The web3/crypto community seems to select for individuals with an almost proud ignorance of the law and state power. The same personality that can make a 21st-century gold bug pitch (e.g. a world on crypto is one without wars, Bitcoin is impossible to ban, or Luna is magically stable et cetera) is one that reacts to an arrest warrant by no showing and tweeting.
You know, it's kinda funny that you mention gold bugs. Because gold shares a lot of properties with Bitcoin, and therefore should be considered a sham by most of HN. Yet somehow it sits currently at $1,670/oz and is owned by all major central banks in the world.
> gold shares a lot of properties with Bitcoin, and therefore should be considered a sham by most of HN
Gold and gold buggery are separate. Gold and silver have deep precedence as money. They're also useful commodities. Gold buggery involves retail investors disproportionately allocating to gold as a buy-and-hold asset, often with emotional attachment. Those buying crypto because it's going to free the world or whatever resemble the latter.
> Central banks definitely don't own gold because it's such a useful commodity. Are central banks gold bugs?
Are central banks retail investors? Are they buying gold to "to free the world or whatever"? No [1]?
Gold and silver have deep precedence as money. This leads to them trading as haven assets, i.e. their price rises when financial conditions deteriorate. Bitcoin doesn't. It trades as a risk asset, i.e. its price falls when financial conditions deteriorate. This could change! But that's true of literally every thing traded.
No, it doesn’t. The evidence is crypto trading as a risk asset. People believe it could one day trade as a haven asset, but that hasn’t happened yet. Not close.
We could argue (and agree) that Canada isn’t major, but their central bank sold off their bullion gold reserves ~ 2 decades ago. And finished off its hodl of gold coins ~7 years ago.
Canada did it to increase diversity of investment "investing in financial assets that are easily tradable and that have deep markets of buyers and sellers"
The truth is probably based on the money they received from selling the gold as a retail coin
Judging from empirical results it is quite easy to steal crypto currency; it happens all the time. I don't know why you only care about those two approaches.
Gold scams have been around for a significant number of decades. Bitcoin has been hyped to death for its entire existence, in spite of the "properties" it shares with gold.
Exactly. There are plenty of other precious metals that could have been used for the same purposes as gold (e.g., platinum, palladium, iridium). But they aren't. For various historical reasons.
But elements are not interchangable and have important differences in properties, difficulties in refining, and workability.
Gold is tremendously useful for many applications and I believe all that you mentioned are brittle in comparison. I believe it's also rarer than a few on that list.
Mainly, I've heard a few people in my life contend that we only arbitrarily decided that gold has a use, or that it's mostly hype. I don't think that's the full case. It's workable, useful, biocompatible, profitability extractable, and obviously stunningly pretty. Not so much just culturally significant just on a whim or something, it's useful.
So it's a counter-culture thing like hippies and punks of the past? I thought those all died with moderated social media.
Is it at all about "sticking it to the man" or is it purely profit motivated (by the followers of those individuals)? It's most likely a mix of the two, but to what degree.
A lot of the crypto culture is IMO not counter-culture, but almost "hyper-culture". Crypto lives on hype. Most rhetoric used by the likes of Do Kwon is focused around building hype for their particular brand of crypto, hoping to entice other people to invest in it.
They may use some terminology that sounds similar to counter culture at face value (eg "stick it to the big banks!") but they aren't doing this in the counter culture mode of rejection, they are simply using it as a sales pitch towards moving more crypto.
Generally: if you’re trying to fix something, understanding how it works is usually a good start.
Specifically: pompous ignorance leads to gross negligence and criminality so stupidly brazen a B-list editor would send it back for being unbelievable. The sort that is rampant in crypto/web3.
Yes the fix is clear to me. Remove KYC+AML from the banking/monetary system. The expansion of crypto is in part a response to a pompous ignorance of government officials, attempting to impose a search of your papers merely for banking and the government implementing policies so stupid even a B-list editor wouldn't believe it.
The government failed so other actors came in, then everyone made a sad face that when the government failed alternatives were found.
>Luna's downfall and Do Kwon's pending red notice have nothing to do with KYC or AML.
I disagree here. The 'killer app' feature of crypto is that it's basically imperfect banking without KYC/AML. Without crypto's popularity it's doubtful Do Kwon and Luna would have gotten such a foothold.
The legislature ripped quite a bit of privacy and freedom from the banking system post 9/11 on an almost blind rampage, without doing much stopping and asking why things were they were. I admit it was the ultimate Chesterton's fence fail on the government's part and likely a big reason why a new fence seems to have been built with crypto.
Honestly even bitcoin the white paper seems to have had more thought poured into it than the Patriot Act, which kicked off much of the KYC reforms in the US. In reality I think many of the adopters of cryptocurrency realized exactly the dystopia that the banking system was going down and very deliberately tried to take some of the failures of government into account.
Clearly anyone not happy with (or seeking alternatives to) the post 9/11 banking surveillance apparatus must be cast down as a nefarious character who isn't fooling anyone.
