I don't understand why crypto is as big as it is, it only serves as an enormous grift.
I only hope for more exchanges to fail, (Binance, Bitfinex, Kucoin, Huobi, Crypto.com, Kraken, etc)
The recent take down of an exchange by the DOJ got me excited that this is finally going to take down crypto prices completely and that everyone will start to forget about them and move on.
“Oh, you think multi-level marketing shouldn’t exist? It’s a form of storytelling so apparently you want to destroy all stories, you mean old culture-hater and book-burner.”
Some of them seem to believe they invented _cryptography_, so, well, probably. I've seen crypto people genuinely convinced that it is impossible to sign something without the Almighty Blockchain providing its blessing.
US is a funny place, you can't transfer from one international flight to another without entering the country.
So flying from UK to Mexico with a stop in Miami will involve immigration and all the jazz in Miami (including the need for a visa if your passport normally requires it).
This is usually not the case in Europe. You stay in the non-schengen transfer zone and walk from one gate to another.
Even without formal immigration controls for transfer passengers I'm sure the European authorities are quite capable of consulting the flight manifests and arresting you in transit if they desire.
What’s the reason for you thinking it’s an enormous grift? I ask as someone who has read enough to feel it is useful and have a hard wallet with some bitcoin (well not a full bitcoin) but I am not into it enough to do anything stupid or evangelize it to others. So, you feeling the whole thing is a grift, I would really like to know if I’m missing something.
It's been in vogue for a couple months. The meta issue is that it lost a ton of value as a store. But so did many many stocks. Idk percentage wise how many companies lost a greater percent of their stock value than Bitcoin has in the past year, but we don't call them grifts. I think digital assets and coins are a pretty neat technology, much of the last bubble was solutions looking for problems. But it's how it goes.
I mean, so do digital assets. There is plenty of bullshit out there, but when Nikola had a market cap of 14 billion based on someone pushing a hollowed out semi truck down a hill, is that radically different?
I don't see it as radically different. And Nikola still has a market cap of 1 billion. The idea of digital assets, of trustless contracts, its still very very interesting to me. That a bubble formed and popped is more of a 'well of course it would' result to me than something to be feared.
And maybe someday Nikola solves the truck thing and dominates shipping. I don't know.
I think they whining about coins being a vehicle for speculation is puritanical hand wringing. Especially when it comes from the left and is focused on how people, who were quite literally engaged in speculation, lost money.
It has almost no usage as a money transfer system, but it has essentially replaced all other forms of get-rich-quick schemes peddled on retail investors.
Last week I was in a developing country. The amount of crypto-related advertising was striking. And none of it was about remittances. These ads were not saying “Here’s something better than Western Union.” No, they were showing trading screens on a mobile app with shitcoins going to the moon.
I believe Western crypto enthusiasts are badly in denial about the volume seen on third world exchanges. The people putting their nairas or liras or whatever into crypto are not doing so because they think it’s a great system to send money internationally and because they don’t believe in central banks. They’re only doing it because a local influencer on YouTube told them it’s how you get rich.
(Of course everybody in the West buys crypto for that same reason — maybe the source of the “insider tips” is more often Twitter, but the motivation is the same. The important point is that third world crypto adoption is a core narrative told by crypto pumpers, and it doesn’t exist any more than first world crypto adoption.)
They aren't badly in denial. They KNOW exactly how grifty the whole thing is. They KNOW that things like mpesa and similar exist in a lot of the supposedly developing world, and that the US banking infrastructure being stupid is more a matter of lacking policy than lacking technology. They KNOW that stupid "play to earn" game only really gave a few thousand people in the Philippines an income, while thousands and thousands more spent hundreds of real dollars to buy in and play and spend over ten hours a day "playing" a "game" that is closer to a slot machine than anything else. They KNOW that concept was no different to trying to earn a living by buying, opening, and selling CS:GO cases.
They don't care, or ignore these things, because eventually everyone figures out that there's not much to do with or for crypto that isn't scamming someone out of money or providing a vague crypto adjacent service. Nobody wants to buy regular products with crypto because for normal people, it is a pain in the ass to participate in crypto without getting scammed, and for crypto diehards, they know any dollar spent in the crypto ecosystem is inefficient because they are often purposely deflationary assets. They know that they spent a shitload of their savings on shitcoins, and that if the crypto world continues to struggle, that's an existential threat to them. They know that people NEED to buy in so that the price can go back up so they can cash out and save themselves. It's no different from desperate people in an MLM getting pushy with their facebook friends because they have $2000 in credit card debt buying Dotera product to stay "in their tier" or whatever nonsense the particular MLM uses, and the only way to get money back out of it is to become a conman.
The reason why it is an enormous grift is that Bitcoin has failed in its original aim to be used as a means of payment. It is completely slow, volatile and the majority of people use it speculate on exchanges.
The current price of Bitcoin is pumped up by Tether and it is only a matter of time till the entire thing crashes down.
