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Notices tagged with cryptocurrency
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@gnu2 These people sought to "invest" their #cryptocurrency in interest-bearing accounts. Now, I haven't done any crypto investing, but my impression is that there are some smart contracts that one can use without turning control over to a company in order to lend & receive interest. But seeing that the ToS / ToU language appears to be widespread, people should be *immediately* trying to redeem & withdraw their funds.
But you are correct that giving control to someone else is a mistake. (Indeed, even #FTX customers could only have lost money to the extent that they didn't immediately sweep their funds out of FTX's custody.)
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https://www.axios.com/2023/01/04/celsius-bankruptcy-earn-accounts | https://nu.federati.net/url/289204 [www axios com & web archive org]
#Bankruptcy judge in Celsius case rules that #cryptocurrency deposits belong to the company, not the depositors (who are now unsecured creditors). This appears to be based on contract language, but I wonder how this would go with a "M of N" type arrangement, where the company is unable (not just by internal policy, but enforced by smart contract) to touch depositors funds without those depositors' allowance.
(Also, I wonder what the legal gobbledegook that cryptocurrency exchanges make people sign has similar clauses.)
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It still means, however, that the exchange's customers got hurt because they didn't keep their balances at or around zero, as they should. When $ORGANIZATION encourages you to let them keep custody of your assets, they're probably not doing it just because it is more convenient for you, but because it makes it easier for them. And as you've seen, one of the ways it makes it easier for them is that it leaves assets lying around for them to pilfer.
An exchange should be pass-through and make its money on transaction fees. A bank is storage, and makes money by using your stored funds, along with fees. And when you're talking about #cryptocurrencies, you should be very explicit about the purposes for which you're using an intermediary, due to the whole _the person who holds the private key for the wallet where your #cryptocurrency resides effectively owns your cryptocurrency_ thing.
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Also: https://nu.federati.net/url/289047 [news bitcoin com]
U.S. Congressman Warren Davidson: Self-custody #cryptocurrency wallets are an antidote to #FTX style scams, because they can't steal money / #cryptocurrencies from wallets they don't control.
He's absolutely right, and that's how the exchanges are supposed to be used, but with few onramps and offramps, people tend to leave their investments in their custodial wallet (e.g., the one where the exchange controls the secret key, not the customer) where bad things can happen.
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https://nu.federati.net/url/289046 [cointelegraph com]
Former #Alameda CEO confirms they illegally borrowed billions from #FTX customer deposits without their permission.
Can we start to understand #Alameda and #FTX as finance-oriented scams and not just #cryptocurrency related businesses? Even regulated financial industries have this sort of behavior (I keep going back to Wells Fargo, but they aren't the only one).
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One of the reasons why people left money in #cryptocurrency exchanges (which violates all the precepts of using #cryptocurrencies) is because of the lack of on-ramps. If #FTX's customers maintained near-zero balances, there would have been no money to steal to prop up #Alameda_Research. That lack of on-ramps, by the way, is due to financial regulations.
Likewise, there would be no need for exchanges to provide "proof of reserves", because they'd only need to hold enough reserves to handle expected transaction volume.
As I read the financial news, I'm ever more convinced that the standard financial system's built-in racism will never be fixed. It exists at every level from regulators to Joe Banker who denies you a loan to buy a used car, and is reinforced from the top, but means of regulations and orders that often disguise their effect in high-sounding phrasing.
When I read "Bitcoin and Black America", I felt like he overstated his point, but his point--that Blacks need to get out from under the racist financial system and find a way to fund their own businesses and jobs outside of it--still stands. Even though I'm not wedded to cryptocurrencies, I believe they offer the best shot at doing this of any financial medium I've ever heard of.
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#FTX co-CEO reported that customer funds were being transferred to sister company Alameda Research. https://nu.federati.net/url/288939 [cointelegraph com]
#crime #fraud #cryptocurrency #sbf #bahamas #sec
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https://www.politico.com/news/2022/12/12/ftx-founder-bankman-fried-arrested-in-the-bahamas-00073597 [www politico com] #FTX #cryptocurrency exchange ex-CEO arrested.
> Bankman-Fried’s arrest comes the night before he was scheduled to testify remotely in front of the House Financial Services Committee, which is investigating the collapse of his multibillion-dollar crypto empire. Bankman-Fried — who until early November was the toast of Washington policy circles — has faced mounting allegations that he misused FTX customer assets to prop up his investment firm Alameda Research.
> In prepared testimony for House Financial Services, the company’s new CEO John Ray III, wrote that Alameda used client funds to engage in margin trading, exposing customers to massive losses.
> "[T]he FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets,” Ray, who stepped in as the bankrupt cryptocurrency exchange’s top executive last month, wrote in prepared Congressional testimony on the exchange’s collapse.
If he was going to try to follow #Wells_Fargo's example, he needed to follow it more closely. I recently posted a link to angryretailbanker's article where they described why they didn't believe WF's top managers should be jailed. (I personally disagree about Wells Fargo management, simply because if you see the same misbehavior sprout up at the same time across the whole organization, it generally means one person or group with supervision over the entire group ordered or suggested it ... often off-the-record, so you'd have to actually investigate to find enough evidence to convict.)
#cryptocurrency #finance #crime #fraud #theft
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At one time, #Daddy_A had a small amount of #BTC ( #Bitcoin ), a small amount of #BCH ( Bitcoin Cash https://bitcoincash.org/ ) and an even smaller amount of #BSV ( Bitcoin Satoshi's Vision https://bitcoinsv.com/ ). I should ask him whether he still has any #cryptocurrency.
