The problem with money is too much, too fast, modifies the mindset of the holder. I know very good and smart people who earned money the ‘easy’ way change into douche bags or idiots or sometimes both. This is just another example.
To be honest I think he started out honestly with his true mission, not trying to scam anyone, but when he saw all that money in his bank account he probably thought “I guess I made it?” And decided to drop the whole thing.
The thing about people like him is, they are usually extremely careless and will eventually lose all that money without too much effort, either he will spend carelessly in gambling, or get caught by the feds, or burn it in some other way.
It’s usually always the same story. It doesn’t last. I studied someone who won a lot of money from a gambling business, to people who inherited a lot of money from family, to people who get money from investors without putting in much effort. They all usually end in the same way, they lose it all, and it’s usually because of bad management of wealth.
My hypothesis is that when they get money the shortcut way what they don’t get is the management skill that is required for having a lot of wealth. Money is fascinating, in what it does to the mind of the holder. How money reaches the holder, usually determines how long it lasts as well.
I’m studying a few more group of people, my hypothesis has not been wrong yet. People who work hard for their money tend to be able to make less go much further. They seem to be much more efficient, and are usually very good at turning 100 into 1000.
I have a friend that inherited a couple million at 25 and how he's handling it has really made me realize that it isn't the process of fast wealth that makes someone treat money responsibly. It's something deeper. Their "soul" or "core values" or something like that.
At 25 years old my friend took half of his money and he researched which Canadian Aboriginal tribes his grandfather and great-grandfather displaced with their logging industry and he directed his money to supporting their causes. He's just about finished his law degree and rather than use it to make money as a corporate lawyer or high priced attorney he's dedicating his career to helping refugees.
You're not wrong that it can hurt, but I don't think it is as much of a given as you're making it out to be.
Given power, people will show their true self. Money is just a proxy to power in a capitalist society. Give money to someone like your friend and they'll do great things. Give money to someone who would be horrid if they weren't constrained by the norms of society and they'll be horrid.
This hypothesis is somewhat contradicted by the experience of Jack Whittaker[0], whose life quickly descended into a series of legal, financial and personal tragedies after winning $114M, despite being a successful businessman with a net worth of $15M at the time he won[1].
edit to add: that second link claims that "Nearly one third of multi-million dollar jackpot winners eventually declare bankruptcy" but does not include a source.
I posted about Whittaker because his story is on-topic and interesting, not because I thought OP was making a serious scientific claim to which I had contradictory evidence. If you want more info try reading the links I included or doing a search on his name.
That's wishful thinking. In reality, if this was a scam, the guy always was a criminal and people who invested were fools. No need to post a cliche about people who got rich suddenly...
If someone handed me 100m I'd for sure make a fool of myself. Yeah I'd probably buy myself a masters and a startup, but I'd also probably buy a million dollars in useless tech, and god knows what.
I know stuff like this shouldn’t bother me relative to all the other stuff worth worrying about, but damn if it isn’t demoralizing. Makes me question why I even bother going into work and put in an honest effort every single day.
Don't be too demoralized. With crimes as with legal business stories you only tend to hear about the large successes. It is nice to think that if only your morals weren't as strong you could be a criminal multimillionaire, but it is doubtful in reality.
As a parallel there are thousands of kids setting out to become the kingpin drug-dealers glamorized in media and most of them end up dead, in jail or working bad dead end low level dealer jobs where they make less than minimum wage.
There are now over fifteen hundred different alt coins most of them languishing in complete obscurity and failure. Nobody knows the exact statistics, but I am sure the vast majority of the reported ICOs were failures too. The ICO market is unregulated so that it does not show when the promoters are buying their own tokens ... I guarantee you that most ICOs were basically propped up by the promoters in order to make them look successful so that they did not really make anyone any money.
The major difference between this and the drug dealers, is that the police have not moved in yet, so people are not going to jail yet.
