My take on the FTX situation is this: F*ck regulators

Warning: if you are a sensible person, do not read this post. Cry babies are not allowed to read this.

Let’s start stating my point mildly: F*ck regulators… yeah, f*ck those mfers. That said, should I really elaborate? Maybe I should for the slow ones who don’t yet understand how the real world works.

Let’s begin with a short summary of what happened to FTX so far:

Nov. 2: CoinDesk publishes exclusive revealing key balance-sheet details of Sam Bankman-Fried’s Alameda Research trading firm, showing it’s heavily invested in the FTX exchange’s FTT token.

Nov. 6: Binance CEO Changpeng “CZ” Zhao says he’s selling his remaining holdings of FTT tokens. (Minutes later, Caroline Ellison, CEO of Alameda Research, tweets that Alameda will buy Zhao’s FTT tokens for $22 each.

Nov. 8: The FTT token price falls below $22.

Nov. 8: Binance announces non-binding letter of intent to buy FTX, subject to due diligence, easing the industry panic.

Nov. 9: CoinDesk is first to report Binance is strongly leaning against buying FTX after just a few hours of checking its books and loans.

Nov. 9: Binance officially walks away from the FTX deal.

Nov. 9: Without details, Justin Sun drops hints at saving FTX.

Nov. 10: Bankman-Fried says Alameda Research, the trading firm at the center of the drama, is being wound down.

Nov. 10: FTX assets frozen by Bahamian regulator.

Nov. 11: FTX files for bankruptcy protection in U.S..

As the story seems to continue to unfold, I found this video with a good analysis of the following events after the collapse: Piped

This group of individuals, who have been demonising crypto for years, calling us “criminals”, associating Crypto and Privacy with the worst of our society, are now defending a group of real criminals, thieves, liars, fraudsters and psychopaths: FTX & Co. This same group of individuals has been pushing for regulations for years, and they will not stop until they achieve their goal.

For those of you who read this and think, “David, this is nothing new, it’s always been this way,” let me tell you that I’m not discovering anything new, this is just a reminder of the kind of trash that those who call for regulations are associating with. If you’re in the crypto space and you think regulations will be a good thing: you’re not the good guy here.

Conclusion: Long Live Decentralization, P2P, Privacy and Long Live Grin.

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Do you think companies like Ripple should be allowed to issue tokens though?

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crypto doesn’t need to be regulated because we are in a free market and if it collapses to $0 that’s free market working proving that it’s worthless, then as it all goes to $0 there’s nothing to regulate anymore.

what the regulators want is control of the potential and, therefore, control of the population.

how arrogant they must be to use a decrepit old man to ask for the global rules of crypto to be changed… let’s sink that a little… seek global control of an innovation they contributed nothing to, to limit people to what these psychopaths think is best for us.

edit 1: the same party that received the most ftx donations is pushing for global regulations… netflix’s next hit is written in real time.

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i think crypto exchanges should be regulated. A good regulation helps adoption imo eg. FTX collapse probably wouldn’t happen and in general people’s funds on exchanges would be safer. It’s also important to accept that vast majority will not hold their own keys, they’re not capable of doing that safely and it’s basically safer for them to keep their money on exchanges. That’s why it’s even more important to have good regulation around them.

In terms of cryptocurrencies themselves regulators should be aware that if the transaction amounts are not blinded then one could figure out where the whales live and attack them. To me that’s a good enough reason to believe that blinded amounts should not be seen as “he/she is hiding something from us” but instead “he/she is using blinded amounts for protection”. Now ofc you can do bad things with blinded amounts but the same can be said about weapons, cash, kitchen knife etc. People’s safety is more important than what a small minority of bad guys can do.

Cryptocurrency is decentralization, everything that is centralized is not a cryptocurrency.

The success of any decentralized cryptocurrency lies in its mass adoption.

Unite, open a business and use Grin, thereby popularizing it.

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Blinded amounts does not solve this. Graph analysis paints a pretty nice picture of who has the money, even with blinded amounts.

We need to stop spreading the narrative that blinded amounts makes us anonymous. Thats dangerously misleading.

True; but it’s like the iPhone when it launched, people used to say that the touch screen was a bad idea, and Jobs during an interview responded that they were basically willing to wait until people were ready before thinking about the taking profits. e-mail revolution the same, e-commerce, I think even cars, but you get the point.

I would say the same thing, I’m happy to wait until it is easy for people to manage their keys.

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what does graph analysis paint? Can they guess how much money i have? my guess is that it mostly can’t, except for coinbase utxos. If you have blinded amounts + payjoins then my guess is that they can’t analyze much. Sure they can figure out which tx is yours but they can’t know the amounts, so it could be a transaction where someone paid for chocolate or a house. What blinded amounts do is make transaction “content” anonymous which is imo good enough for everyday safe use

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Yes, this is one thing it can paint… I invite you to research the subject more, but I did not just make this up. This is well known in the privacy space. Chain analysis firms sell services on this principle.

I’m not here to cause FUD, but I think we as a community need to do better about acknowledging the limitations of our tech. As long as TXs are linkable, a chain observer can make significant conclusions about user activity, enough to “figure out where the whales live and attack them” as you say.

Not everyone understands chain analysis well. Its an advanced subject. But if someone doesn’t understand how it works, they probably shouldn’t go telling people chain analysis is not a problem.

On a more positive note, coinswap and payjoins should crush chain analysis capabilities :smiley:

can you give some info on where we can read something about that? i can’t imagine how one would find out the amounts, even if someone would give you their own transaction graphs. I imagine you can put some probabilities on some ranges (but i would count that as a guess). But yeah, payjoins kind of destroy tx graph data pretty much almost completely (if everyone does a payjoin). Coinswap is even better (if at least one node is honest) :slight_smile:

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Yeah, I think I’ll pull together some resources in another thread. But I dont want to distract this thread more than I already have :sweat_smile: