JamesianP

Well I mean there are asset-backed cryptocurrencies too, also ones backed by fiat currency.

According to their website they take fiat currency. So yeah.

Also there's the VC funding, which presumably was mainly USD. Though not many people probably care about their losses.

I think this is the most important point. When everyone seems to be making money it's hard for agencies to make much headway in investigating them. Who will blow the whistle besides some cantankerous contrarians with no inside info? And presumably the company leadership were savvy enough to make up plausible storied for how everything was legit (hopefully it wasn't the "worthless box" explanation that the SEC way buying).

Are we now sure that's really what happened?

I'd be too worried about getting charged with wire fraud or something personally.

Fundamentals mean house prices should be higher than before, but that doesn't prove they should be this high. The population didn't double in five years. Such high-flying markets attract lots of speculation, especially in the last few years. The higher prices go, the more it attracts people to jump in and the thing accelerates, though the price relative to the fundamentals is actually getting worse and worse. How can it not overshoot? Look at what happens with worthless cryptocurrencies...

A rating inherently claims understanding though. Is a bridge safe to walk on? Some guy who doesn't understand engineering is putting signs on it rating its safety. Ignorance is not a defense at this point.

They did sue the banks. For many things including inflated appraisals of the loans.

I'm sure they have some kind of warning for everything that isn't FDIC insured. But misrepresenting high risk as low risk instead of zero risk is just a quantitative difference. There are plenty of scams that do this. for example just lying about a company's earnings. I suppose the precise crimes they charge them for may differ a bit.

ARPANET was started in the 60's. I'd call the WWW more of a killer app than a disruptive technology.

Crypto does have to compete with alternatives that are protected and funded by the govt itself. And the main problem is the slow transaction processing as I understand it. Still not technologically competitive for big systems.

I've actually known a few people involved (as employees) in these kind of frauds, and whistleblowers or some kind of stupid mistake can expose them certainly.

But the business cycle is what really clears even the most clever ones out.

CDO2s backed by worthless subprime loans were put into AAA rated bonds. I'd call that an outright scam. For that matter all versions were far more risk than they claimed they were, given that they were worthless, even if there was some fine print somewhere.

I scrolled it off the bottom and used the mouse wheel.

Still annoying though since I like to keep my place with the mouse pointer.

I'm guessing the IRS won't buy this logic. Also reminds me of some infamous accounting scandals.

Given that the float is so small, I think the asking price for rent is getting increasingly out of touch with what people are really paying, especially with rent control.

To make it less volatile they might as well just pick a number every year, the annual tax for a median house, then scale it in a relative sense based on relative house prices between taxpayers. They would more or less do that in a roundabout way anyway by tweaking the percentages every year.

And either way it's only not taxing you for money you didn't get. They never share your pain in the same sense that they share your success.

Does it? I wouldn't be surprised if it's horrifically inefficient with all that money to play with.

> From your tone it seems like you think I'm trying to defend crypto in this thread.

Yes I got ranted at for suggesting "fools racing towards a cliff" as a better description. These threads appear to have attracted a lot of people looking for a fight and will jump on any nuanced post as a "pro" side.

yeah the guy in my home country who broke into my car can say the same thing. Different problem.

Seems like they were offering leverage, which plenty financial businesses besides banks do (such as brokers) and has the same effect.

There isn't zero regulation. An online businesses is subject to the laws of its customers' countries. And the laws may not be up to date enough for some new scams, but they aren't completely naive. For example ponzi schemes are illegal. If they were doing that the govt will go after them (sooner or later...). A quick google search will net you plenty of stories about prosecutions.

They might've been in the process of transferring crypto silently for months and only now had to rush overtly enough to be spotted.

I assume they mean embezzlement. Which come to think of it may or may not involve hacking.

Do you consider social security, or for that matter all government tax and welfare systems which depend on growth via immigration to be ponzi schemes too?

Why do you believe it is bad news to me? It's just semantics.

well you have to draw a line somewhere. Call it something else if you want to criticize it. Like a bunch of fools racing towards a cliff.

But if they're honest about something being a scam how can it be a scam? Seems like a paradox.

I think the new laws and regulations are coming out as we speak. Since it's such a new area they have been slow. The SEC just hired a bunch of new people. They have been busy prosecuting people too.

I also think FTX has been violating plenty of them already from the sounds of it. They probably thought they were being clever, but wouldn't pass the "duck test".

so you're saying that still might be true?

But there's no multiplier as you describe it. It appears though. First deposit $1M. Then create that loan for 800k, and deposit it right back in the same bank. Now the bank has $1M versus 800k loans so the reserve is back above the 20 percent reserve requirement. We don't even need to work out the math, just keep repeating the process with smaller loans until we reach our limit at the reserve, which clearly must be (the very same) $1M in deposits, and the max of $4M loans, making for $5M total. Accounting rules to prevent this being done by a single bank alone just means it takes more banks trading loans to get the same effect. Rather than a wonky description of the rules, basic econ class still has the variations covered.

Or they just trap you into "lying" to the feds and lock you up for obstruction. It's quicker.

If you're referring to M-pesa, it's an app like Venmo. The US has apps too (for example Venmo).

I think it was specifically about her CEO job. There might be other people who worked there who did technical stuff.

The comfort with risk part seems worse in hindsight. Obviously somewhat less comfort with risk would have been better.

Gold mining purportedly does cause inflation in gold-backed currency. I guess bitcoin mining is the same, not familiar with that other than the annoying effect on hardware prices. Perhaps the argument is that this gets increasingly harder, as opposed to fiat money creation, which appears to be exponential growth. Plus manipulation of the currency has never been all that consistent, they are constantly trying new things and pushing boundaries. so any claims of future stability comes down solely to predicting how far some president or fed chairman might choose to go next along with how other countries react to that.

Yes of course we can do transfers online. I've been doing business this way for decades. Even in the very very early days of the internet they started "online bill payment" services, which would transfer electronically or else outright send a check as needed. It's how I paid rent in college. Also credit cards have been in widespread use for longer than that, so the need for an alternative was always only in narrow niches.

The new services (and the tech companies) only selling point is they can be instant and cheaper or free (though not all older approaches have fees). And serve groups like younger people with no credit.

And what is your post emblematic of with it's abuse of caps and stereotyping? I'm just talking about why they haven't replaced an older solution that "isn't broke" since it gets 99.9 percent of the job done already. No need to lose your mind.