For comparison, UPI achieved its aim of fast payments in India MUCH quicker than Bitcoin ever did in it's nearly 15 years of its existence and now UPI is expanding.
Because it's not pragmatically useful, and the speculative nature of it attracts enormous amount of grifty/spammy types of money and people. There is a reason most of it offshore, there is a total lack of transparency etc..
It's used because it solves a problem: 'trustless' transfer of value (in that you trust the network and not a centralized authority). It's 'big' because people who don't have this problem speculate on Crypto, even if they don't need trustless transfer of value.
How else would I pay a cybercriminal without Crypto? I ask this in good faith, I genuinely don't know of any other methods. Unfortunately the current method uses lots of resources, which I'm guessing is why you hate it so much. I'm all for better alternatives, but what are they?
How big is the 'trustless' part of the ecosystem? 5%? 1%? Most of the speculation happens on centralized exchanges which very much involves (completely unjustified) trust.
Wikipedia tells me there are in fact a hair under 19 million Bitcoin minted. I am willing to believe this site is getting the large exchange component right, or at least conservatively right (conservative in that it's unlikely to be claiming coins that don't exist, but it's possible exchanges have additional coins not listed, and it's possible there are other exchanges not listed).
Googling, it seems that the best estimates seem to indicate between 2 and 4 million Bitcoin are permanently lost (lost keys, known hardware failures of failed wallets, unclear if this counts Satoshi's million bitcoins or not). This estimate [0] by an analysis firm who appears to be broadly pro-crypto suggests 3 million lost, and that ~14.5 million BTC are "illiquid". Illiquid obviously doesn't mean lost
Illiquid doesn't mean lost, but it suggests something to me about the current conversation. If only ~4.5 million BTC are even a little bit liquid, then it's fair to say that at least half the engagement with BTC in balance terms is on exchanges, and probably more considering velocity of money. Not the grandparent's claim of 99%, but also not your claim of 10%. At the very least, not an obviously settled question.
These systems have proven to work better than what we have now with crypto which is full of unregulated, volatile fictitious tokens that attract offshore exchanges.
Funny how developing countries have come up with better solutions to what crypto was trying to solve for them in payments, but crypto failed in doing just that.
I’m not going to repeat my explanation from my parent comment. The fact that you can’t form a rebuttal shows that you do not understand the value proposition. I suggest reading the original bitcoin white paper. If you can understand it then the differences with the systems you mentioned will become obvious.
> How else would I pay a cybercriminal without Crypto?
You don’t. That is the point of laws.
In good faith, the commenter specifically mentions the DoJ. People want laws against cybercriminality because it hurts them. Your argument is similar to answering “I hope AR-15 rifles get abolished” with “well, how else can I do a mass shooting?”
Illegal doesn't necessary mean that something is morally wrong. I'm all for making ransomware actors life harder, but it should not come at the cost of also affecting regular drug buyers/sellers.
Exactly. It’s like the folks who say these things don’t understand they are defending criminal activity. Now, one can argue things like the sale of “illegal drugs” shouldn’t be illegal in the first place, but that’s an advocacy issue not solved by decentralized payments. All you do with decentralized payments is make it exponentially more efficient to engage profitably in illegal activity. Not exactly ideal given much of what constitutes illegal activity is well deserved to be outlawed (sex trafficking, murder for hire, etc…)
How about decriminalized drugs? There's also still on-going issues with getting bank accounts if you're handling decriminalized drugs like marijuana. There was even an attempt to pass a law that specifically for this in the United States (SAFE Banking Act) that is faltering.
Without a bank account, it's near impossible to accept credit card or any other alternative. You can pretty much only accept cash. And since you can't just deposit it into a bank account, retail has to pay growers (and employees and withhold taxes) in cash, and they have to find agricultural equipment suppliers who will accept cash. And in my experience, even they can get their bank accounts shutdown just for being in an adjacent industry and handling too much cash.
I’m not defending criminal activity. I’m being a realist and recognising it exists, and thus there is a logical reason for the existence of crypto. It’s all well and good to say the solution is to not break laws, but that is not how the world works. It’s like saying the solution to lung cancer is for people to stop smoking, it’s absurd.
It isn't just the problem of paying for illicit goods/services. I was paid (for perfectly legal work) in crypto earlier today. In many perfectly legitimate cases, there's substantially less friction involved when compared to established methods. I didn't have to muck around with archaic systems and bad UX or provide endless information, and I like that the whole affair is so conceptually simple as opposed to the black box that is the backend of my bank account.
"How else would I pay a cybercriminal without Crypto?"
Before cryptocurrency became widespread, they were limited to gift cards and MoneyPaks, which kept the ransoms to the several hundred dollar level, and therefore to the "oops, clicked on a dodgy site," individual PC level, rather than the finely targeted attacks on organizations able and often willing to pay multimillion dollar ransoms, and the criminal ecosystem that has developed around that.
