A Crypto Alchemist Made Me an Accidental Billionaire | Hacker News Reader

A Crypto Alchemist Made Me an Accidental Billionaire

wired.com

8 pointspseudolus4 comments

This is a basic story of how some guy pumped a shitcoin in third party markets to make his 1e100 coins appear to be worth a lot, but lacked any exit liquidity to actually make any money.

I wonder if the tax office would allow people to value a security based on the order-book. Or does this reporter now owe a billion dollars tax! Clearly it's only "worth" $10 or something, once he drains all external markets with his first trade.

There is a snippet in Basil Bunting's poetry running something like

  I too was a millionaire, in Germany during the inflation.
  When the train steamed into Holland, I had not money enough to buy a bun.

Broeksmit traded on a decentralized exchange (DEX) without Know Your Customer procedures, so all the tax office would presumably be able to track was a send transaction from some fiat onramp/CEX to a public address. That's his initial "funding" and from there, they're blind.

Trading on a DEX and taking the shitcoin valuations there seriously is like giving yourself a billion dollars by typing it into Excel. You can write whatever number you want, the IRS has no interest in your excel sheet because there aren't real dollars there.

Getting an enormous tax bill from the IRS was part of Broeksmit's ideal situation, I imagine. That would mean getting a supported cryptocurrency like BTC back into his CEX through a DEX with a liquid DEXSHITCOIN/BTC pair after making hella savvy trades between DEXSHITCOIN/DEXPOOPCOIN pairs.

Sounds like it started as a half joke and "middle finger to crypto" but he dumped too much cash into the joke, and from there it consumed him. Super sad, and I see the same thing happening with NFTs now. Crypto and NFT trading and investing can be done responsibly, successfully and in full view of the tax man but ironically, only with the most centralized platforms... and probably, only for now.

RIP Broeksmit

Crypto? oh c'mon: fiat money is still the bottom line here. 90% of all interest in crypto would disappear today if they thought for a moment there was no way to turn it into cash.

Reply on news.ycombinator.com