Bitcoin Forum

According to The Block:


The official announcement tells:



So... is anybody still keeping their money on various centralized platforms hoping for pennies?
You still don't see how risky is that?!

Because eveyone thinks that they have fond the next big thing, along with FOMO. So they keep dumping money into things that after they blow up in their face it was kind of obvious what was going to happen.

I am beginning to look at it the same way that I look at people gambling with some local bookie when you have 'legit' online betting. Or people who go to an illegal underground casino in NJ when they live 30 minutes from Atlantic City. People are idiots and scammers will figure out a way to make them want to give them money.

-Dave

After the Celsius incident. I don’t even want to stake a single penny in DeFi even on Binance savings although some of them have a good reputation. I’m happy already holding Bitcoin and earn slowly everyday when Bitcoin is pumping like what happening on this past few weeks. I consider holding is the new way of passive earning rather than risk my asset sending on different wallet and do the same holding method like what I did on my own. I will not trust anymore DeFi staking until regulators can give a real solution to protect investors on bullshit bankruptcy exit scheme.

I bet there are many more people holding coins on centralized exchanges and similar interest earning platforms thinking - it won't happen to them, they are to big to fall.
Many times this services trick users throwing out decentralized terms, adding swap features and connecting with shitcoin chains BNB and UST, like Hodlnaut did just few months ago.
One thing that I hope from all this services stopping withdrawals and going bankrupt is that it could teach more people about importance of real decentralization.

Real problem are the people, influencers and youtubers who keep promoting services like this, without properly explaining the risks.

In practice, this kind of lending platform is not defi. The smartcontract they built only works according to the commands on their dapps. When they want to control user funds like stopping withdrawals, just disable the button. And also, they eventually slowly built a semi-centralized subservices and made it more prominent with a bigger return offer. Using the "defi" brand is nothing more than bait for users and a way to make regulation less restrictive and demanding consumer protection.

And if you blindly follow people on the internet then you deserve what you get. Sorry, but that is just the way it is.
If it's too good to be true then it probably is not is nothing new. Crypto / the internet / etc. did not change that.

People are greedy and lazy and think they know better. Same as the people who buy whatever miracle product that they see on an infomercial at 2AM.

-Dave

Or more like people who still join Ponzi schemes or all sorts of HYIPs even when you try to convince them that they are scams

What is weird is that the masses are just allergic to having control of their funds. They think their funds are secure when a certain institution or centralized platform is holding it for them.
That's why you still see people falling for Ponzi scams even in 2022 yet there is an easy way of HODLing BTC in one's controlled address.

How do you think this circus world operates?
Almost everyone blindly listens to TV, ''experts'', government clowns, presidential puppets, and other philanthropists, because they all care so much about gen population and their well being, yeah right :D
It's no better situation in crypto world, I would say it's even worse than in everything else.

It's not that weird if you understand that masses don't want to have any responsibility and it's easier for them to always blame someone else for their loses.
Person who lost Bitcoin because of his own mistakes, losing seed words, private key or hard drive should only blame himself for this mistake, there is nobody you can sue.
Send Bitcoin to Bob's Interest Earning Factory so he can give you 1% profit, and you can always sue mister Bob and blame him.

Hodlnaut's problems began when they offered yields if their customers converted to Luna's UST stablecoin to receive yield. What Hodlnaut did was deposit their users' UST to a protocol which was a ponzi called Anchor where the protocol offered up to 19%. Hodlnaut gives their customers 13% and they keep 6% hehehe.

... and now most have ended up not receiving the 13% and not receiving back even their own money.
And I would not be surprised if Hodlnaut has withdrawn their 6% long ago. Because the whole risk goes to the customers (I'm even surprised they've offered such a big part of the profit to the customers).

This is the first time I am hearing about Hodlnaut and I am actually happy about that. Knowing as little as possible about DeFi seems to earn and save more money than knowing where to stake your coins. ::)

The thing is, Celsius also had a good reputation. They all have a good reputation when it's all sunshine and rainbows, but as soon as things start going sideways, that's when the ugly truth comes out. What happened to Celsius or Anchor today can happen to Binance Savings or any other similar site tomorrow. 

On this very forum people can find ways to invest. Let's head back to p2p lending and business-doing, crypto'ers!

Perhaps the longevity of their stay is the reason, because why now? Not much has changed in two months, so if they hold up that long, there is no reason to close them now, and forcing users not to withdraw their money is another problem.

I don't know, but if conditions improve and users return to deposit normally, I believe that greed is what controls people, and then the platforms have the right to steal money.

I think they will follow the Celsius bankruptcy plan to as safety precaution for there company in case the price gets ugly on the following months or weeks. They timing there announcement after the short rally of crypto which I assume they are planning to salvage there customers balance while the price is still in profit compared to last two months. Forcing there customers assets is there best chance to trap money that will cover there bankruptcy funds once they file it.