Look: current financial regulations in the US and Europe mean we’ve been leapfrogged by Africa: M-Pesa etc.
Don’t disagree, but throwing the baby out with the bath water and going full raw dog lets speed run the entire history of financial fraud is not a good idea.
Large scale infrastructure? Yeah that's pretty much always built by governments. This has held true for millenia, over hundreds of different societies. But yeah, just a fluke I'm sure. Thank God crypto is here to knock some common sense into the world.
Women in a high elected office? Up until the 1920s men were pretty much always governors in the United States. That held true for hundreds of years, over hundreds of different elections. But yeah, just a fluke I'm sure. Thank god women are here to knock some common sense into the world.
Transport on land? Yeah that's pretty much always done by horse. This has held true for millenia, over hundreds of different societies. But yeah, just a fluke I'm sure. Thank God mechanized vehicles are here to knock some sense into the world.
>Yeah that's pretty much always built by governments.
Yes definitely, that's why I can never find privately refined and delivered gasoline, have goods shipped internationally except through a nationalized shipping company, and can't find a private company to deliver my last-mile internet or cell-phone service.
Surely you realize that if the power vacuum isn't filled by a democratic or mostly democratic or even somewhat democratic government, it will be happily met by a despot or a warlord?
The steady state of parts of the globe that don't have governments is 'government, but by cartels or warlords or revolutionary people's liberation armies'.
Which have all the powers of governments, without any of the self-constraints, legal processes, protected abilities for petition or redress, or mechanisms for peaceful transfer of power.
Given South Korea's fairly lenient prison sentences [0] (or maybe I'm just biased up by the very long US sentences) and that South Korea has a history of not extraditing to the US [1], I don't understand why he would risk worse leaving the country and trying to evade South Korean authorities.
There is zero chance they’re falling for crypto. This is a problem for the gambling masses. To the degree it harms any elite, it’s by introducing political instability in Korea and reducing Singapore’s standing as a stable financial centre.
a) Screwing over a large amount of the Korean population is screwing over the korean elite(because it creates a populist outcry) (I lived in Korea for years. And I can tell you that a way higher percentage of the population is betting on crypto than in western countries
b) This appears to be across the socio economic spectrum. If you think there aren't a ton of rich people throwing money into crypto I guess I'll just say I think you are wrong.
81% of the Madoff losses were recovered (not including funds paid for taxes on false gains), not so in the land of "web3", "defi", and "ico". Through innovative meta-scam-blockchain technology they manage to "accidentally" substantially all the monies.
I'm trying to square this with the info on the Wikipedia page. Is this just "The Madoff Recovery Initiative reported $14.418 billion in total recoveries and settlement agreementse" divided by "of which $17.3 billion was actually invested by customers?" If so that's even better at north of 83%.
Madoff recovery amounts are based on how much cash the investor put in, not what their statement said their balance was just before the crash. So long-term holders get none of their supposed profits. The longer someone invested with Madoff, the more they lost.
The recovery project is only for direct investors with Madoff. Those who bought into "feeder funds" which fed into Madoff's fund don't get anything directly. There's other litigation involving feeder funds, which can recover something from the Madoff recovery and pay it out to their holders.
The recovery initiative got back billions of dollars through clawback lawsuits, where they went after people who'd cashed out of Madoff's scheme before the crash. Those people were effectively participants in the scam, and they profited from it, so they don't get away free.
If you can track the money, you can un-do a Ponzi. The amount of legal effort is huge, though.
How can you undo spending on lavish consumables? If he bought a watch for $100,000,000, you’d be lucky to recover a few % of that. Sure, properties and such would likely appreciate in price but the actual detangling process is extremely expensive too!! Still am glad the victims could recover anything at all!!
The vast majority of Madoff's victims were middle class pensioners who had their entire lives upended because their fund managers trusted the wrong person. In this case it's hard to feel any sympathy for crypto speculators.
Madoff's core operation was based on scamming rich Jews in New York City, Palm Beach, Florida, and Hollywood. In each location, he had a prominent Jewish leader steering investors to his fund. Ezra Merkin handled New York, Stanley Chais handled Hollywood, and Madoff himself worked the Palm Beach Country Club. This was very much an in-person scam. A long list of celebrities lost big.
That's why the recovery operation was so long, so extensive and so successful. The major victims were well connected, could afford expensive lawyers, and collectively, they had a lot of clout.
The crypto world tends to have less well connected suckers.
Your point would not be weakened if you left ethnicity out of it, but risks coming across as un-credible and conspiracy driven with the addition. I'd recommend an edit.
No, he's not accusing Jews of "running the world" or anything like that. It's a fact that Madoff focused on finding victims of the Ponzi scheme in his community, which is not at all unusual (MLMs often encourage their participants to sell to their friends and acquaintances, for example). As a well-off American Jew himself, Madoff went after his community of well-off American Jews, calculating correctly that their in-group trust would make them easier targets.