So it is always better to work in creating real value and making an honest living. And don't worry about what would have been if you were a successful criminal. Consider the infinitely more likely possibility of what would have been if you were failed criminal, or just an impoverished barely-getting-by criminal.
I think in general your point stands but not with the audience of this website. I'm willing to bet nearly everyone who reads this has looked at phishing scams, nigerian prince emails, and now ICO's and thought to themselves "jeez it's like they aren't even trying..." Starting up a drug dealership I'm sure is tricky.. but it would only take one afternoon to set up a couple of the above schemes and A/B test your way to illicit success. There's probably plug and play github repos. I don't intend to encourage.. stay classy HackerNews!
Well you should take some solace in the fact that doing your day job won't land you in prison. ICOs are a good way to launder money and defraud impressionable speculators out of their money. It'll take a while but the securities regulators and prosecutors will have their day. The people that get away with securities fraud hide it with complex corporate accounting structures, ICOs are the dumb version of securities fraud. It is not too difficult to convince a jury when they guy is tweeting pictures of beer on the beach.
Irrespective of prison, there’s also a pretty good chance that what you do for a living doesn’t raise your chances of someone showing up and wanting to “discuss things” with you.
Ripping people off for €40 million may end well for this fellow or it might result in a few irritated “investors” (donors?) coming round with knives, or even just fists, for a quick chat about what happened to their money.
It might not be likely but that’s a risk and a much greater one than I would want to take. Besides, someone can only use the defense of polite society if he or she hasn’t already ripped the cover away.
> someone showing up and wanting to “discuss things” with you.
Yeah, there's more than a few cases of people ending up back in the US (or whatever country) in the trunk of a car. I may prefer prison over the constant fear of being "disappeared" by a bounty hunter or hired kidnapper [1-3].
A number of people "score" their life by the size of their bank balance. That is easy to do because hey a number is a number and they are easy to compare. As a life score however it doesn't reflect a lot of meaning.
One of the things I point out to young people who are just getting started in their careers is that nobody made the baseball of hall of fame by being the highest paid player. The things they did that counted were runs, and pitches, and defensive plays. Games played, and games won. Owners and managers throw around money to try to put together a team that can win the pennant or the series, but the players are evaluated, and judged, on their play not their pay.
So why would anyone evaluate themselves based on how much they have earned rather than a much more meaningful example like how much they have done. Start evaluating yourself on how many problems you have solved, or how many people you have helped, or how many lives you have saved. Those are good measures for a score. Money isn't.
This sentiment is great, and I happen to subscribe to the view that financial wealth is an imperfect signal of value created.
In reality though there is a psychological effect that benefits those who make a lot of money as long as other people know they make a lot of money. How much money someone is willing to pay you is inherently a value judgement on their part.
All else equal, is a player paid $100K a year or a player paid $10M a year more likely to make the baseball hall of fame?
I wouldn't disagree that there is correlation, after all by doing good stuff you get more of a say in what people will pay to have you do it for them. On the player question, if your a Giant's fan you might remember them paying $126M to Barry Zito, a Cy Young award winning pitcher. Somehow I don't think Barry is headed to the Hall of Fame.
> .. vs a luxury resort in a 2nd world offshore haven or a yacht
Unless he wants a life of paranoia, he's limited to countries who don't extradite to the United States [1]. Since his face and name are known, as well as his wealth, he'll likely have to share a good fraction of his proceeds with local officials to stay alive.
Minor point, Savedroid is based out of Germany, so I imagine it is more extradition to Germany that would be the concern. I imagine the net effect of the rest of your statement is the same though.
Yes, true, if outright fraud, I agree this is the case. Actually this would probably apply to any country which has substantial numbers of people or currency involved in this scam, narrowing his "acceptable country" list further.
Wealth in 2nd world or 3rd world countries has a lot of its own dangers as well. According to Twitter, he's in Egypt... if I were on the run from angry money people I probably wouldn't want to hide out in some place with so much violence.