There was Liberty Reserve, Webmoney, e-gold. Even now there's a bunch of sketchy EMIs in Belize and Lithuania like Advcash and Perfect Money. Ransomware before just wasn't highly targeted because "installs" were a lot cheaper and there was lots of other profitable easier scams to run like spamming pharma, FakeAV, etc. An increased amount of attacks like the Colonial Pipeline hack may have coincided with the rise of cryptocurrency but I think it would have happened even without it. There has always been groups that "cash out" fradulent wire transfers for 50-60%, go read wwh-club[.]vip or bhf[.]io if you want to know more (I read these occasionally out of curiosity but there are more "elite" forums out there). Not really any reason to think most of these attacks couldn't have worked with just paying ransom by wire transfers, especially when you consider that after the money has gone through a few countries it is practically unseizable given the amount of time international cooperation takes.
No I don’t and what does todays announcement have to do with FTX? Aside from showing that the US government is proactive at investigating irrelevant exchanges while failing to protect anybody from mismanaged and systemically important exchanges.
Always funny how crypto-bros espouse the joys of being free from government regulation while also whining that government regulation didn't protect them from crypto grifters.
I read that people keep using mismanaged companies that happen to broker crypto assets, and then I read you conflate that with "crypto".
The best analogy to me is seeing a hardhat incident at a construction company, and deciding that "buildings" are a flawed concept, along with everyone that uses them, and perhaps lumber as well. When you should just criticize the construction company.
> Moreover, Legkodymov – who himself administered Bitzlato from Miami in 2022 and 2023 – received reports reflecting substantial traffic to Bitzlato’s website from U.S.-based Internet Protocol addresses, including over 250 million such visits in July 2022.
I don’t believe the DoJ here either. That’s like every other American visiting that website that month. Or am I to believe a small subset visited hundreds of times per month? On a site that isn’t really about trading but more about actually moving money around?
Bitzlato, a no-KYC exchange that has never been mentioned on HN before this DoJ announcement. Bitzlato has also essentially never been discussed on reddit, only included in some lists of no-KYC exchanges.
Turns out it’s hard to attract enough volume when you’re operating by the book in an unregulated market where everyone else is playing against the customers on their money, often outright stealing it.
Only about 0.15% of crypto transactions last year were illicit, compared to 5% with fiat money. Cash is by far the pinnacle of "crime money", definitely not cryptos.
The study says 0.15% of transactions involved addresses that have been identified as illicit. That’s quite different to saying 0.15% of transactions are illicit and very different to saying 0.15% of the value of crypto transactions was illicit.
That’s a laughable estimate. And even if that were the case, speculation comprises the other 94.85%— also illegitimate—. A result of regulatory capture and complicit politicians.
This is sorta misleading. Coinbase absolutely dominates the US market as far as crypto goes, especially large retail accounts. Binance is mostly smaller trading worldwide (guys with $1000 speculating on shitcoins and such), not 5-7 figure US crypto accounts like with Coinbase.
From what i know Coinbase has consumers worldwide and they are able to verify gov issued documents from many countries, including as far as Japan, well not anymore, at least since today.. :p
Besides, I have heard many people doubt the volume numbers published by binance. Either claiming binance inflates the numbers, or binance allows wash trading which inflates the numbers.
I don't think Binance's books are public so you can't see.
If you mean that I can't a fake a trade with a third party, then yes, that's true - all fake volume has to be done between parties that are in on it. Otherwise the scheme falls apart when the third party tries to withdraw/realise gains/exercise/whatever.
There's a caveat here which is that quite a few spot markets on Binance are zero fee, so someone can theoretically trade with themselves back and forth to pump volume. I think quite a few third party volume trackers stopped tracking those markets
and binance also stopped counting those markets for fee tiers for this reason.
They did a direct listing instead of an IPO, meaning all the employees sold a bunch of shares to retail investors and the company made no money in the IPO. It could have shored up its coffers a lot with an IPO, but its unlikely that institutions were that interested in underwriting it at that valuation and taking the risk, accurate analysis of risk because then they'd be holding the bag, sort of:
This also means that there was no "stabilizing bid", a feature of IPOs where there is a window of time where this form of market manipulation is legal, the participating banks put up super large buy orders around the IPO price to suggest there is more demand than there is. Coinbase listing didn't have that.
Coinbase just needs to downsize what they're trying to do.
Probably India must be their short lived launch. They did a launch party and announcement but their fiat payment integration was pulled by the central bank and they never actually launched.
It was hilarious. Coinbase called it was due to “informal pressure from the regulator”. It’s quite likely, they never had a clear bank partner in India, merely a third party fintech company as a proxy.
It’s quite unlikely a large bank will take a stance on crypto, especially as public opinion has shifted now, with many calling RBI’s stance (anti-crypto) exceptionally good in hindsight.
The context is that the Japanese regulator, FSA (Financial Services Agency) which regulates Banks, Cyrpto, and Brokerages is scary. Notice how Coinbases statement is quick to reassure no Japanese assets have been comingled.
