[dysarray]

People really think "cryptocurrencies are based on code" means no fraud can happen with them.

The decentralized nature of most cryptocurrencies makes it difficult for a single entity to manipulate the market or falsify transactions, but it does not completely eliminate the possibility of fraud. In addition, the anonymity of many cryptocurrencies can make it difficult to trace the source of fraudulent activity, which can make it harder to prevent or prosecute.

[ditonal]

No, people think that if self-custody your private keys carefully, nobody can steal your coins.

If you participate in actual DeFi where you keep your keys and participate via smart contracts, nobody can steal your coins.

All of this was true and is true. What happened is that corporations adopted the language of cryptocurrency to mean something totally different to trick consumers, like calling FTX a DeFi platform.

You want a villain, it ain’t the maxis who kept repeating “not your keys, not your coin”. It’s VCs like a16z, sequoias, and paradigm who lended credibility to centralized exchanges that defrauded people who ignored the cryptocurrency advocates.

The FTX story only strengthens the facts and narratives the cryptocurrency advocates have been saying. The real fraud is happening in venture capital which is rotten to the core.

And by the way, bitcoin is down this year but not nearly as much as VC darlings like Carvana and Affirm.

VC is the scam. VC is the engine of pump and dumps in both TradFi and crypto centralized exchanges. The real voices of cryptocurrency have been vindicated.

[freejazz]

>"No, people think that if self-custody your private keys carefully, nobody can steal your coins."

Yeah, people think that. But what does that have to do with FTX. Yeah, if you never sent money to FTX, they couldn't take it. What insight!

[siftrics]

It has to do with FTX because people are taking the FTX situation and using it to blame crypto.

SBF stole users' deposits. Fact.

SBF could not have done this had FTX been a self-custody DEX. Fact.

Crypto's sole purpose is to prevent the theft that occurred. Fact.

The theft happened because crypto was not used. The theft happened because users did not self-custody (which they could have, as is demonstrated by the billions of dollars custodied in numerous DEXs today). Fact.

[freejazz]

The fact that this happened in the crypto space is prima facie evidence that "Crypto's sole purpose is to prevent the theft that occurred. Fact." is wrong. Full stop.

[siftrics]

You're conflating the entire crypto space (rife with theft and fraud) with funds self-custodied on a blockchain (never once has seen theft because it is mathematically prevented).

[freejazz]

I'm not conflating anything. This is the crypto space. The crypto space isn't only DEXs, it's full of CEXs and its where the vast majority of money is.

[PaulHoule]

And you don’t have the culture of controls that exist at real financial institutions. Often you hear a story of some firm like Amaranth or M.F. Global that blew up and what you always find is that the basic controls that prevent an organization from taking on disasterous positions are not in place.

It’s a simple truth that an investment fund that is getting more deposits from withdrawals can vaporize the money and not have any problems until people ask for the money back. That is why financial institutions need strict controls.

[siftrics]

...or we could just mathematically prevent the investment funds from stealing the funds.

[freejazz]

You apparently can't even comprehend the difference between theft and fraud.

[siftrics]

The fraud that occurred is SBF said users retain the title to their deposits and, quote,

"we do not invest user deposits, not even in bonds"

and yet he _did_ take user deposits. He defrauded them by taking their funds. This is also known as theft.

This type of fraud, which also counts as theft, is not possible with self-custodied funds.

[freejazz]

Theft and fraud aren't the same thing. Obviously, one can commit theft by the means of fraud. Fraud is a personal representation and trust relationship, and cannot be solved by a mathematical equation. A DEX might preclude the need for trust relationships in order to prevent the circumstances that make fraud possible, but it doesn't solve for fraud and, as FTX proved, crypto itself (using the commonly understood term, as opposed to the one you invented where the only things that are crypto are DEX) doesn't solve for fraud.

[siftrics]

> Theft and fraud aren't the same thing.

I never said they were.

> A DEX might preclude the need for trust relationships in order to prevent the circumstances that make fraud possible

So you agree?

You just admitted that DEXs would have prevented SBF from committing this fraud. That's what I'm trying to convince you of.

Those who do not distinguish self-custodied funds from non-self-custodied funds, like you refuse to do, will continue to be defrauded and stolen from.