The web3/crypto community seems to select for individuals with an almost proud ignorance of the law and state power. The same personality that can make a 21st-century gold bug pitch (e.g. a world on crypto is one without wars, Bitcoin is impossible to ban, or Luna is magically stable et cetera) is one that reacts to an arrest warrant by no showing and tweeting.
[0] https://msccsp.org/nasc/downloads/HyungkwanPark_supplemental...
[1] https://www.nytimes.com/2020/07/06/world/asia/south-korea-ch...
Madoff's core operation was based on scamming rich Jews in New York City, Palm Beach, Florida, and Hollywood. In each location, he had a prominent Jewish leader steering investors to his fund. Ezra Merkin handled New York, Stanley Chais handled Hollywood, and Madoff himself worked the Palm Beach Country Club. This was very much an in-person scam. A long list of celebrities lost big.
That's why the recovery operation was so long, so extensive and so successful. The major victims were well connected, could afford expensive lawyers, and collectively, they had a lot of clout.
The crypto world tends to have less well connected suckers.
- https://www.youtube.com/watch?v=ZvzwpbFSi44
- https://www.youtube.com/results?search_query=coffeezilla+do+...
That being said it seems like there is more to his story than buggy code.
- "none of us were notified of this at all; when i found out about this, the south korean prosecution told me they usually don't notify people of this because they might destroy evidence and/or leave the country beforehand"
- "tbh people being treated as potential criminals like this is absolutely outrageous and unacceptable"
https://web.archive.org/web/20220622034155/https://twitter.c...
(To be clear, this is a different Terra person; not Do Kwon).
Hmm, wonder if Do Kwon is reading this :)
He has a young family (with a child less than a year old) as far as I know, where are they?
[1] https://www.businesstimes.com.sg/government-economy/police-s...
There is zero chance they’re falling for crypto. This is a problem for the gambling masses. To the degree it harms any elite, it’s by introducing political instability in Korea and reducing Singapore’s standing as a stable financial centre.
b) This appears to be across the socio economic spectrum. If you think there aren't a ton of rich people throwing money into crypto I guess I'll just say I think you are wrong.
The recovery project is only for direct investors with Madoff. Those who bought into "feeder funds" which fed into Madoff's fund don't get anything directly. There's other litigation involving feeder funds, which can recover something from the Madoff recovery and pay it out to their holders.
The recovery initiative got back billions of dollars through clawback lawsuits, where they went after people who'd cashed out of Madoff's scheme before the crash. Those people were effectively participants in the scam, and they profited from it, so they don't get away free.
If you can track the money, you can un-do a Ponzi. The amount of legal effort is huge, though.
Take Martin Shkreli, for instance. I don't doubt that he was probably guilty of what he was charged with (unrelated to his price hikes of drugs), but I doubt he would have been charged if not for his infamy otherwise. I suspect what he was charged with would also encompass many other business people in the US who are less infamous.
Fraud requires intent in most jurisdictions. This looks more like gross negligence (and possibly embezzlement). In addition to, likely, a host of money transmission law infractions.
It's also a fact of the world that the rich are generally better able to pursue legal action to recover money that they've lost than the poor. The fact that these rich people were Jewish doesn't make much of a difference here (not to mention that the Madoff scheme was extremely infamous after it imploded, so it was more likely to receive resources to rectifying the wrongs that Madoff dealt as compared to an equally-damaging but less well-known scheme).
Madoff is important in relation to crypto scams for a number of reasons. He showed how to run a successful Ponzi - pay good, but not unreasonable returns, and be very reliable about servicing withdrawal requests. That kept the scam going for 17 years. Few Ponzis last that long. Most of the crypto Ponzis can't manage either of those goals, but the "staking" crowd is trying. "Staking" is really just a High Yield Investment Program.[2] (There's real staking with proof of stake Etherium, where you're guaranteed by smart contracts to get back the ETH you put in, although it might be worth less when you get it out. But most of what's called "staking" is just a loan.)
The overall market collapse in 2008 finally caused a collapse of Madoff's scheme. This, too, is typical of crypto schemes. They can't survive a downturn. As long as "line goes up", it's not clear what's a Ponzi. People who point out that the numbers don't work are derided for spreading "FUD". When line goes down, the whole thing collapses. Which is what happened to Terra. The relationship between TerraUSD and LUNA (now LUNC) didn't help, either. The stablecoin maintenance system minted unlimited amounts of LUNC trying to prop up TerraUSD. The end result was LUNC dropping from $117 to $0.0003051, with a total supply of 6,904,017,889,662 LUNC. The $1 stablecoin dropped to $0.03497. (Forum comment: "Don't worry,don't be afraid. The whole market has collapsed. Buy & Hold. Luna Classic pump will start soon." This is typical of mass-market Ponzi schemes - even after being fleeced, many sheep retain hope. There's less of that at the high end, where investors usually kick themselves for being suckered, then lawyer up.)