Agree - your life in a 3rd world country with $50 mil is going to be far better than in a 1st world country. I don't think that one was a good argument.
The only good argument is that stealing from people is immoral.
He's not exactly robbing old ladies though. He scammed a bunch of idiots who willingly threw money at something they obviously had no understanding of. The warning signs for ICOs have been pretty clear for a some time now, but it seems like some people will only learn by first hand experience, how not to invest.
Actually, we don't know the identities of everyone who invested. I'm more hesitant to victim-blame than I am to blame the person who intentionally committed a crime.
I agree that it's a buyer beware market, but it's because of people like this guy. The laws are on the books and hopefully will be enforced. Just because it's a new tech doesn't mean it's a lawless frontier even though some people are acting like it is.
I tell you why it should: because you might want to do your work independently, someone might be willing to invest in you, and there is a third party that makes it impossible.
In all fairness, he has very little legal recourse while on the run. I knew a guy who ran off with tens of millions of dollars in 2008, only to have to have most of it stolen by the mob while hiding in Ireland. By the time he was caught and extradited, he didn't even care anymore.
You could probably just go to whatever beach he's chilling at, and just take what you want if you have the physical power to influence him to do so.
Well on the upside you aren't facing lawsuits and litigation for the next twenty years, or possibly prison time or extradition depending on what laws were broken where.
And the blatant display ala martin shkreli doesn't play very well once twitter is no longer the buffer between you and reality.
When you’re running from the police and angry victims, you have to NEVER screw up. You can’t ever use a credit card, call your family from a regular line, look up something on Google that could identify you, etc. that’s a hell of a lot of stress and I personally wouldn’t want it. Then again, I have plenty of money right now, but not $50 million.
I've never participated in ICOs and I do comment about cryptocurrencies. So what? I'm also not trying to rationalize anything. I _think_ that this is a PR. That's about it. Even if this is a scam, the exit was still hilarious.
Lots of speculation on Twitter that this is a misguided PR stunt.
After getting lost in replies found this article of a guy visiting their office today and finding it devoid of any CPUs and founder missed an event yesterday:
Posting a selfie and meme is a recipe for arrest, so to me the brazenness of the founder is a vote towards this being a very insensitive "April fools style" marketing strategy. Time will tell, but they certainly made the top of HN if that was their goal.
I would be very surprised if this wasnt a stunt. He posted a picture of an obscure beer (which is apparently Egyptian: https://raseef22.com/en/life/2014/03/16/beers-arab-world/) I cant imagine people couldnt thin the list of locations he is at to a small number.
It's not unusual to have a whole office full of screens and no PC anywhere in sight. Everyone just uses laptops nowadays, which many people take home after work. Then all you have left is desks and screens, and maybe some power adapters.
As someone that knows both @YassinHankir and @airbone42 personally, while being very skeptical about @savedroidAG , the stories of an Exit Scam just don't add up.
#1 The XX Millions is hard to actually get ahold off, its not all in cryptos that are hard to track, a lot of it is in the normal banking system.
#2 All of their communication up until this point indicated growth plans for their company. I've even had personal communication with @airbone42 roughly a week ago that indicated that.
#3 There is simply no response from anyone associated with the #savedroidico , for an exit scam atleast a few disgruntled employees would have spoken up by now.
#4 From all the people I've talked to in the Frankfurt FinTech Scene, it's like the company simply vanished. You can't do this that cleanly with that many people involved and have anyone have a good outcome even if they had access to all the capital.
#5 Without wanting to speculate, but I want to atleast put the idea out there: What if this is a case of extortion or (let's pray its not) kidnapping?
If find it plausible that we're witnessing the authorities handling the situation with the involved people.
#6 The whole PR Coup Scenario is a daft idea. They DON'T need more attention right now. Their product isn't ready yet, from my armchair, they have atleast half a year of development ahead of them before they can deliver anything. Why attention now?
