exchanges, Binance is a criminal operation.
https://www.reuters.com/legal/us-se...lleging-securities-law-violations-2023-06-05/
The SEC also alleged that from at least September 2019 until June 2022, Sigma Chain, a trading firm owned and controlled by Zhao, engaged in wash trading that artificially inflated the trading volume of crypto asset securities on the Binance.US Platform....

Binance's global trading platform, Binance.com dominates the crypto trading landscape, last year processing trades worth about $65 billion a day with up to 70% of the market.

The firm has processed at least $10 billion in payments for criminals and companies seeking to evade U.S. sanctions, Reuters has previously reported.

Reuters also reported on May 23 that Binance commingled its customers’ funds with its corporate revenues in Silvergate Bank account belonging to trading firm Merit Peak, in breach of U.S. financial rules that require client money to be kept separate.
 
https://www.sec.gov/news/press-release/2023-102

SEC Charges Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency​

“We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler. “In other parts of our securities markets, these functions are separate. Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC. Further, as we allege, Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections.”
...
The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, alleges that Coinbase and CGI violated certain registration provisions of the Securities Exchange Act of 1934 and that Coinbase violated the securities offering registration provisions of the Securities Act of 1933. The complaint seeks injunctive relief, disgorgement of ill-gotten gains plus interest, penalties, and other equitable relief.
 

Cryptocurrencies II: Last Week Tonight with John Oliver (HBO)​


 
Reply
  • Love
  • Haha
Likes   Reactions: Klystron and nsaspook

Binance CEO's trading firm received $11 billion via client deposit company, SEC says​

https://finance.yahoo.com/news/binance-ceos-trading-firm-received-182401221.html

LONDON (Reuters) - Merit Peak, an offshore trading company controlled by Binance CEO Changpeng Zhao, received around $11 billion of client assets through a Seychelles-based firm set up to take customer deposits, a U.S. Securities and Exchange Commission filing shows.

The SEC filing, which on Tuesday asked a U.S. court to freeze Binance's U.S. assets, came a day after the SEC sued Binance, its billionaire CEO Zhao, and the operator of its U.S. affiliate exchange, for allegedly operating a "web of deception."

In its 13 charges, the SEC alleged that Binance and Zhao used Merit Peak and Sigma Chain, another trading firm controlled by Zhao, to commingle corporate funds with client assets and use the monies "as they please." This put customers' assets at risk while Binance sought to "maximize" its profits, the SEC wrote in its civil complaint on Monday.

. . . .
I wonder if those who bought Binance's digital currency can redeem them for real $ and put them in real banks. Do investors even 'own' their digital currency?
 
Billionaire Cameron Winklevoss, co-founder of the Gemini Trust Co. crypto platform, outlined what he termed a “best and final offer” for digital-asset lender Genesis Global Holdco’s bankruptcy restructuring.
https://finance.yahoo.com/news/billionaire-winklevoss-outlines-final-offer-032155738.html

The whole organization seems dodgy.

Billionaire starts a company, or maybe he was a millionaire, then became a billionaire by collecting investments claiming to pay high rates of return. Company goes bust but the billionaire keeps the money he payed himself?