This is the best indicator and warning that DeFi lending right now is in the deep shit area which is prone to this kind trap game scenario.

It would have sounded better:

If I scroll down and somebody has already posted this I'm going to get really mad!  ;D


Oh for god's sake, do we have a full list on who invested money in that crap?
What's next, the PBOC, NRZ (nationals rails of Zimbabwe), the Council of Endor, the Avengers Retirement Fund, Umbrella Corporation?

I see their animation is still going on, 4.08% APY on BTC? Yeah, makes sense.

"Recent market conditions". Just another way of saying "We made ridiculously risky investments/loans/gambles". My bitcoin is going through the exact same market conditions but I haven't lost a single satoshi because I didn't make stupid gambles.

Same nonsense we saw/see with altcoins, ICOs, IEOs, NFTs, DeFi, etc, etc, etc. Next shiny thing comes along promising obviously bullshit returns, bunch of newbies lose money. Rinse and repeat with some new buzzwords.

Or perhaps instead of screwing up the entire cryptocurrency space with scam after scam and thereby enforcing governments to swoop in regulate everything they can get their grubby fingers on, we could just stop throwing money at these obvious scams?

Reminding you that the majority of the crypto community is in for a quick buck. They don't care what's the risk as long as they get these interests. The fact is: They won't get these interests forever, because the lending platforms are just making high-risk investments for every dollar they receive.

Sounds like you think "investors" (which aren't really investors since you don't create capital when trading cryptocurrencies) don't know where they put their money in. They pretty much do, and if they don't, it's their responsibility to educate themselves and comprehend to whom they trust their money.

That's correct, I knew that. And it may make sense if you do this with 10$, or 50$, maybe a bit more.

But when one already has thousands of USD invested into bitcoin, and when bitcoin is known to bring very big returns if one has the patience to wait for a couple of years... risking so much for so small benefits is pain stupid and I fail to understand it.

I know that people are greedy. I know that greed can make them not think straight... but so many, with so much money falling for this kind of schemes... is... preposterous.

Does it though? $50 each from a million idiots, and the scammers totally honest unsuccessful cryptobusinesspeople can enjoy retirement. Not giving any money to these ponzi-like structures is the only way they can be defeated but sadly that's not gonna happen.

Anyway, it kinda interesting that I've never heard of these collapsing "platforms" before, so they must have worked out their marketing to not waste money on old scrooges like me and focus on the malleable yoof.

That's correct, but 50$ is an amount people may be playing at the lottery, so trying their luck with whatever HYIP / Ponzi is not that uncommon. Unadvised, yes, stupid, yes, still, not uncommon, not a surprise.



I've put altcoin announcements and HYIP both on ignore quite some time ago and.. I don't know, this may be the reason in your case too?

Anchor as I have already mentioned was a ponzi scheme to encourage stablecoin users to convert their USDT, USDC or DAI to UST and deposit them to the protocol for high yield. Printing more UST also increased the demand for Luna and pumped the price. I reckon the mistake of Do Kwon was not protecting UST's peg when it began falling to $0.98. He waited until UST depegged to $0.90 when everyone has already panicked and withdrew from Anchor.

And while Hodlnaut in Singapore in Southeast Asia halted withdrawals, Nuri, formerly Bitwala, operating since 2015, in Germany in Europe filed for insolvency.^[1]

It seems we could create quite a long "Another one bites the dust" series with all these centralized platforms falling one after another.

Signs of risks are everywhere in the wide crypto ecosystem. One crypto exchange falls here, a crypto lending platform falls there, a certain altcoin's wallets got hacked everywhere, a stablecoin company freezing funds, blockchain bridges falling, and so on and so forth.

Amidst all this, a Bitcoin in self-custody in a hardware wallet remains intact and safe.

---

[1] https://cointelegraph.com/news/german-crypto-bank-nuri-with-500k-users-files-for-insolvency

I mean not just Bitcointalk, but also e.g. ads on news sites. Maybe I just tune them out subconsciously.

I never heard about this platform before. Anyway, not first and, unfortunately, not last such kind of platform turning into scam. Personally, I keep my money away from such lending platforms. Interest that you will get simply isn't worth to risk. Yeah, you can invest $50 or $100, something what you would afford to lose in bad case scenario. But few $ interest that you will get in the end is nothing. To get something significant you have to invest much more, but you must be an idiot to invest there thousands of dollars worth BTC.

Another victim of Hodlnaut has been discovered. Algorand Foundation has lost $35 milllion in USDC after having exposure in the cryptolender before it suspended withdrawals.