Do we know this? (Also, nothing prevents big wires to Belize.)
> All of their communication up until this point indicated growth plans
Scammers lie.
> for an exit scam atleast [sic] a few disgruntled employees would have spoken up by now
Not necessarily. After Madoff, employees went dark while they talked to lawyers.
> You can't do this that cleanly with that many people involved
Pre-SEC America was rife with elaborate investment scams [1].
> What if this is a case of...kidnapping
What if it's the Illuminati? Occam's razor.
> Without wanting to speculate, but I want to atleast [sic0 put the idea out there
This is a bad disclaimer.
...
If you lost money in this, I'm sorry. Contact your local precinct and make a police report and then file a complaint with (a) the SEC and (b) your state securities regulator. (If you're in the U.S.)
I didn't lose anything in this as I said, I was sceptical and didn't like anything about the project. I just knew both of them for much longer than they do Savedroid and I'm concerned for their well being as they are people i'd invite to parties.
I might be completely wrong about all of this, but the scenarios discussed just make less sense when I put all that I know together.
If this is indeed an exit scam, the founder did himself no favors by posting south park memes etc.
The more interesting case is what would happen if instead, he'd just quietly take his money and go his merry way. It seems to me that it could be quite difficult to charge an ICO founder with a crime:
- ICOs do not sell equity in the underlying company.
- ICOs are not debt in the underlying company.
- An ICO buyer acquires neither a stake in the company, nor a right to interest payments. They acquire a bunch of tradeable integers. As long as they got their integers, and the trading platform still works (which in my limited understanding is not hard to do for Ethereum based coins), what cause of action does a buyer have against the company?
Even in cases where there IS a traditional debt or equity relationship, large white collar crimes are often hard to prove. ICO related scams might be all but impossible to prosecute if the principals refrain from spiking the ball, unlike this founder.
If he's really not going to do what he promised, then he'd better be on a beach in a country with no extradition treaty, and planning to stay there forever.
The US can pull you out of the Caribbean easily. They have extradition treaties with every country there:
Bahamas, Cuba, Grenada, Haiti, Dominica, Jamaica, Trinidad, Antigua and Barbuda, Barbados, Saint Kitts, France, Netherlands, UK
Cuba is the best shot there, despite there being an existing treaty. And they may turn you over for the right price (with the Castros gone, it's very likely Cuba is about to be more open for business).
The classic case, billionaire banker Allen Stanford:
"From king of the Caribbean to penniless in prison"
Extradition treaties, like a lot of international law, are a lot softer than you're implying. Your example had $7B, which can buy the best legal advice in the world, and he ended up in Antigua. Yes, the US technically can come after you, but unless you're like him or Madoff (in that you stole billions from rich people) you're unlikely to get the State Department's attention necessary to go through an extradition.
"U.S. authorities want to extradite from the Turks and Caicos Islands a Jamaican banker accused of running a Ponzi scheme that bilked investors out of nearly $300 million"
"Eight Jamaicans, including a former police officer were last week extradited to the United States to face charges related to their alleged involvement in a lottery scam."
"Prosecutors in several cities across the United States (US) are getting ready to unleash a wave of up to 500 [!] extradition requests for Jamaicans they believe are involved in the deadly lottery scam."
I know that Jamaica, the Bahamas, and British territories are technically Carribean, but that's not really the same as Antigua et al. for the purposes of this discussion.
Depends on which country you're a citizen of and where you are. The head of the Russian mafia was on FBI's most wanted list; we took him off when it became obvious we'd never get him. He is currently a free man living in Russia.
There's no such thing. brokep of the Pirate Bay fame fled to Cambodia for that reason and they just did it anyway. The thing about countries without extradition treaties is that they're typically less developed, and easy for larger nations to simply strongarm into giving them what they want.
Also the SEC says they're treating most ICO tokens as regulated securities. Given that this one was supposed to "automatically invest user funds into profitable ICO portfolios," it pretty obviously passes the Howie Test.