It sounds like BSV had some good ideas, but I think most of those were already in the pipeline before BSV split from BCH. I'm talking about things like increasing the block size, so that more transactions can be processed in each ten minute interval. BSV currently has a market-determined variable block size and BCH has a 32MB block size. The original BTC still uses 1MB ... which causes contention for fewer slots inside the block, and raises both transaction costs and the average wait time for transactions to process. AFAIK, BSV is the only member of the Bitcoin family to give major attention to smart contracts ... including creating a new scripting language ( "sCrypt":{https://scrypt.io/} ) to make them easier.
IMO, "smart contracts" make it easier to create non-financial applications for #blockchains and other ledgers.
BSV is also tainted by Craig Wright's claim to be Satoshi Nakamoto, the inventor of Bitcoin. https://www.coindesk.com/layer2/2022/10/21/in-craig-wright-verdict-reality-prevails/
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https://nu.federati.net/url/288784 [www coindesk com]
#cryptocurrency exchange #Coinbase to end support for #Bitcoin Cash #BCH, #Ethereum Classic #ETC, #Ripple #XRP, #Stellar #XLM #cryptocurrencies.
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#FTX fraud: This wasn't an accident. https://www.youtube.com/watch?v=FDqhM7vHR2o [www youtube com]
#cryptocurrencies #cryptocurrency
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@gnu2 I think the issue is on-ramps. Most people get an account at an exchange in order to get involved in the #cryptocurrency space. It then takes extra steps to move all one's purchases into a self-custody wallet. Not to mention that there's a transaction cost for moving from one's exchange-custody wallet to one's self-custody wallet and a similar cost if one wants to move it back.
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https://nu.federati.net/url/288704 [www cnbc com]
#FTX former CEO #SBF says he did not intend to commit fraud.
> triking a contrite tone, former FTX CEO Sam Bankman-Fried said he “didn’t do a good job” at upholding his responsibilities to regulators, customers, and investors in a hotly anticipated conversation with CNBC’s Andrew Ross Sorkin at the Dealbook Summit.
> “I didn’t ever try to commit fraud on anyone,” Bankman-Fried said. “I saw it as a thriving business and I was shocked by what happened this month.”
> Sorkin asked Bankman-Fried why FTX and Bankman-Fried even had access to customer money.
> “I wasn’t running Alameda, I didn’t know exactly what was going on, I didn’t know the size of their position,” Bankman-Fried said. “A lot of these are things I’ve learned over the last month [in the days leading up to bankruptcy.
Now, what seemed to have sunk the platform was the revelation that his #Alameda fund was heavily into FTX's own #cryptocurrency #token ... and then later learning that customers' FTX account funds had been moved into Alameda. If he'd let customers' funds alone and not drained from the exchange to support the investment fund. ( https://nu.federati.net/url/288705 [www cnbc com] )
> The quant trading firm Sam Bankman-Fried founded was able to quietly use customer funds from his exchange FTX in a way that flew under the radar of investors, employees and auditors in the process, according to a source.
> The way they did it was by using billions from FTX users without their knowledge, says the source.
> Alameda Research, the fund started by Bankman-Fried, borrowed billions in customer funds from its founder’s exchange, FTX, according to a source familiar with company operations, who asked not to be named because the details were confidential.
If he'd not allowed the misuse of customer funds, even if Alameda collapsed, FTX probably would have continued with little disruption.
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https://www.cnbc.com/2022/11/30/crypto-exchange-kraken-lays-off-1000-employees.html [www cnbc com] (link via @geniusmusing)
#Kraken, the 3rd-largest #cryptocurrency exchange, lays off 30% of its workforce, returning to the size it was late last year. Employees will receive 16 weeks of severance pay and benefits vesting will be extended. (Much better than what the Lane furniture company did.)
This could be more fallout from the failure of SBF's #FTX and associated companies, or it could be cyclical economic factors ... as cryptocurrency prices seem to rise and fall with the general economy.
!econusa
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https://www.coindesk.com/layer2/2022/11/10/the-role-regulators-played-in-the-ftx-fiasco/ [www coindesk com]
The role regulators played in the #FTX fiasco.
Makes the case that the #cryptocurrency industry needs to be regulated like other financial industries.
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Cryptocurrency exchange #FTX facing troubles as potential acquirer #Binance reviews the books.
https://nu.federati.net/url/288419 [www coindesk com]
https://www.nbcnews.com/tech/tech-news/binance-ftx-acquire-crypto-rcna56266 [www nbcnews com]
https://nu.federati.net/url/288420 [www coindesk com]
https://nu.federati.net/url/288421 [www coindesk com]
#cryptocurrency
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https://cointelegraph.com/news/hetzner-anti-crypto-policies-a-wake-up-call-for-ethereum-s-future #hetzner clarifies its policy: no #cryptocurrency, #blockchain, or related projects allowed; a chunk of #Ethereum nodes are currently located there.
Also some smaller coins’ nodes are found there.
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https://nu.federati.net/url/287438 [www bleepingcomputer com]
200+ #npm and #pypi packages caught dropping #Linux cryptominers.
> These packages are largely typosquats of widely used libraries and each one of them downloads a Bash script on Linux systems that run cryptominers.
> It appears that both registries cleared the typosquats fairly quickly from their platforms before these could do more harm to developers.
This appears to be a characteristic behavior of #monero / #xmr #cryptocurrency users. This is by no means the first wave of mining attacks against servers.
Source: https://freeradical.zone/@thenewoil/108852026058423028
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#ECB discusses cross-border payments. https://nu.federati.net/url/287239 [www ecb europa eu]
#Bitcoin #Cryptocurrency #BTC #Ripple #XRP
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So one thing about #Coinbase collecting data for #ICE / #HSI is that most people do not expect their #cryptocurrency transactions to be tracked and reported.