Merged Bitcoin - Part 3

Some of the cool things you can do with your friends in the crypto community:


The former CEO had previously indicated that the exploit may have been an inside job.

The hack was initially reported by the crypto Twitter community. FTX employees subsequently confirmed to popular on-chain sleuth ZachXBT on Twitter that hundreds of millions of dollars were flowing out of FTX-owned wallets. The initial figure was close to $650 million since FTX employees had started transferring assets into cold wallets as a precaution.

The exploit was later acknowledged by current CEO John Ray III who stated that there had been “unauthorized access” within hours of filing for chapter 11 bankruptcy on 11 November. The days following the hack saw the perpetrator swapping the exploited tokens for ETH. These funds were then bridged to Bitcoin using the RenBridge service. The perpetrator also employed mixer services to obscure the money trail.

Read more from Ethereum World News
 
The_Animus said:
I didn't know there was a term for this. This is basically what happened with all the NFT stuff too.
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Yep. And one of the indicators is the so called transfer fee that was to be paid to the orginator of NTF "art" has pretty much not happened. One of the reasons is that it interferes with wash trading.

And speaking of wash trading, there's a new study out that the majority of bitcoin transations and large majority of other cryptos look like wash trades designed to make exchanges look more successful. And, of course, pump the price.

CRYPTO WASH TRADING
https://www.nber.org/system/files/w...ted DeFi is the perfect setup for doing this.
 
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marting said:
And speaking of wash trading, there's a new study out that the majority of bitcoin transations and large majority of other cryptos look like wash trades designed to make exchanges look more successful. And, of course, pump the price.

CRYPTO WASH TRADING
https://www.nber.org/system/files/working_papers/w30783/w30783.pdf
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In a "water is wet" moment the study notes that
Our first key finding is that wash trading broadly exists on unregulated exchanges but is absent on regulated exchanges.
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psionl0 said:
In a "water is wet" moment the study notes that
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Yeah, but while regulated exchanges didn't exhibit the wash trading of the unregulated exchanges, they all benefited from price apprciation generated.

Unregulated exchange transactions were the vast majority (>97%) of exchanges.

regulated exchanges (Coinbase, BitStamp, Gemini, BitFlyer, Tibit, etc.) still only constitute less than 3% of spot market transactions
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The sector has got a lot of growing to do. Reminds me of the stock markets of 100 years ago which resulted in the "blue sky" laws as noobs were sold penny stock with blue sky promises and no connection to actual biz performance or orospects. . Didn't clean it all up but made a decent dent. Recently meme stocks came around proving that even though public, detailed, financial statements are required of all public companies, one can still see insane investor behaviour.
 
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marting said:
Yeah, but while regulated exchanges didn't exhibit the wash trading of the unregulated exchanges, they all benefited from price apprciation generated.
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I'm not sure how a regulated exchange would benefit from the activity going on in unregulated exchanges.
 
psionl0 said:
I'm not sure how a regulated exchange would benefit from the activity going on in unregulated exchanges.
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Regulated exchanges benefit in almost the same way as unregulated ones. Early on, transacttion volume increase signals higher liquidity and are associated with higher price. These affect all exchanges and increases interest for new customers looking to score.
 
marting said:
Regulated exchanges benefit in almost the same way as unregulated ones. Early on, transacttion volume increase signals higher liquidity and are associated with higher price. These affect all exchanges and increases interest for new customers looking to score.
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So "wash trading" increases transaction volumes which benefits all exchanges? That sounds like something that might need proving but I will take your word for it.

The real question is how bad this is. Obviously if you wanted to stabilize crypto prices then you would want to clamp down on wash trading but that doesn't sound like a goal in this thread.
 
psionl0 said:
So "wash trading" increases transaction volumes which benefits all exchanges? That sounds like something that might need proving but I will take your word for it.
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When it occurs on the kind of scale that report indicates, it increases overall demand and trading interest. That benefits all exchanges.