It appears very similar to Celsius where they might not really care about their trustworthiness and reputation to make many stupid investments with their depositors' coins. If they are wrong, they declare bankruptcy and go create their next scam.



The Algorand Foundation has revealed a $35 million USDC hole in its balance sheet as a result of exposure to embattled cryptocurrency lending firm Hodlnaut, which has paused withdraws since Aug. 8.

Source https://cointelegraph.com/news/algorand-foundation-outlines-35m-exposure-to-crypto-lender-hodlnaut

Oh, yea, yet another piece of the great list of "strong" businesses, built on top of each other like castle of playing cards...
I guess that we have to be happy there's crypto winter now and then to get rid of these before they grow bigger (and make even more damage when they collapse).

Some dude at work buys $50 worth of lottery tickets every paycheck, 26 times a year.  He and I started researching bitcoin around the same time, I stuck with it, he stuck with the lottery tickets.  Last year when BTC was hovering over $40k he came to me and told me he had calculated what the amount he spent on lottery tickets would have been worth if he had spent that money on BTC instead.  He was beside himself for being so shortsighted...  He's still buying buying lottery tickets instead of bitcoin.  ::)

Some people are so emersed in their "get-rich-quick" dream that even if they come to conclusion on their own that the rug has been pulled out from under them, they'll still cling on.  This guy I'm talking about is no idiot, he readily admits he's spending the money for the dream.  I've tried gently reminding him that Dreaming is Free (https://www.youtube.com/watch?v=TU3-lS_Gryk).


Yeah, scam adds have already saturated the internet, even on non-crypto related sites.  Wasn't it mycelium wallet that was advertising 1xBit not long ago?  I tend to ignore that stuff, but once in a while it's so outlandish.  Even quality service like blockchair are not immune.

Hehe if they want to become similar to banks but their source of profit is from the yields of very speculative Defi tokens, they will certainly never become big. Everything will be over when the bubble pops. What will be head shaking in the cryptospace is these type of services will return and it will again lose millions of users money.

Let's be fair and admit it, he's probably also paying for the adrenalin when the numbers are extracted/picked  ;)
But I totally get your point. Of all get rich quick schemes, I think that the lottery is the worse.


Heh, timeless :)


"Rinse and repeat" is many scammers' strategy. And it keeps working astonishingly well in crypto.

The bubble doesn't even need to pop. The latest court documents from Celsius show that they somehow managed to lose enough money as to be insolvent during the massive bull run up to $60k. We can only guess what kind of wild gambles they were making in order to achieve that, considering they could have bought and held nearly anything and made big profits. These companies can collapse at any time, and take all user deposits with them.

It's super easy as well. Call it an ICO, DeFi, staking, yield farming, liquidity mining, lending platform, etc. Just come up with a new name and promise risk free profits, and you are guaranteed to get investors. You don't even need to have a working product or income stream.

Haha, yeah I readily admit that.  I only recently started gambling a little bit (and I do mean a little bit,) and now I know first hand the thrill is real, even if you only have about $2 on the line, lol.  I guess the emotions are piqued the more you "can afford to lose."

Much of the same mentality must apply to the victims of these HYIP scams.  I don't mean to minimize the culpability of the scammers, but lets continue to be fair; if it wasn't for the greedy these scams wouldn't work.


No, a bubble isn't needed.  If it's one thing about crypto I can be certain of; the scammers are always there.  The scams are only more successful during bull markets, and therefore we here about more of them.  They're still lingering in the shadows during a bear market.

Indeed. I would have expected that people start to learn and stop jumping in so eagerly. But, as a recurring topic, it may be somewhat (or at a certain level) related to the gambling mentality so wide spread.


Yep, at least it applies to those chipping in a few dollars "just in case". But I fail to understand how can some put there life changing amounts or at least money they don't afford to lose. Those I pity. Those should stop doing this/falling for this.

I think the gambling analogy is a good one. I thought for some time that these scams worked exclusively on newbies. That once you had lost all your money on one shiny new shitcoin or shiny new centralized platform, that you would learn your lesson and just stick to holding bitcoin in your own wallet in the future. But then with the collapse of platforms like Celsius and Voyager, I spent a bit of time on Twitter and Reddit reading about what had happened to these platforms. And over and over again I saw users wishing how they had just stuck to BlockFi or some other platform, somehow completely oblivious to the fact that every single one of these platforms has the exact same (lack of) business model, and every one is just as risky as the others. I saw people who had lost everything with the collapse of Luna talking about the next "bitcoin killer" or "ethereum killer" they were going to buy.

It is very much akin to gamblers chasing their losses. It is highly destructive behavior, and no amount of pointing out just how shady or outright scammy all these projects are seems to make any difference to these people.