
The Parity fallout: Which ICOs are affected? - mgalka
https://elementus.io/blog/which-icos-are-affected-by-the-parity-wallet-bug/
======
touchofevil
This is why I'm really interested in Tezos. The promise of Tezos is that the
governance will happen on the Tezos blockchain via voting by holders of Tezos.
Decred is also doing something similar, but I don't think Decred has smart
contracts, whereas Tezos will.

Here's a recent Tedx Talk by the CTO of Tezos.
[https://youtu.be/SbaVNkyGT3M](https://youtu.be/SbaVNkyGT3M)

PS. I did not contribute to the Tezos ICO and I don't hold any Decred.

~~~
pavlov
There's a complicated legal situation around Tezos that seems to be causing
development delays. There is infighting among the founders concerning the
legal structures established to hide^H^H^H^Hprotect the ICO money [1], and
also a class-action lawsuit [2].

[1] [https://www.cryptocoinsnews.com/tezos-derivatives-crash-
amid...](https://www.cryptocoinsnews.com/tezos-derivatives-crash-amid-
management-infighting-and-stalled-development/) [2]
[https://www.cryptocoinsnews.com/tezos-founders-hit-class-
act...](https://www.cryptocoinsnews.com/tezos-founders-hit-class-action-
lawsuit/)

~~~
touchofevil
Yes, this is an unfortunate situation. Basically before the ICO happened a
Swiss non-profit was formed called the Tezos foundation. The foundation would
receive the ICO "donations" and then the foundation "may" provide the donors
with Tezos coins when Tezos launches. I think this whole setting up a Swiss
non-profit is just to get around the know-your-customer laws in the USA and
also to avoid the SEC's rules about selling securities to unaccredited
investors.

So now the Tezos foundation controls the ICO funds, which are now valued
somewhere around $500 million, and according the Tezos founders one of the
board members (Gevers [3]) has gone rogue and tried to grant himself a bonus
that the founders say is not warranted.

What I've always found strange is that the other two board members of the
Tezos foundation have never really been discussed publicly in any way. One of
them is Diego Olivier Fernandez Pons [1] and the other appears to be a company
formation agent, Mr. Schmitz-Krummacher [2]. I've been unable to find out how
these other two board members were selected, which is a bit odd considering
the fate of about $500 million and perhaps Tezos in general hangs in the
balance of how these two people vote. Gevers formed the "crypto valley" in
Switzerland, so I can understand he would be on the board, but I'm still not
clear on how the non-profit was formed and the first place and how the board
members were selected.

Here's a thread asking who is running the Tezos Foundation.
[https://forums.tezos.community/t/who-is-running-the-tezos-
fo...](https://forums.tezos.community/t/who-is-running-the-tezos-
foundation/649)

[1] [https://www.linkedin.com/in/diego-olivier-fernandez-
pons/](https://www.linkedin.com/in/diego-olivier-fernandez-pons/) [2]
[https://www.linkedin.com/in/guidos1/](https://www.linkedin.com/in/guidos1/)
[3]
[https://www.linkedin.com/in/johanngevers/](https://www.linkedin.com/in/johanngevers/)

Edit: This whole situation actually proves Tezos' point to me: that a
cryptocurrency should not be controlled by a small group of individuals. In
this case, the small group (the foundation) doesn't control the
cryptocurrency, _just_ the ICO funds.

~~~
charlesdm
1\. Foundations probably need multiple directors, this depends on the
jurisdictions.

2\. The people behind the project wanted to sell a US company to the
foundation for $20 or $30mm, and I think this Gevers guy basically said that
was excessive.

~~~
touchofevil
I think the foundation probably is legally required to have multiple
directors, but you would think that a foundation that raised $500 million from
"donors" would give out some information about who two of the three board
members are and why/how they were selected.

Regarding your second point, can you provide a source for that? What I've read
has alleged that Gevers tried to take a bonus from the ICO funds. "The
Breitmans said Gevers had sought to pocket a bonus from the ICO proceeds,
whose value had swollen to as much as $400 million because of a rise in the
value of bitcoin, and then lied about it to his foundation colleagues." [0]

[0] [https://www.finews.com/news/english-news/29289-tezos-
johann-...](https://www.finews.com/news/english-news/29289-tezos-johann-
gevers-ico-swiss-foundation-dispute-bonus)

~~~
charlesdm
[http://www.reuters.com/article/bitcoin-funding-
tezos/special...](http://www.reuters.com/article/bitcoin-funding-
tezos/special-report-backroom-battle-imperils-230-million-cryptocurrency-
venture-idUSL4N1MT53I)

PS: What a shitshow. These people are amateurs who have been given $500m, and
I wouldn't be surprised this project amounts to nothing.

Based on how I'm reading this, I don't think this Gevers character is entirely
wrong on how he's acting. But the article doesn't mention any bonus.

~~~
touchofevil
I didn't see anything in the article you linked to where Gevers says that the
amount ($20 million) the Tezos company would sell itself to the foundation for
is excessive. As I understand it, that was always the arrangement. The amount
the company would sell itself for was a percentage of the ICO funds raised, I
believe.

I do agree that the situation is a shitshow.

~~~
charlesdm
Not sure where I read that, can't find it anymore

------
mv4
Interesting analysis.

What I always find interesting about these crypto incidents is how quiet
everyone is, including the parties that end up "losing" significant amounts
irreversibly. There's never an investigation.

