Bitcoin and Digital Currencies

It actually is.

One of the reasons SBF got a reputation as an eccentric genius — a rep he leveraged to get suckers to put their money in FTX — was that he played League of Legends during a meeting with prospective investors. For some reason, rather than see this as a red flag, the investors saw this as SBF being just that confident.

Given the amount of his fraud and how incredibly weak his defense was, I don't see him getting off lightly. Good riddance.

Edited to add: The three principal founders of Safemoon have been indicted (and two arrested) on multiple counts of fraud. The consequences keep mounting.

Edited by Fighteer on Nov 2nd 2023 at 10:03:50 AM

Treasury.gov: U.S. Treasury Announces Largest Settlements in History with World’s Largest Virtual Currency Exchange Binance for Violations of U.S. Anti-Money Laundering and Sanctions Laws

Binance has settled with the US Treasury for $4.3 billion for violations of anti-money laundering and sanctions laws. Basically, it intentionally failed to implement mandatory government programs to prevent and/or report on transactions with terrorists, financial criminals, sanctioned governments, etc.

Binance is the largest remaining cryptocurrency exchange after its competitors fell one by one. The crypto market is now rocked by concerns about whether it will have to dip into customer funds to pay these fines, with many contemplating withdrawing their accounts.

Edited by Fighteer on Nov 21st 2023 at 4:13:36 AM

With a settlement that large what happens to the money? Does the Treasury Department get a cut to cover internal expenses of the work to catch them? Does it go into general budgeting across all departments? Is it set against the national debt? Are Treasury staff getting a super-sized Christmas bonus this year?

They get an extra $5 for this year's White Elephant budget.

Government fines are usually put in the Treasury's general fund. In cases where there's a specific group harmed like defrauded investors or the environment in case of environmental violations the money may be set aside specifically for restitution of those groups.

Wonder if that's actually going to hurt them any, or if they're too big to care?

It's probably impossible to know ahead of time, because these crypto companies have such messy finances.

I wouldn't be surprised if this apparently does nothing for a while before it spontaneously implodes two years later and it's revealed they were a zombie even before this. I also wouldn't be surprised if it implodes before they actually pay the fines.

Binance has been hit by the usual accusations of commingling funds, meaning that it uses customer accounts — that are supposed to be protected — to make trades. Just like FTX and other busted exchanges, Binance has its own hedge fund, and what killed FTX was using deposits to cover its trading losses.

This isn't confirmed, of course, and we probably won't know until/unless it collapses.

The loudest accusation against Binance and the one that it is paying this unprecedented fine for is refusal to obey anti-money laundering and sanctions laws, as I said. That is not in and of itself something that would lead to its insolvency, but it's absolutely illegal. By operating "offshore", Binance attempted to maintain the fiction that it wasn't subject to US regulations, while still soliciting deposits from US customers.

Cryptocurrency is, of course, extremely popular among criminals, terrorists, and rogue nations as a way to finance their operations and launder money. Binance knowingly and happily looked the other way while it was used by these entities, making no effort at all to comply with "know your customer" and other laws/regulations.

I forgot to mention that Changpeng Zhao ("CZ"), CEO of Binance, has individually pled guilty to these charges and agreed to step down from his position.

Edited to add: What all of these exchanges are vulnerable to is "runs" - that is, sudden drops in customer confidence that lead them to withdraw their deposits en masse. All that is needed is the perception of crisis to cause an actual crisis, and these deposits are not insured by the FDIC. Binance's remaining executives may need to work hard to convince customers that they have enough liquidity.

Edited by Fighteer on Nov 22nd 2023 at 8:29:10 AM

I'm willing to bet real (non-crypto) money that Binance is also engaging in that kind of corrupt Ponzi scheme bullshit.

I doubt very much a business willing to violate sanctions and launder money is acting totally above board with their customers' money.

Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador has not gotten wide acceptance outside of the "banked, educated, young, and male population", due to e.g privacy concerns.

Due to the extremely volatile nature of their value, they certainly aren't good currencies.

The fact that a lot of their value is based on the belief that they will deflate forever over the long term makes it even worse from a macroeconomic perspective.

My stepbrother is into bitcoin. He's currently abandoned the idea of Bitcoin being used as a currency, and instead as a "storage for value, like gold!".

Yeah, I don't buy it either.

That is, in fact, what bitcoin was originally conceived as: a store of value. It's unsuitable as currency by design. Rather, it's like a hoard of gold that is expected to increase in value over time. The "digital gold" analogy is probably the most efficient one to use here.

Other cryptocurrencies, like Ethereum, are much more suitable as actual currency because of how they are designed.

When cybercriminals ask for ransomware payments in bitcoin, for example, they aren't looking to use that bitcoin to buy weapons or whatever; they convert it into cash. The bitcoin is just a way of making the transactions difficult to trace.

They occasionally do use that Bitcoin to buy things, but that just makes it so the weapon/drug seller is the one converting it into cash.

Remember: when you buy bitcoin, there’s a reasonable chance you’re directly helping a criminal or rogue nation launder stolen money.

New to this thread and new to the OTC boards... Do I need an intro post, and are there any rules specific to this thread that I need to keep in mind (other than the fact that it's not investment advice, blah blah blah)?

No, and no. Feel free to jump in.

Thanks. I've been in crypto for awhile, although my hodlings are all in BTC and ETH.

That said, I'm coming in to ask for some suggestions on hardware wallets. I'm using Ledger, but recent issues seems to have affected my confidence in it.

So, for those those are using hardware wallet: what are you using right now, and why?

Well, this is going to be awkward because OTC seems to have anti-crypto consensus. Mind you, this is not "get out", but more like "your interests and views are not in-line with local culture".

Yeah, very few people here have any serious crypto holdings, so it's unlikely you are going to find much help when it comes to in depth the nuts and bolts of actually having crypto even if it's technically within the bounds of the topic.

Typically this topic focuses more about crypto as a cultural and societal phenomenon.

Like, the thread got really active for a bit when that Dan Olson video came out (The Line Goes Up).

As noted, if you want advice on crypto investment and management, you probably won't find it here, since the overall TV Tropes culture is strongly anti-crypto.

I'm in the position of being anti-crypto but also seeing it as essentially a second stock market that might be able to, if used correctly, help create more of a future for myself.

I bought and sold crypto multiple times in the past, making thousands each time. I was under no illusions that it was anything other than a stock market, and definitely not "the future of money" or anything like that. I was holding in Mt. Gox during Mt. Gox's big crash, and recently got a $1.1K payout from a lawsuit (they pay people based on how much money they had in Mt. Gox at the time), and am awaiting a second payout (there's supposed to be an interim and a final payout, with the final having more money, but I don't know when or how much. According to the website, they owe me wayyyyyyy more).

I do think cryptocurrency is totally stupid and a big scam. But I also want to give myself a future, and have no problems with using either stocks or crypto to do so. I mean, I'm an autistic man working a government job (which admittedly has kick ass benefits like the oodles of paid vacation days I get, and the health insurance) and living with my mom. I want more, ya know?

More importantly, we're not financial advisors either way and it's probably not a good idea to ask these kind of questions to non-professionals.