Not Americans assets, or anyone else. Coinbase is careful to only mention Japanese assets.
The FSA regulated FTX Japan is the only regional FTX moving forward with returning depositor's assets. FTX US's status is disputed, certainly not issuing a timeline.
The collapse of Mt. Gox pushed the FSA to heavily regulate crypto. Of course that means an entity like Coinbase must consider not just the cost of compliance, but also the risk that if they steal customer funds executives can go to jail. Costs are fine, investors bear that. But clearly Coinbases executives most dislike the whole "FSA will haul you into jail for questioning when you loss customer money" most. Hence this announcement.
At this point any exchange avoiding FSA regulation is a giant red flag with bonus red siren.
> At this point any exchange avoiding FSA regulation is a giant red flag with bonus red siren.
Yes.
No crypto exchange can make money without either charging fees or ripping off the customers. The less legitimate ones just steal the customers' money. The more legitimate ones try to steer the customers into buying financial products profitable to the seller.
Useful rule of thumb: any financial product where they call or advertise to you is no good. If it was good, smart money would be seeking it out and buying it.
Coinbase is well known for charging fees higher than competitors. Even with those fees they still lost around 500 million dollars in 2022 operating their exchange.
It is how balance sheets work that have a "Crypto assets held" entry, if you then buy and sell said balance sheet entries the results show up in the income statement as profits and or losses.
> but also the risk that if they steal customer funds executives can go to jail
What? This isn't a risk... just don't steal/commingle the funds. Plenty of banks have done that just fine!
This whole post is nonsense. Coinbase reassuring assets aren't commingled explicitly in an announcement like this is in-line with their usual writing tone for public announcements. Their whole brand is "the regulation friendly crypto exchange."
It seems to me that this is more just about the fact they've downsized a bunch with layoffs, and Coinbase Japan is just a casualty of that. Nothing more to it.
Would you like to review the number of times exchanges previously hyped on HN have tripped over the incredibly low bar that is "just don't steal customer funds"?
You missed the one which is the entire reason FSA has so much power now. Mt. Gox stole/comingled customer funds (though they lost even more to hackers).
Since when are banks not commingling funds? Do you think they have a separate vault with cash per customer? You account with them is just a number in a database they can change arbitrarily.
Coinbase is not a bank, it's an exchange, and exchanges are absolutely not supposed to "commingle" (read: trade with) your funds. Even FTX paid lip service to this idea by structuring Alameda as a theoretically separate company.
When you're talking about "commingling" each client’s assets/deposits, yeah that's something all banks and wealth managers have done since basically forever. They will hold these assets in aggregate, and maintain a logical balance for each client somewhere (big piece of paper or a DB) then regularly (nightly at least) ensure the quantities of these two match (if they don't match somoeone needs to root-cause and fix ASAP). That's totally normal and I don't think anyone here has a problem with that.
What the OP is talking about is mixing up these client assets together with the cash and assets the company uses for its operations - payroll, trading, expenses, whatever. This is a huge no-no and regulators will come on you like a ton of bricks if they even catch a whiff of you doing this. This is meant to protect against dumb shit like FTX lending out all their client deposits to Alameda. It is still possible to fuck up under regulations like this but that'd probably be at the hands of either a very savvy fraudster in a senior-ish position in the organisation (who will certainly get caught no matter how much they cover their tracks) or a criminally incompetent CFO who hasn't been ensuring their ops staff are following processes.
That’s a source that FTX Japan is returning assets, not that it’s the only regional one doing so. (LedgerX, an FTX holding, continued operations but I guess doesn’t count as a regional exchange?)
There is some logic to making the CEO a “legal synecdoche“ (catchy, I know!) for his/her company. No other person is better positioned to steer the company away from violating criminal laws, and CEOs tend to be paid handsomely for the trouble. Something like 400x what their average worker makes. Right now criminal penalties tend to just be the cost of doing business. Breaking the law isn’t scary, it’s a calculated risk.
We have to think about whether this profit maximizing algorithm we are running as a society is good for us. Companies are basically paperclip maximizers, and at the expense of everything else. The only way things get solved isn’t by fighting tooth and nail for whack-a-mole laws which get watered down and repealed, it’s by changing the incentives. I’m not smart enough to know exactly what those incentives should be, but I am smart enough to know that “profit at all costs” is a pretty crappy one.
The important thing about a "limited company" is precisely that the CEO and all of the other staff aren't legally equivalent to the company. That would be a partnership. This is a very useful technology in de-risking running a big business. There isn't a good reason for making the board liable for ordinary line of business failures.
> Right now criminal penalties tend to just be the cost of doing business. Breaking the law isn’t scary, it’s a calculated risk.
This, on the other hand, is a serious problem. It's why it's important for SBF and anybody who can be proved to have responsible knowledge of the fraud at FTX to go to jail for a long time.
But in general power and money make you above the law, and voters are unwilling to take enough of an active informed involvement to fix this.
