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by PaulHoule 1291 days ago
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.
1 comments
siftrics 1291 days ago
...or we could just mathematically prevent the investment funds from stealing the funds.
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freejazz 1291 days ago
You apparently can't even comprehend the difference between theft and fraud.
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siftrics 1291 days ago
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.

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freejazz 1291 days ago
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.
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siftrics 1291 days ago
> 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.

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freejazz 1291 days ago
I've not at any point contested the differences between DEX and CEXs with you and you should really work on your reading comprehension so you can realize that.
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