Key takeaway: little of what happens in crypto is new. Most of the schemes go back to at least the 18th century. Most crypto enthusiasts don't know enough financial history to get this.
[1] https://jewishjournal.com/news/united-states/67582/
[2] https://en.wikipedia.org/wiki/Madoff_investment_scandal
[3] https://en.wikipedia.org/wiki/High-yield_investment_program
https://www.theatlantic.com/business/archive/2016/02/madoff-...
Gold and gold buggery are separate. Gold and silver have deep precedence as money. They're also useful commodities. Gold buggery involves retail investors disproportionately allocating to gold as a buy-and-hold asset, often with emotional attachment. Those buying crypto because it's going to free the world or whatever resemble the latter.
This could be an interesting thread in itself.
https://www.kitco.com/news/2022-05-26/Gold-is-an-antique-ins...
https://www.cbc.ca/news/business/gold-canada-reserves-1.3443...
You don’t need to stick it in a bank when you’re digging it up in a those volumes every year.
The truth is probably based on the money they received from selling the gold as a retail coin
Gold scams have been around for a significant number of decades. Bitcoin has been hyped to death for its entire existence, in spite of the "properties" it shares with gold.
Note: I own neither.
They may use some terminology that sounds similar to counter culture at face value (eg "stick it to the big banks!") but they aren't doing this in the counter culture mode of rejection, they are simply using it as a sales pitch towards moving more crypto.
And the problem with that is what? State power and law failed us.
Generally: if you’re trying to fix something, understanding how it works is usually a good start.
Specifically: pompous ignorance leads to gross negligence and criminality so stupidly brazen a B-list editor would send it back for being unbelievable. The sort that is rampant in crypto/web3.
Yes the fix is clear to me. Remove KYC+AML from the banking/monetary system. The expansion of crypto is in part a response to a pompous ignorance of government officials, attempting to impose a search of your papers merely for banking and the government implementing policies so stupid even a B-list editor wouldn't believe it.
The government failed so other actors came in, then everyone made a sad face that when the government failed alternatives were found.
"Expect for roads"
"And sewers"
"And protection from invaders"
"And enforced contracts"
And so on...
Gold is tremendously useful for many applications and I believe all that you mentioned are brittle in comparison. I believe it's also rarer than a few on that list.
Mainly, I've heard a few people in my life contend that we only arbitrarily decided that gold has a use, or that it's mostly hype. I don't think that's the full case. It's workable, useful, biocompatible, profitability extractable, and obviously stunningly pretty. Not so much just culturally significant just on a whim or something, it's useful.
Are central banks retail investors? Are they buying gold to "to free the world or whatever"? No [1]?
Gold and silver have deep precedence as money. This leads to them trading as haven assets, i.e. their price rises when financial conditions deteriorate. Bitcoin doesn't. It trades as a risk asset, i.e. its price falls when financial conditions deteriorate. This could change! But that's true of literally every thing traded.
Bitcoin has that rep as well.
No, it doesn’t. The evidence is crypto trading as a risk asset. People believe it could one day trade as a haven asset, but that hasn’t happened yet. Not close.
It's proving quite useful to Russia's central bank which is selling gold to China as many of its other reserves have been frozen.
Luna's downfall and Do Kwon's pending red notice have nothing to do with KYC or AML.
I disagree here. The 'killer app' feature of crypto is that it's basically imperfect banking without KYC/AML. Without crypto's popularity it's doubtful Do Kwon and Luna would have gotten such a foothold.
Pretty solid case for why these folks should go to jail. Or at the very least, be disgorged of their gains and banned from finance.
Excellent point.
The legislature ripped quite a bit of privacy and freedom from the banking system post 9/11 on an almost blind rampage, without doing much stopping and asking why things were they were. I admit it was the ultimate Chesterton's fence fail on the government's part and likely a big reason why a new fence seems to have been built with crypto.
Honestly even bitcoin the white paper seems to have had more thought poured into it than the Patriot Act, which kicked off much of the KYC reforms in the US. In reality I think many of the adopters of cryptocurrency realized exactly the dystopia that the banking system was going down and very deliberately tried to take some of the failures of government into account.
Don’t disagree, but throwing the baby out with the bath water and going full raw dog lets speed run the entire history of financial fraud is not a good idea.
America hasn't even discovered different colours for banknotes yet. It's parochialism, not regulation, holding you back.
Apart from that, nicely put.