~~~
mhluongo
You want an investigation on how the funds got frozen?

~~~
matt4077
If your new $100,000,000 skyscraper collapses and the engineer says "oops, I
had my slide rule set to imperial units" would you not talk to a lawyer about
it?

In most cases, indemnification clauses are even invalid for gross negligence.
I seem to remember that software has carved out some limitations. It remains
to be seen how long they will last if idiots such as these continue to use
them in their little scheme to separate fools and their money.

------
wyldfire
While counterparty (XCP) isn't as rich as Ethererum, I wonder: is it adequate
for what many of these ICOs are intended? It's unfortunate that it likely
requires higher transaction fees but it seems much simpler to me (and
trustless).

~~~
willitpamp573
You're spot on. counterparty is a better platform for token offerings, and was
the dominant platform until the term "ICO" emerged, and all token sales took
to ERC-20.

~~~
CryptoPunk
The ERC-20 standard is now finalized as an official EIP (Ethereum Improvement
Proposal), meaning any bugs in the leading implementation will almost
certainly be considered a protocol bug and rolled back with a hard fork.

So I don't think there's any disadvantage in using Ethereum for token sales,
and plenty of advantages like experimenting with new token sale smart
contracts (different auction mechanisms to allow better price discovery), not
to mention the larger suite of compatible applications (anything ERC-20
compliant like Etherdelta or 0x for decentralized exchange).

Also, Counterparty uses a port of the Ethereum Virtual Machine, so any
innovative uses of it will have the same risks as using Ethereum.

~~~
willitpamp573
Counterparty can run the EVM port, it doesn't run on the EVM port.

~~~
CryptoPunk
Yes I didn't intend to imply otherwise. That's why I specified "innovative
uses", as opposed to all uses, of Counterparty as suffering the risks as
Ethereum

------
crankylinuxuser
Oh look. The ethdevs lost more money. I guess we'll expect to see another hard
fork, with more sinister language? (edit: 1)

Yeah, this whole episode is what's wrong with Ethereum. Solidity was sold as a
cure-all. And its a bugridden festering sore that leaves money for the
takings. These side effects should be caught if there was a good lang used:
and Im talking about a possibly nonturing complete DSL.

Instead, we have innovative companies that are building on this quicksand
thinking its a good foundation; its not. How many more millions will be lost
before someone goes back to the drawing board and does this monetary
infrastructure right?

(1)
[https://labs.mwrinfosecurity.com/assets/Uploads/_resampled/R...](https://labs.mwrinfosecurity.com/assets/Uploads/_resampled/ResizedImage600565-Capture3.PNG)

~~~
zeroxfe
This is the same kind of complaint as was with C, Perl, PHP, then Javascript.

All of these languages broke new ground, not in programming languages, but in
domains. The people building these languages weren't PL experts -- they were
just trying to solve problems. The domains got successful, and the languages
either evolved or were replaced.

This is exactly where Ethereum is right now.

~~~
crankylinuxuser
There's a big difference in code that runs in the browser, and code that
represents cold hard cash.

If I go to a shock website ( _.on.nimp.org) it 'll likely take down my
browser. That's about it. Worst case is I get hit with a 0-day. I _might* lose
money in the worst of worst cases. Mostly what I lose is time in restoring
from that.

With Ethereum/solidity, anyone anywhere can affect the 'chain, and inject
naughty bits and do bad stuff. Except instead of causing a security problem,
you deleted/took millions of dollars.

Point being, this language should be feature-limited, simple, and easy to
read/parse. There shouldn't be undefined things that lead to semi-undefined
functions. If you're making the next Brainfuck v2, sure have at. But this
isn't a toy lang or a browser lang we're talking here.

"The Code" (which you, nor most dont really understand) is the contract. Good
luck in seeing what you really agreed to.

~~~
JumpCrisscross
> _code that represents cold hard cash_

People traded "cold hard cash" for tokens. Those tokens then got lost, stolen
and changed in value. Speaking from the sidelines, people losing money isn't
of particular concern. We're getting some interesting science, economics and
art out of the process; re-allocating capital for those pursuits isn't
particularly bad for society.

~~~
crankylinuxuser
> People traded "cold hard cash" for tokens.

And, tokens are... Money! Instead of being enforced by people with guns who
will shoot you, it's enforced by math.

> Those tokens then got lost, stolen and changed in value.

Same with US currency, to the dot.

> Speaking from the sidelines, people losing money isn't of particular
> concern.

Really now? At least where I live, if someone or some place loses a lot of
money, cops are called, and insurance can be summoned. There's a big response.
And there's restorative methods to stem that problem.

And if I went and stole $1000 from a bank, you can be your ass the cops are
going to be there quick, and on a manhunt.

> We're getting some interesting science, economics and art out of the
> process; re-allocating capital for those pursuits isn't particularly bad for
> society.

No, we're not. The blockchain is inherently really awesome. So are the new
proofs-of-X being discovered. But the language, Solidity, is more like
Liquidity. The coding errors inherent here are major show-stoppers. I wouldn't
put $5 in that pile.

If someone could make a better lang and attach it, then I'd certainly
reconsider. But not with Ethdev, and certainly not with Solidity.

~~~
JumpCrisscross
> _tokens are... Money!_

Some people are calling them money. (Those same people don't seem to want the
rules and requirements that come with calling something money.) I don't see
why society needs to devote public resources to enforcing private crypto
claims. If people are harmed, they can sue. It's not like these markets
weren't screaming _caveat emptor_ from the start.

More broadly, we're getting value from detached observation. American
securities laws and conventions were built in the 1930s. They have since been
replicated worldwide. Cryptocurrencies are giving us a chance to see what laws
are still necessary, which may be anachronistic given cultural and
technological changes and for which there is a better way. Think of it as a
publicly-funded experiment for the benefit of finance.

