zlacker

> It would be like setting up a front-end to receive investments, and then depositing the money with Madoff. I'm not saying it's a legitimate business, just not a ponzi.

So, it’s neither legitimate nor a Ponzi. Cool, what is it then?

>>yunohn+(OP)
it's fraud

>>yunohn+(OP)
IANAL, but anything between fraud and gross negligence I guess.

>>josu+73
Fraud is very obvious. Which part of it is simply “gross negligence”?

>>yunohn+F7
They drank the kool-aid and actually thought that the risk of a depeg was very low, or that they would be able to pull out the money in time?

Hanlon's razor.

>>yunohn+F7
When you pretend to be ignorant about parts of a crime that you haven't been proved to be involved with (although you built your entire business around the crime.) Between being charged with malice or stupidity, the wise man chooses stupidity.

>>yunohn+F7
Investing client cash in a scheme that promises to pay 20% yields with an explicitly ponzi like setup seems like gross negligence.

Terra and the Anchor protocol should have appeared fraudulent to any expert from the very start.

>>josu+J9
I don't think Hanlon's razor is safe to apply in the finacial/cryptocurrency space.

>>josu+J9
That’s possible, though I would expect more due diligence from a (unregulated quasi) bank…

>>dropne+W
The whole thing reminds me of something more like baseball cards or other collectibles, where the monetary value rests in a collective belief in the inherent value.

How much of the real value of cryptocurrency is not monetary? How much of the value is in the existential value of participation, e.g. Dogecoin?

>>Agamus+O91
You're pretty much exactly right with this intuition. The infamous MTGox exchange, the grandaddy of all rug pull Bitcoin / crypto disasters, started out life as a platform for magic the gathering trading cards. Recognizing an overlap in both the mechanism and the type of motivation driving both types of trading activity.

>>shkkmo+sG
Then you haven't spent enough time in the cryptocurrency space.

>>Agamus+O91
networks derive their value from participation. ex. if the us government held 100% of dollars or berkeley had 100% of internet connected devices or jack had 100% of twitter accounts, these dollars or devices or accounts wouldn't be very useful