Have fun being on the run the rest of your life. Sure, some countries don't have extradition to the US, but politics change. Not to mention some of those countries would not hesitate to blackmail you once they know who you are and how much money you have.
I can't imagine growing old and never having remorse for a scam like this.
Here's the rub: if we go after this guy, our tax dollars will pay for the pursuit, pay for his extradition, detainment, prosecution and jail time. When people ask "why are my stupid investments your problem," this is why. Unless you're willing to pay a private investigator to hunt down your scammer, you're shifting your burdens on the public.
I think it's worth catching him just for the principle of the matter. Catching him shows that it's not okay to steal money from people by faking an ICO.
> it's worth catching him just for the principle of the matter
Pardon me, I did not mean to imply we shouldn't go after him. We should. Just wanted to remind us that these scams cost the general public money. Those costs are part of what securities regulations protect us from.
I would also be wary of simple citizens that lost a lot of money and look for you. I remember in 2014 people flew to Japan to confront MtGox in person.
Making the scam in-your-face is a sure way to make people very angry and revengeful. The beach from the photograph can probably be located.
People who win the lottery have ridiculously high rates of murder, suicide, being crime victims, and being involved in litigation... And they have fewer problems than this guy.
They hacked his office empty and then somehow hacked him onto a flight out of the country? And then they hacked all of his social media accounts and those of the people who worked for him? And then they hacked a new picture of him on a beach holding a beer?
The article didn't say anything about his office space or people that worked for him. It mentioned twitter and website. If you go far enough through my photos you can find enough pics of me at the airport and the beach holding a drink.
I see a ton of people on Facebook talking about how they have everything in "crypto" now. People that probably shouldn't be speculating with their entire savings. It's the old saying that when your cab driver is giving you stock tips, it's time to get out.
first of all that was a PR stunt. secondly the real danger as someone put it is not having money in crupto while world debt is record high and fiat currencies are going down and Blockchain is a paradigm shift.
It is a valid strategy to invest a small amount into a lot of ICOs, hoping that a few will rise very high and therefore make up for the loss of the rest. That's actually more or less what many VCs do, after all. As long as the majority of ICOs is honest, the occasional scam doesn't make much of a difference with that strategy.
Investing a lot of money just into one or only a few ICOs is insane, of course.
Mostly the founders and existing whales buying their own coins. A number of the ICOs are raising millions with only a couple hundred different investors (it’s a little club). Then when the coin is traded on the market the “investors” sell a portion for a massive profit.
Disclaimer: I utterly abhor and condemn this course of action, but…
Ironically, that would be one of the few technically plausible use cases for cryptocurrencies, if you implement it along the lines of Jim Bell's notorious essay "Assassination Politics": http://www.outpost-of-freedom.com/jimbellap.htm
Apparently, it was a joke from the founders to teach the ICO community about the possibility of a scam... Basically erasing trust and fueling hatred against themselves what they achieved.
This is a form of ICO awareness accelerationism. I'm very cynical about ICO's, so this may be brash, but I automatically consider every ICO to be a scam outright – if they were all this obvious the world would be a much better place, because people would finally stop participating in these ponzi-esque schemes.
What this guy's done, if it's true, is no worse than any other ICO who instead uses their funds to buy a house in the bay area and lease an SF office for a couple years and play ping pong until the cash runs out.
Yeah, it's kind of sad and funny to watch. Did they not pay attention in history class? Makes me mad that in the end all their playing "banking history" is probably going to cost me money in some indirect way.
Did anyone learn anything about financial regulation in any history (or other) class in any USA public school? I certainly didn't. If we're relying on high school to keep the public solvent, the public's insolvency is no surprise.
I too consider every ICO to be an outright scam. That's actually what led me to build (shameless plug) https://initialcornoffering.com, which pokes fun at many of the ICO anti-patterns I've seen.