> The important thing about a "limited company" is precisely that the CEO and all of the other staff aren't legally equivalent to the company. That would be a partnership. This is a very useful technology in de-risking running a big business. There isn't a good reason for making the board liable for ordinary line of business failures.
> > Right now criminal penalties tend to just be the cost of doing business. Breaking the law isn’t scary, it’s a calculated risk.
> This, on the other hand, is a serious problem. It's why it's important for SBF and anybody who can be proved to have responsible knowledge of the fraud at FTX to go to jail for a long time.
In case of corporations problem is how influential they are. How they are able to capture regulators, bribe politicians to deregulate and how their size will cause rest of economy to collapse if they get penalties they deserve.
Only time I have seen any real action taken, was when rich investors got scammed. Especially if done by someone outside of elites. Stealing from lower/middle class OK, maybe you get small fine. Taking something from billionaire? You will be astonished how hard book can hit, when thrown with enough political/financial motivation.
> But in general power and money make you above the law
It's capitalism, people with capital make the rules.
> and voters are unwilling to take enough of an active informed involvement to fix this.
The problem is that to be informed in such cases it takes lots of time, money and effort. A second neverending second job and it only takes one mistake to get screwed. In most cases even government agencies that are supposed to oversee it, can't do so because corporations do a lot to obfuscate, hide and misdirect(also agencies funding gets cut so they can't go after expensive targets). How you are expecting individual to do something a dedicated/paid/staffed agency can't do. Especially when media corporations/politicians/NGO(another can of worms) actively lie on corporations behalf.
Also are you expect regulators to retire with government pay? They see what is going inside of corporations and they want their share.
Thank you for sharing this. The idea of corporations as paperclip maximizers has been floating around in my head for quite some time now and I’m glad I’m not the only one who has thought of this.
There's no evasive language or weasel words or anything like that, it's a straight up commitment, backed by the fact that Coinbase is a public company and subject to that level of auditing, transparency, and scrutiny.
Just use a VPN. Coinbase doesn't have a right to know where you are anyway, you have a right to live a distributed, cloud-based existence on the planet.
IIRC one of the exchanges (might have been Bitstamp or Binance) let me withdraw some crypto assets with no KYC. I accidentally made two accounts and deposited on both, then when doing KYC they refused to approve the second account, as you can only have one per their terms of service. Support advised me to just withdraw crypto assets from the unverified account to the verified one.
These days Coinbase (at least Coinbase U.S.) requires a frigging passport/driver’s license. I still have a small amount of coins locked up there since I don’t intend to give them my ID. Not a big loss since ideologically I don’t intend to touch crypto again anyway.
Without 20x margin trading, you can only be profitable running a spot exchange if you are in the top 3. Everyone below the top 3 has been operating in the red. Even the exchange that Binance bought has been operating in the red for years.
You cannot run a fully compliant exchange with trading, AML/KYC, and custody under one roof and be profitable. The IT controls and operational costs are too much. Moreover, there are not enough regulators in Japan with IT system experience to actually vet companies wanting to enter the market (see https://www.ft.com/content/75a05077-6ac8-4365-a8c5-28fc8928b... ). The salary differential between a civil servant and an IT systems auditor is really big. Companies, even if compliant, have to wait a long time to get their application process inspected. It took Coinbase 3 years to enter the Japan, which is quite bad.
I think the future will be splitting up the concept of exchange. I think only stable coin issuers will survive. You issue stable coins then let customers trade on DEXs. Stable coin issuers only deal with AML and some KYC. Since issuers can remotely freeze ETH addresses, AML is relatively easy as long as regulators don't be come too anal (unlike EU MiCA and FATF travel rule).
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[ 3.1 ms ] story [ 191 ms ] threadI don't understand why crypto is as big as it is, it only serves as an enormous grift.
I only hope for more exchanges to fail, (Binance, Bitfinex, Kucoin, Huobi, Crypto.com, Kraken, etc)
The recent take down of an exchange by the DOJ got me excited that this is finally going to take down crypto prices completely and that everyone will start to forget about them and move on.
https://www.justice.gov/opa/pr/founder-and-majority-owner-cr...
https://appinventiv.com/blog/blockchain-consensus-algorithms...
“Oh, you think multi-level marketing shouldn’t exist? It’s a form of storytelling so apparently you want to destroy all stories, you mean old culture-hater and book-burner.”
[1]: https://www.youtube.com/watch?v=EfsSV7ni2ZM
[2]: https://techcrunch.com/2022/04/21/a16z-debuts-new-crypto-res...
[3]: https://cs251.stanford.edu
> arrested last night in Miami
Arrested while traveling in the US?
So flying from UK to Mexico with a stop in Miami will involve immigration and all the jazz in Miami (including the need for a visa if your passport normally requires it).
This is usually not the case in Europe. You stay in the non-schengen transfer zone and walk from one gate to another.
Companies generally do other things besides being a vehicle for speculation.
