
$14M in ETH stolen from Upbit were laundered in May through well-known exchanges - clainio
https://blog.clain.io/upbit-stolen-ethereum-being-laundring-through-binance-huobi-and-okex/
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save_ferris
This is an interesting piece, and it highlights one problem I’ve noticed with
crypto in general recently, which is that these kinds of investigations are
largely being carried out by private entities who build platforms around this
type of forensics without any real ability to go after the exchanges that have
permitted this laundering.

Between this and Bitfinex refusing to submit to an external auditor and other
events, I have a hard time trusting the big crypto players any more than I
trust the big banks. Wasn’t that whole point of these coins to begin with?

It seems like the assumption that the problems with the current financial
system stem from centralization isn’t holding up, at least when it comes to
the administration of these big exchanges. They’re still running into many of
the same problems that big banks have, and frankly they’re not doing any
better of a job.

~~~
arcticbull
Not your keys, not your coins™ -- with that as the core philosophy of
cryptocurrency, can you even say this was stolen, let alone laundered?

It sounds like the person with the keys transferred the coins into another
wallet.

Resolved: behaves correctly. At least, as intended anyways.

~~~
save_ferris
That makes sense. I guess that seems to somewhat conflict with the concept of
the exchange as a service, at least for how laypeople understand currency
exchanges in general. It wouldn’t surprise me if most people with exchange
accounts don’t understand that coins not in their own wallet aren’t actually
theirs. The exchanges don’t really make that clear to their users either, at
least the ones I’ve used.

~~~
barkingcat
It turns out people want centralization :) I'm sure users mostly understand it
but they give the keys away anyway.

Core tenant of cryptocurrencies is purely anti-human

~~~
aspenmayer
Can crypto be simultaneously anti-human [nature] and yet pro-user [intent]?
Can the pain points of crypto be smoothed to make them pro-human [nature]
without losing the qualities that make them pro-user [intent], supposing that
they are pro-user [intent]?

~~~
verdverm
What about the situation, "I paid them, but they never delivered?".

How would wage garnishment, as ordered by the courts, work? (This is the main
one that needs answering because it is a simple example of the hardest anti-
human problem that goes against core blockchain philosophy... reversing or
forcing transactions)

~~~
erdii
escrow services

[https://en.wikipedia.org/wiki/Escrow](https://en.wikipedia.org/wiki/Escrow)

~~~
verdverm
That doesn't solve the general problem of complying with legal orders.

For example, how would escrow help with wage garnishment, suing a company and
winning, or generally forced transactions by court order?

~~~
aspenmayer
Not who you are replying to, but I answered and addressed those claims in a
sister comment, here:

[https://news.ycombinator.com/item?id=23199291](https://news.ycombinator.com/item?id=23199291)

~~~
verdverm
You keep saying you answered but you have not. That is very unclear and just
throwing around words.

You haven't understood the idea and instead hang on to narrow focus around
cash, which had nothing to do with the argument, because most people have
digital money that goes through institutions. Using fringe cases to justify
the common is the wrong way around.

~~~
aspenmayer
If your argument against cryptocurrency could also apply to cash, why don’t
you also say so? My point is that cryptocurrency has aspects of digital assets
and cash assets simultaneously. So if your argument equally would apply to
cash, which is commonly used, then I think it’s worth pointing that out.

Also, I don’t agree that my writing is unclear. I find your dismissal
unjustified by your arguments. I simply bring up a counter-example to your
argument with cash. You saying it is fringe and beside the point is not an
argument. To then criticize my writing is to miss the point I was making. I
don’t find that you are debating in good faith when you make personal attacks
on quality of writing when your own argument hasn’t been made or won.

~~~
verdverm
You haven't clearly replied to the scenario I presented and have rather used
this cash analogy (and idea that if I don't address cash than the question is
invalid) to continually deflect from from having to answer the original
question and how it applies to cryptocurrency.

Cash is a bad analogy because it is the only widely used currency, it defines
what we mean by currency, and it has always been a part of modern history in
some form. Cryptocurrency has fundamental differences from a digital, public,
immutable ledger.

So if you'd like to get back to the original questions, I'd be happy to
continue this discussion.

However if your only defense for cryptocurrency is "cash does it too so we
don't have to talk about it" then we can stop here.

~~~
aspenmayer
I’m not advocating for or defending cryptocurrency. I’m asking questions to
clarify what it is you are asking. I don’t see why you think I am deflecting.
Asking questions is as old as the Socratic method.

If you don’t think analogies to cash are a good answer to your questions,
please restate your question. I’m not using cash as an analogy, I’m using it
as a counter-example in the monetary marketplace that proves that different
monetary instruments have different properties, some of which are inherent to
the medium of exchange. I want to know why you think cash isn’t a good answer
to your questions. I also am curious why you think cryptocurrency is a bad
answer to your questions, if indeed you do.

~~~
verdverm
as expected...

I asked a question about how an immutable ledger, with public consensus, deals
with the reversal transactions as ordered by the rule of law. Do you have an
answer for that?

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RcouF1uZ4gsC
Too bad this theft did not affect the founders of Ethereum like the DAO
exploit did. Otherwise, they would have found a way to reverse this and get
people their money back from the hacker, even if it meant changing the
protocol and upgrading existing binaries.

~~~
ashtonkem
The fact that losses can only be reversed if you’re sufficiently well
connected to the developers is a major problem.

~~~
nexuist
The losses were reversed because the system was exploited, not because someone
had a close connection with one of the devs. Had they not forked the network
right then and there they would only be facing more of the same in the future,
reducing the reliability of ETH down to 0. No forks have been made since the
incident, and I would hazard to say none of the devs are planning on forking
anytime soon either.

I think one of the problems in this space is that people treat their addresses
like bank accounts when they should be treating them like cardboard boxes.
Sure, you can put your money in it, but you only keep your money so long as
nobody finds your box. Therefore, you should make as many cardboard boxes as
possible and spread your wealth such that breaking into any individual
cardboard box is worthless, and breaking into all of them would take so much
time it effectively becomes impossible.

In terms of securing keys, that's also a difficulty, but that's the price you
pay for this sort of experience. Any entity that could reverse your losses
could also make transactions on your behalf - ruining the point of
decentralizing in the first place.

~~~
ashtonkem
If I lose money because of a buggy contract, will the developers trigger a
hard fork for me, or is it just the DAO who gets that consideration?

~~~
nexuist
If you lost half a billion dollars like the DAO did, you would probably get
that consideration, too.

~~~
ashtonkem
That’s my point, if I lose a more paltry sum like my life savings, nobody will
lift a finger to bail me out. It’s only if my losses are massive will the
developers trigger a hard fork on my behalf.

“Code is law” only turns out to apply to those with small balances and poor
connections.

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sprusemoose
I met a woman last year who I'm pretty sure was cashing out for a hack of a
New Zealand exchange..

she didn't say it explicitly but she was getting 10% to cash out on Huobi for
a group of IT students in Guangzhou China. One of the guys was an american and
I think it was his job to find people to cash out. They were doing about 150k
USD a week, and she was pretty sure there were others doing the same thing.

he told her they found a way to get free ETH.

I sent a message to the exchange that got hacked Cryptopia or something but
they never got back to me

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miohtama
It will stop when Binance et. al. are sued to hand back the stolen property.

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chrischen
Are these "stolen" events part of the laundering process? That is, are fake
thefts used to obscure where the money goes?