Has it been confirmed his twitter and amazon accounts haven't been broken into?
Can somebody confirm that first image (https://pbs.twimg.com/media/DbDvp9iXkAYaY6s.jpg) hasn't been photo-shopped? Those images don't have any exif data, but it looks like twitter's stripping exif info.
They haven't found "him", they found the beach where the pic of the beer bottle was taken. Nobody knows when that pic was taken, by who, and who's hand is holding it.
Where are a lot of the ICO token purchases coming from? Are they all on questionable international exchanges that are trying to avoid regional financial regulations? Are the people trading on those platforms because they have no clear way to cash out currencies in their own country?
St Petersburg lottery. An hour's statistics teaches you that if there's only a P chance of winning, and the amount you win is N your expected outcome is NP so you should definitely consider spending anything less than NP to participate. High risk investments are great if there's a high reward, right? If you stick around for a few more hours they'll warn you that this assessment is... misleading at best if P is very small. But ICO investors aren't waiting that long, got to get in fast.
I have to admit it's amusing seeing cryptocurrency true believers slowly start to realize why banks, regulation and the SEC are critical to a functioning system. "There oughta be a law!"
ICO buyers are the new anti-vaxxers. Securities laws protected them so well for so long, they forgot about the virulence with which scams ravaged pre-SEC America.
I think there needs to be a place for extra-legal speech, free association, and economic activity. I think crypto is a useful tech to that end. I don’t think it being big and mainstream is sustainable at all, and it’s going to be snuffed out soon enough.
A distributed decentralized ledger is a neat and useful thing, but it should be as exciting as a new database–not the social revolution the excitable advocates think it is.
When you hear people talking about cryptos what you hear them say is exciting things about libertarian currency and being free of control. What they're actually excited about is money laundering and tax avoidance–foolishly at that. Avoiding government control by using a currency where everyone can easily get the entire transaction log for every exchange is just ridiculous. With really great ops-sec you can _maybe_ achieve it, but it's really easy to slip up and get caught.
I started a cryptocurrency art project I think could be really interesting[1]. With all these ICO scams and the amount of cryptocurrency marketing spam everywhere it's made it very difficult to get any sort of traction or feedback on anything in this space.
Make it possible to quickly get fat stacks of cash in any space and watch the space turn to crap.
I would love someone to try. If someone went to the trouble to accurately reproduce the unique ink application, the unique serial, and an accurate artist signature on an art that would be great validation for the project and would put a Lodrocoin print up there with a desirable fine art piece. :-)
Also if you're just leaving your Lodrocoin prints around in plain sight that would be the equivalent of leaving your wallet key taped on a post-it to your monitor. An interesting thing you could try with your art but it's also an interesting property of the art that the art is best "displayed" tucked into a drawer somewhere where nobody can see it.
Well, I would never risk my life doing wingsuit flying. It doesn't mean people don't do it. I only suggested that this might be a marketing scheme. It could very well be a scam.
To be honest I think he started out honestly with his true mission, not trying to scam anyone, but when he saw all that money in his bank account he probably thought “I guess I made it?” And decided to drop the whole thing.
The thing about people like him is, they are usually extremely careless and will eventually lose all that money without too much effort, either he will spend carelessly in gambling, or get caught by the feds, or burn it in some other way.
It’s usually always the same story. It doesn’t last. I studied someone who won a lot of money from a gambling business, to people who inherited a lot of money from family, to people who get money from investors without putting in much effort. They all usually end in the same way, they lose it all, and it’s usually because of bad management of wealth.
My hypothesis is that when they get money the shortcut way what they don’t get is the management skill that is required for having a lot of wealth. Money is fascinating, in what it does to the mind of the holder. How money reaches the holder, usually determines how long it lasts as well.
I’m studying a few more group of people, my hypothesis has not been wrong yet. People who work hard for their money tend to be able to make less go much further. They seem to be much more efficient, and are usually very good at turning 100 into 1000.