I don't see it as radically different. And Nikola still has a market cap of 1 billion. The idea of digital assets, of trustless contracts, its still very very interesting to me. That a bubble formed and popped is more of a 'well of course it would' result to me than something to be feared.
And maybe someday Nikola solves the truck thing and dominates shipping. I don't know.
I think they whining about coins being a vehicle for speculation is puritanical hand wringing. Especially when it comes from the left and is focused on how people, who were quite literally engaged in speculation, lost money.
Last week I was in a developing country. The amount of crypto-related advertising was striking. And none of it was about remittances. These ads were not saying “Here’s something better than Western Union.” No, they were showing trading screens on a mobile app with shitcoins going to the moon.
I believe Western crypto enthusiasts are badly in denial about the volume seen on third world exchanges. The people putting their nairas or liras or whatever into crypto are not doing so because they think it’s a great system to send money internationally and because they don’t believe in central banks. They’re only doing it because a local influencer on YouTube told them it’s how you get rich.
(Of course everybody in the West buys crypto for that same reason — maybe the source of the “insider tips” is more often Twitter, but the motivation is the same. The important point is that third world crypto adoption is a core narrative told by crypto pumpers, and it doesn’t exist any more than first world crypto adoption.)
They don't care, or ignore these things, because eventually everyone figures out that there's not much to do with or for crypto that isn't scamming someone out of money or providing a vague crypto adjacent service. Nobody wants to buy regular products with crypto because for normal people, it is a pain in the ass to participate in crypto without getting scammed, and for crypto diehards, they know any dollar spent in the crypto ecosystem is inefficient because they are often purposely deflationary assets. They know that they spent a shitload of their savings on shitcoins, and that if the crypto world continues to struggle, that's an existential threat to them. They know that people NEED to buy in so that the price can go back up so they can cash out and save themselves. It's no different from desperate people in an MLM getting pushy with their facebook friends because they have $2000 in credit card debt buying Dotera product to stay "in their tier" or whatever nonsense the particular MLM uses, and the only way to get money back out of it is to become a conman.
The current price of Bitcoin is pumped up by Tether and it is only a matter of time till the entire thing crashes down.
For comparison, UPI achieved its aim of fast payments in India MUCH quicker than Bitcoin ever did in it's nearly 15 years of its existence and now UPI is expanding.
How else would I pay a cybercriminal without Crypto? I ask this in good faith, I genuinely don't know of any other methods. Unfortunately the current method uses lots of resources, which I'm guessing is why you hate it so much. I'm all for better alternatives, but what are they?
https://www.coinglass.com/Balance
Googling, it seems that the best estimates seem to indicate between 2 and 4 million Bitcoin are permanently lost (lost keys, known hardware failures of failed wallets, unclear if this counts Satoshi's million bitcoins or not). This estimate [0] by an analysis firm who appears to be broadly pro-crypto suggests 3 million lost, and that ~14.5 million BTC are "illiquid". Illiquid obviously doesn't mean lost
Illiquid doesn't mean lost, but it suggests something to me about the current conversation. If only ~4.5 million BTC are even a little bit liquid, then it's fair to say that at least half the engagement with BTC in balance terms is on exchanges, and probably more considering velocity of money. Not the grandparent's claim of 99%, but also not your claim of 10%. At the very least, not an obviously settled question.
[0] https://insights.glassnode.com/bitcoin-liquid-supply/
UPI (India)
Pix (Brazil)
PromptPay (Thailand)
PayNow (Singapore)
Which works infinitely better than crypto.
Funny how developing countries have come up with better solutions to what crypto was trying to solve for them in payments, but crypto failed in doing just that.
What has crypto done better than the systems I have mentioned?
Then you should tell us what is the real value proposition of crypto then, because I cannot see it.
The Bitcoin whitepaper is moot since the whole point of Bitcoin is to be a P2P payments system and yet it has failed in that aim alone.
Therefore, since Bitcoin in its current form has failed, the value of crypto is nothing.
Gift cards?
You don’t. That is the point of laws.
In good faith, the commenter specifically mentions the DoJ. People want laws against cybercriminality because it hurts them. Your argument is similar to answering “I hope AR-15 rifles get abolished” with “well, how else can I do a mass shooting?”
Laws are not about morality as much as effect; but people still want them applied.
Without a bank account, it's near impossible to accept credit card or any other alternative. You can pretty much only accept cash. And since you can't just deposit it into a bank account, retail has to pay growers (and employees and withhold taxes) in cash, and they have to find agricultural equipment suppliers who will accept cash. And in my experience, even they can get their bank accounts shutdown just for being in an adjacent industry and handling too much cash.
Before cryptocurrency became widespread, they were limited to gift cards and MoneyPaks, which kept the ransoms to the several hundred dollar level, and therefore to the "oops, clicked on a dodgy site," individual PC level, rather than the finely targeted attacks on organizations able and often willing to pay multimillion dollar ransoms, and the criminal ecosystem that has developed around that.