It's also a fact of the world that the rich are generally better able to pursue legal action to recover money that they've lost than the poor. The fact that these rich people were Jewish doesn't make much of a difference here (not to mention that the Madoff scheme was extremely infamous after it imploded, so it was more likely to receive resources to rectifying the wrongs that Madoff dealt as compared to an equally-damaging but less well-known scheme).
Here's a writeup in Jewish Journal at the time.[1] Wikipedia for background.[2]
Madoff is important in relation to crypto scams for a number of reasons. He showed how to run a successful Ponzi - pay good, but not unreasonable returns, and be very reliable about servicing withdrawal requests. That kept the scam going for 17 years. Few Ponzis last that long. Most of the crypto Ponzis can't manage either of those goals, but the "staking" crowd is trying. "Staking" is really just a High Yield Investment Program.[2]
(There's real staking with proof of stake Etherium, where you're guaranteed by smart contracts to get back the ETH you put in, although it might be worth less when you get it out. But most of what's called "staking" is just a loan.)
The overall market collapse in 2008 finally caused a collapse of Madoff's scheme. This, too, is typical of crypto schemes. They can't survive a downturn. As long as "line goes up", it's not clear what's a Ponzi. People who point out that the numbers don't work are derided for spreading "FUD". When line goes down, the whole thing collapses. Which is what happened to Terra. The relationship between TerraUSD and LUNA (now LUNC) didn't help, either. The stablecoin maintenance system minted unlimited amounts of LUNC trying to prop up TerraUSD.
The end result was LUNC dropping from $117 to $0.0003051, with a total supply of 6,904,017,889,662 LUNC. The $1 stablecoin dropped to $0.03497. (Forum comment: "Don't worry,don't be afraid. The whole market has collapsed. Buy & Hold. Luna Classic pump will start soon." This is typical of mass-market Ponzi schemes - even after being fleeced, many sheep retain hope. There's less of that at the high end, where investors usually kick themselves for being suckered, then lawyer up.)
Key takeaway: little of what happens in crypto is new. Most of the schemes go back to at least the 18th century. Most crypto enthusiasts don't know enough financial history to get this.
I saw a docu portrating something like that. He apparently was doing his friends a favor and of course in the jewish communities he was a fellow who had the secret sauce to steady great returns in addition to a very good reputation. I’m sure there were doubters too but his long track record spoke for itself. A lot of those people had charitable orgs that were completely wiped out. His sick thinking was something like people are greedy and so they more than deserve to lose their money. Thing is folks who’d want to get out would be convinced to stay in afraid he’d never ‘invest’ their money again.
It’s alleged he transferred vast sums from the terra treasury to his personal wallet. South Korea is a relatively lenient jurisdiction with a high penetration of blockchain products. But if these accusations are true, it is a case of theft rather than failed innovation.
At least a quarter million South Koreans lost money. If he is returned to South Korea, he’s going to prison regardless of whether or not he deserves to. That’s how the world works, IMO.
I am not sure you can be sent to jail simply for creating something that turns out to be a bad investment. (goes to 0) This is true even in the arguably more regulated stock market.
That being said it seems like there is more to his story than buggy code.
If enough people are pissed at someone for something, the government will find a way to throw them in jail.
Take Martin Shkreli, for instance. I don't doubt that he was probably guilty of what he was charged with (unrelated to his price hikes of drugs), but I doubt he would have been charged if not for his infamy otherwise. I suspect what he was charged with would also encompass many other business people in the US who are less infamous.
The developer of Anchor told Do Kwon that Anchor wasn't safe but Do Kwon overrode him and deployed it anyway. That's getting into fraud territory because he knew it was going to collapse.
> getting into fraud territory because he knew it was going to collapse
Fraud requires intent in most jurisdictions. This looks more like gross negligence (and possibly embezzlement). In addition to, likely, a host of money transmission law infractions.
- "none of us were notified of this at all; when i found out about this, the south korean prosecution told me they usually don't notify people of this because they might destroy evidence and/or leave the country beforehand"
- "tbh people being treated as potential criminals like this is absolutely outrageous and unacceptable"
Do you think really $43 billion lost? Or rather that was the theoretical peak valuation? It just seems a staggering amount of money to be available for a new startup crypto project.
Your point is obviously correct and a good reality check, but it sparked a curiosity: Why don't we routinely treat financials reported in this way in the same manner? It seems we do take these "peak valuation" projections a bit on face value and compare potentially high-illiquid assets which are priced at that number with straight up cash in ways that (like this example beautifully illustrates) are , if not outright incorrect, probably very misleading in terms of being an accurate representation of reality. Why is that?
I guess the simple answer is the largest number makes for a more exciting artical. And how many journalists actually know and understand the details anyway. I do wonder what the actual amount of hard cash that was lost was. I guess five hundred million dollors lost in confusing crypto project in a land far away is not as snappy as $43 billion lost.
Countries have extradition treaties. Hell even when they don't if you're a diplomatic nuisance you'll be thrown on an airplane- which is what happened to a Dutch drug cartel leader in Dubai.