The real question is how bad this is. Obviously if you wanted to stabilize crypto prices then you would want to clamp down on wash trading but that doesn't sound like a goal in this thread.
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The classic use of wash trading in the stock market was as part of a pump and dump plan. The volume spike is seen as verification of the interest and "upside."

This still exists in the penny stock market. Some 20+ years ago I got a call from a boiler room touting some niche medical device stock I have forgotten the name of. Salesman suggested they had special info and the stock was going to rise sharply. This is illegal marketing but I admired the pitch and technique and signed up for a smallish amount but enough for me to bother following.

Sure enough, over the next week the price increased 5x then fell to about 1/2 what I paid. Just a classic pump and dump. Out of curiosity, I looked at the price history of the stock and it exhibited these spikes every 6 months or so. Cool. I just waited for the price to start the next spike and sold with a 2x profit.

Some years later the SEC shut them down. Turned out the brokerage, "First Jersey Securities" really was a boiler room.
 
marting said:
The classic use of wash trading in the stock market was as part of a pump and dump plan. The volume spike is seen as verification of the interest and "upside."
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That doesn't address the question "is it bad?"

If cryptos were to be adopted as a national currency then obviously we would want to clamp down on all forms of artificial price manipulation. Otherwise, who cares? Let those who want to gamble, gamble.
 
marting said:
Unreal how similar this TV commercial for First Jersey Securities from almost 40 years ago is to the 2022 super bowl crypto commercials:

https://youtu.be/0i-uOIuWfUE

"For Today's Investors with Vision" :)

Are you in?
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How about it is real if you drop it on your foot and it hurts?
We know this is never the case with crypto, but those venture ideas would embrace the world of physical objects that comprise everything from rising in the morning to resting the weary body in the evening.
 
Manger Douse said:
Core bitcoin developer who wanted the federal government dismantled wants the federal government to find $3.5 million dollars of magic bean money stolen from him

https://arstechnica.com/information...calls-on-fbi-to-recover-3-6m-in-digital-coin/
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He seems to be saying that not only were his wallets hacked, but the PGP keys he uses to sign software were compromised i.e. you shouldn't be downloading and using it at the moment. Unfortunately, according to the story, 97% of the nodes on the BTC network run his software.

So much for decentralisation.
 
Manger Douse said:
Core bitcoin developer who wanted the federal government dismantled wants the federal government to find $3.5 million dollars of magic bean money stolen from him

https://arstechnica.com/information...calls-on-fbi-to-recover-3-6m-in-digital-coin/
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jeremyp said:
He seems to be saying that not only were his wallets hacked, but the PGP keys he uses to sign software were compromised i.e. you shouldn't be downloading and using it at the moment. Unfortunately, according to the story, 97% of the nodes on the BTC network run his software.

So much for decentralisation.
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And apparently he's upset that no one's taking him seriously, or trying to solve this thing.

But what I'm wondering is, Why only 3.5 million? For someone who's been on to this right from the start, and been a central part of it all, why isn't he orders of magnitude richer than that --- on paper at any rate, even if not necessarily in terms of actual money in the bank?

(Or is it that he's got 35 billion stashed away somewhere? But then why's he so worked up over a pickpocket cleaning out his loose change?)
 
Chanakya said:
(Or is it that he's got 35 billion stashed away somewhere? But then why's he so worked up over a pickpocket cleaning out his loose change?)
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Massively wealthy guys would trample over children to pick up a fiver.

They didn't get wealthy by not caring about money to a pathological degree.
 
jeremyp said:
He seems to be saying that not only were his wallets hacked, but the PGP keys he uses to sign software were compromised i.e. you shouldn't be downloading and using it at the moment. Unfortunately, according to the story, 97% of the nodes on the BTC network run his software.

So much for decentralisation.
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How's this for a theory: it's horse-puckey and he's trying to generate a confidence crisis to pull a short sell.
 
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