Oh no not Bitzlato! /s
I can't believe you fell for that, DOJ is the only grifter here. They actually did the FUD pre-announcement and for an exchange nobody ever heard of.
Don't you think that this holds as a warning for other much bigger exchanges?
---
To answer your comments:
> No I don’t and what does todays announcement have to do with FTX?
Both were operating offshore and the DOJ took action on both of them.
https://www.justice.gov/opa/pr/ftx-founder-indicted-fraud-mo...
> while failing to protect anybody from mismanaged and systemically important exchanges.
Doesn't matter if it is big or small, an exchange is an exchange, especially one that isn't regulated or in the US.
Again, I see this as a warning, don't let the wrath of the DOJ on a small exchange fool you into thinking nothing will happen to other exchanges.
I read that people keep using mismanaged companies that happen to broker crypto assets, and then I read you conflate that with "crypto".
The best analogy to me is seeing a hardhat incident at a construction company, and deciding that "buildings" are a flawed concept, along with everyone that uses them, and perhaps lumber as well. When you should just criticize the construction company.
I don’t believe the DoJ here either. That’s like every other American visiting that website that month. Or am I to believe a small subset visited hundreds of times per month? On a site that isn’t really about trading but more about actually moving money around?
Bitzlato, a no-KYC exchange that has never been mentioned on HN before this DoJ announcement. Bitzlato has also essentially never been discussed on reddit, only included in some lists of no-KYC exchanges.
Big whoop.
IPO: $250 and peaked at $429
Today: $50 [1]
That's a pretty hard reality check.. building a business and raising a lot of money selling ponzi schemes, that was a hell of an idea to begin with
To finish with 10x less volume than Binance [2]
[1] - https://finance.yahoo.com/quote/COIN/
[2] - https://coinmarketcap.com/rankings/exchanges/
https://blog.chainalysis.com/reports/2022-crypto-crime-repor...
Sorry, what?
This is sorta misleading. Coinbase absolutely dominates the US market as far as crypto goes, especially large retail accounts. Binance is mostly smaller trading worldwide (guys with $1000 speculating on shitcoins and such), not 5-7 figure US crypto accounts like with Coinbase.
From what i know Coinbase has consumers worldwide and they are able to verify gov issued documents from many countries, including as far as Japan, well not anymore, at least since today.. :p
If you mean that I can't a fake a trade with a third party, then yes, that's true - all fake volume has to be done between parties that are in on it. Otherwise the scheme falls apart when the third party tries to withdraw/realise gains/exercise/whatever.
There's a caveat here which is that quite a few spot markets on Binance are zero fee, so someone can theoretically trade with themselves back and forth to pump volume. I think quite a few third party volume trackers stopped tracking those markets and binance also stopped counting those markets for fee tiers for this reason.
This also means that there was no "stabilizing bid", a feature of IPOs where there is a window of time where this form of market manipulation is legal, the participating banks put up super large buy orders around the IPO price to suggest there is more demand than there is. Coinbase listing didn't have that.
Coinbase just needs to downsize what they're trying to do.
https://www.coinbase.com/blog/coinbase-launches-in-japan
It’s quite unlikely a large bank will take a stance on crypto, especially as public opinion has shifted now, with many calling RBI’s stance (anti-crypto) exceptionally good in hindsight.
https://www.cnbctv18.com/cryptocurrency/coinbase-ceo-says-ex...
Not Americans assets, or anyone else. Coinbase is careful to only mention Japanese assets.
The FSA regulated FTX Japan is the only regional FTX moving forward with returning depositor's assets. FTX US's status is disputed, certainly not issuing a timeline.
The collapse of Mt. Gox pushed the FSA to heavily regulate crypto. Of course that means an entity like Coinbase must consider not just the cost of compliance, but also the risk that if they steal customer funds executives can go to jail. Costs are fine, investors bear that. But clearly Coinbases executives most dislike the whole "FSA will haul you into jail for questioning when you loss customer money" most. Hence this announcement.
At this point any exchange avoiding FSA regulation is a giant red flag with bonus red siren.
You're damn right they are, they demanded we fax them, and send our fiscals over on a floppy!
It might just as well be that regulation (or other factors) are making operations unprofitable as far as I can tell.
You don't see them announcing a withdrawal from the American market. Only the FSA regulated market.
Yes.
No crypto exchange can make money without either charging fees or ripping off the customers. The less legitimate ones just steal the customers' money. The more legitimate ones try to steer the customers into buying financial products profitable to the seller.
Useful rule of thumb: any financial product where they call or advertise to you is no good. If it was good, smart money would be seeking it out and buying it.
What? This isn't a risk... just don't steal/commingle the funds. Plenty of banks have done that just fine!
This whole post is nonsense. Coinbase reassuring assets aren't commingled explicitly in an announcement like this is in-line with their usual writing tone for public announcements. Their whole brand is "the regulation friendly crypto exchange."
