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Patrick McKenzie
@patio11
, 4 tweets, 2 min read Read on Twitter
Oh goodness, the NY AG document about Bitfinex would defy belief except it's exactly what you expect.
Bitfinex uses hawala through friends-of-employees as a settlement layer, according to their lawyers speaking to the NY AG.
Crypto Capital Corp apparently got all the money after they left Noble Bank. This was problematic because Crypto Capital Corp decided to just, you know, keep the money.
Bitfinex lied about their liquidity situation and withdraws being honored as requested. (This is my shocked face.)
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Patrick McKenzie
@patio11
The tastes of hyperconsuming outliers are by definition not the tastes of the population at large. Some business models, however, cause them to be quite influential.
Ad-supported models were one almost immune to this. Newspapers / TV stations basically can’t detect a difference between someone who uses the artifact once a week and someone who uses it 40h+ a week, and if they could, they’d be worth approximately the same amount of money.
This changed with pageview based online advertising, because a hyperconsuming outlier generates many more ad impressions.

The thing that really kicked this issue into the public spotlight, though, was recommendation engines which in optimizing for engagement made outliers.
Read 6 tweets
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Patrick McKenzie
@patio11
Tyler Cowen on how the biggest change in daily life from tech in next 20 years will be due to improvements in cars:

bloomberg.com/opinion/articl…

I've got an alternate one and, forewarned, this is going to be aesthetically very unpleasant for some people:
I think cooking will, by 2040, be a niche activity like e.g. gardening or sewing, not something which one would reasonably expect from substantially every household.

It's getting squeezed by a combination of long-running social changes, cultural norms, and...
... rapid innovation in business models caused by both the Internet, the rise of subscription- and marketplace-enabled commerce, and enormous innovation in delivery networks.
Read 4 tweets
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Patrick McKenzie
@patio11
New front in ransomware: someone is using disclosed Git hosting passwords to wipe the repo and then ransom back a copy for ~$500 in Bitcoin.

about.gitlab.com/2019/05/03/sus…
"That shouldn't work, because Git means that the company will have a full local copy."

It doesn't need to work 100% of the time or even 1% of the time, because this will be substantially automated, and the staff cost of figuring who at the company has the most recent repo > $500
I hesitate to say the following but since it might help at least one startup out there:

If you have your repository accessed by an external party in this fashion, irrespective of whether you have backups, you need to take a deep breath, then push the Big Red Button. Bad news.
Read 4 tweets

Related threads

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WhalePanda
@WhalePanda
Tether was 100% backed.
They used Crypto Capital, like many other exchanges as a payment processor without contract.
$850 million got "seized" in 2018 by "authorities".
Tether is no longer 100% backed so they take out a loan of $900 million to cover it, backed by Bitfinex equity.
Which means that Tether is backed as long as they can do the loan repayments?
But Tether has been closely working with DOJ for a while now.
NY AG starts investigating Bitfinex/Tether. Bitfinex sucks in PR.
Now DOJ charged Crypto Capital people.
Does this speed up the chance of Tether "recovering" the seized $850 million? (genuine question)
It also shows to what length some exchanges have to go through to get banking. That might be the saddest part.
To top it all off Bitfinex seems to be doing an IEO for $1 billion.
Read 3 tweets
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David Silver (SILVER MILLER)
@dcsilver
0/ Sometimes people only look at a Complaint and then ignore the lawsuit as it moves forward. That's a mistake. Sometimes the Defendant's response is just as important for either what they say or don't say. #Bitfinex #LetsDiveIn - iapps.courts.state.ny.us/fbem/DocumentD…
1) #Bitfinex moves to vacate the #PreliminaryInjunction - Obvious move, because the #PreliminaryInjunction as written (especially as it relates to the discovery) is VERY bad for them. The more people say Tether is backed by 74% is also bad...
2) Page 1, Paragraph 2 says in BOLD that the parties have been "cooperating for months." Ummmm, if #Bitfinex had been cooperating for months, it wouldn't find itself in this position. The amount of pages produced does not = cooperation. #MyGuessIsItWasCloserToStonewalling
Read 15 tweets
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Zirui 🧜🏻‍♀️
@zirui_z
Latest news: #bitfinex token will be named LEO, it’ll be a hybrid model of #bnb & #bfx
In addition to the logic of #bnb token, #bitfinex will repurchase and burn the tokens with the unfrozen funds in the future #usdt
The total amount is $1b, so far amount received for it is $500m #usdt
Read 9 tweets
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Caitlin Long 🔑
@CaitlinLong_
1/ STUNNED but not surprised by #Bitfinex #Tether news out of #NewYork. I'll let other cryptolawyers analyze it but here are two macro thoughts: (1) There's a big double standard here. (2) Exchanges, clean up your act--cryptographically prove your solvency
2/ First, the double-standard. Why didn't the NY AG throw the Martin Act at Merrill Lynch for doing something actually quite similar from 2009-12? Seriously, why the double standard??? Quoting the SEC's press release here: sec.gov/news/pressrele…
3/ "The maneuver freed up billions of dollars per week from 2009-12 that Merrill Lynch used to finance its own trading activities. Had Merrill Lynch failed in the midst of these trades, the firm’s customers would have been exposed to a massive shortfall in the reserve account."
Read 8 tweets
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Matthew Ball
@ballmatthew
1/ I'm stunned, but not surprised by AT&T's decision to extended their #Friends licensing deal with Netflix through 2019. A perfect example of, despite saying they were committed to winning in SVOD, Big Media wants to have their cake, eat it to - and then hope they get a 3rd cake
2/ #Friends is one of Netflix's most valuable titles. It's one of the most celebrated sitcoms, one of Netflix's most popular series, and has a whopping 236 episodes of tonnage - and a fervent fanbase
3/ AT&T could (and should) have simply moved #Friends to HBO, their leading SVOD asset. Imagine the impact on customer acquisition - all of a sudden the press coverage inundates all Friends fans to get HBO, if they haven't already!

Related: redef.com/original/a-six…
Read 25 tweets
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Jake Tapper
@jaketapper
NY AG: "In the absence of a functioning board, Mr. Trump ran the Foundation according to his whim, rather than the law... In 2016, the Board knowingly permitted the Foundation to be coopted by Mr. Trump's presidential campaign..."
2/ Remember when candidate Trump staged an event in Iowa for veterans instead of attending that last GOP debate? NY AG says that fundraiser raised $5.6 million, $2.823 million of which went to Trump Foundation.
3/ Then, the NY AG alleges, the Trump "Foundation ceded control over the charitable funds it raised to senior Trump Campaign staff." The campaign then highlighted these contributions on the campaign trail. NY AG considers this "an improper in-kind contribution" of $2.823M
Read 10 tweets

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