It seems to me that this is more just about the fact they've downsized a bunch with layoffs, and Coinbase Japan is just a casualty of that. Nothing more to it.
Please show me HN hyping either, through...
When you're talking about "commingling" each client’s assets/deposits, yeah that's something all banks and wealth managers have done since basically forever. They will hold these assets in aggregate, and maintain a logical balance for each client somewhere (big piece of paper or a DB) then regularly (nightly at least) ensure the quantities of these two match (if they don't match somoeone needs to root-cause and fix ASAP). That's totally normal and I don't think anyone here has a problem with that.
What the OP is talking about is mixing up these client assets together with the cash and assets the company uses for its operations - payroll, trading, expenses, whatever. This is a huge no-no and regulators will come on you like a ton of bricks if they even catch a whiff of you doing this. This is meant to protect against dumb shit like FTX lending out all their client deposits to Alameda. It is still possible to fuck up under regulations like this but that'd probably be at the hands of either a very savvy fraudster in a senior-ish position in the organisation (who will certainly get caught no matter how much they cover their tracks) or a criminally incompetent CFO who hasn't been ensuring their ops staff are following processes.
Genuinely curious, do you have a source for this? Thanks
Which links to (hopefully this ascii-ized link works):
https://help-jp.ftx.com/hc/ja/articles/12458835958681-%E5%BD...
We have to think about whether this profit maximizing algorithm we are running as a society is good for us. Companies are basically paperclip maximizers, and at the expense of everything else. The only way things get solved isn’t by fighting tooth and nail for whack-a-mole laws which get watered down and repealed, it’s by changing the incentives. I’m not smart enough to know exactly what those incentives should be, but I am smart enough to know that “profit at all costs” is a pretty crappy one.
> Right now criminal penalties tend to just be the cost of doing business. Breaking the law isn’t scary, it’s a calculated risk.
This, on the other hand, is a serious problem. It's why it's important for SBF and anybody who can be proved to have responsible knowledge of the fraud at FTX to go to jail for a long time.
But in general power and money make you above the law, and voters are unwilling to take enough of an active informed involvement to fix this.
> > Right now criminal penalties tend to just be the cost of doing business. Breaking the law isn’t scary, it’s a calculated risk.
> This, on the other hand, is a serious problem. It's why it's important for SBF and anybody who can be proved to have responsible knowledge of the fraud at FTX to go to jail for a long time.
In case of corporations problem is how influential they are. How they are able to capture regulators, bribe politicians to deregulate and how their size will cause rest of economy to collapse if they get penalties they deserve.
Only time I have seen any real action taken, was when rich investors got scammed. Especially if done by someone outside of elites. Stealing from lower/middle class OK, maybe you get small fine. Taking something from billionaire? You will be astonished how hard book can hit, when thrown with enough political/financial motivation.
> But in general power and money make you above the law
It's capitalism, people with capital make the rules.
> and voters are unwilling to take enough of an active informed involvement to fix this.
The problem is that to be informed in such cases it takes lots of time, money and effort. A second neverending second job and it only takes one mistake to get screwed. In most cases even government agencies that are supposed to oversee it, can't do so because corporations do a lot to obfuscate, hide and misdirect(also agencies funding gets cut so they can't go after expensive targets). How you are expecting individual to do something a dedicated/paid/staffed agency can't do. Especially when media corporations/politicians/NGO(another can of worms) actively lie on corporations behalf.
Also are you expect regulators to retire with government pay? They see what is going inside of corporations and they want their share.
http://www.antipope.org/charlie/blog-static/2018/01/dude-you...
Fwiw, Brian Armstrong clearly asserts in this recent interview that Coinbase assets in general are not commingled:
https://www.youtube.com/watch?v=dueFaHFulVA&t=3m35s
There's no evasive language or weasel words or anything like that, it's a straight up commitment, backed by the fact that Coinbase is a public company and subject to that level of auditing, transparency, and scrutiny.
Is there some region you can VPN to where coinbase won't require some form of legal identification before allowing you to withdraw any funds?
Good luck using a VPN for photo ID.
You cannot run a fully compliant exchange with trading, AML/KYC, and custody under one roof and be profitable. The IT controls and operational costs are too much. Moreover, there are not enough regulators in Japan with IT system experience to actually vet companies wanting to enter the market (see https://www.ft.com/content/75a05077-6ac8-4365-a8c5-28fc8928b... ). The salary differential between a civil servant and an IT systems auditor is really big. Companies, even if compliant, have to wait a long time to get their application process inspected. It took Coinbase 3 years to enter the Japan, which is quite bad.
I think the future will be splitting up the concept of exchange. I think only stable coin issuers will survive. You issue stable coins then let customers trade on DEXs. Stable coin issuers only deal with AML and some KYC. Since issuers can remotely freeze ETH addresses, AML is relatively easy as long as regulators don't be come too anal (unlike EU MiCA and FATF travel rule).