I feel like we're repeating. You still seem to think that Pirate was scamming because there came a time when he couldn't make payouts. That is totally missing the point.

If you hire me to protect your $850,000 retirement so that you have $7,000/month to retire on, and I spend $10,000/month of it on hookers and blow, I am scamming you. You don't have to wait until I can't pay you the $7,000/month to say it's a scam. That scam isn't that you couldn't get the $7,000/month you were relying on. The scam is that I spent your retirement on hookers and blow rather than investing it.

Until you realize this or respond to it directly with some kind of rebuttal, we'll keep talking past each other.

What did Pirate say he would do that he didn't do? Nobody could have reasonably thought that Pirate was promising to make payouts even if his fund was bankrupt. If you take money as an investment, it's not a scam if the investment loses money. He clearly can't make payouts if the fund is bankrupt. That's not the scamming part. The scamming part is when you make payouts to people when you acquired the money by claiming you would "invest" it. The scam is that there is no investment at all.

No. But that's not what Pirate said and that's not what the PPT operators said. Pirate promised his customers he would invest their funds and that was not the case. PPT operators paid Pirate to make their customers the recipients of funds that they knew (or should have known considering dozens of people were telling them this) would be acquired by claiming to be investing them when such payments were not an investment of any kind.

I agree, but the thing is that these things are ignored only because we live in an economy where they *can* be ignored. If we lived in an economy where M1 was bound by fixed limits, we would likely also follow different rules for what can and can't be ignored.

I'm making the arguments that I'm making because I believe that they are true and because I believe that getting the community to accept them will reduce the number of times the community needs to learn this painful lesson. Passing the buck doesn't cut it with me.

Does Internet access work?

I love my country, but I fear my government.

It's "legitimate investment loss". Had Pirate been operating a passthrough to Zeek and there was no evidence he knew it was a Ponzi scheme, IMO he wouldn't be much more culpable than PPT operators and his investors. And I think that's one reason why the community is going to have to start holding people accountable all the way down the line to the individual investor.

Knowingly paying someone else to make you the recipient of fraudulent transfers makes you a scammer.

Again, nobody is arguing they scammed their own depositors. You can stop beating to death the argument that nobody is making.

The problem is that they shoot other people in the foot, not just themselves. When someone invested in Pirate, they were paying Pirate to take someone else's money -- someone who was told their money would be legitimately invested -- and give it to them. Clearly, that is not an actual investment in any sense of the word.

I don't see how you can make this argument work unless you want to argue that Pirate also did nothing wrong because everyone who invested with him knew what they were doing and he didn't do anything he promised he wouldn't do. The scam is not that Pirate couldn't make payouts. The scam is that the transfers were fraudulent because there was no actual investment activity.

You're seriously arguing that if you take a loss because you trusted someone, it's your fault for trusting them? Or are you saying it was ridiculous for anyone to trust Matthew? Are you secretly trying to make him look worse?

Yes. But again, I'm willing to give people who can even remotely plausibly claim that they didn't know it was a Ponzi scheme a free pass this one time. But hopefully now everyone understands that when something is obviously a Ponzi, it is in fact a Ponzi (or related scam).

This is the business model that Allan A. Ryan, Nelson Bunker Hunt, Yasuo Hamanaka, and countless others have tried. They've lost billions. It doesn't work. Fortunately, those guys all tried it with (mostly) their own money.

The problem is this: To move the price up, you must buy high. To move the price down, you must sell low. These things cause you to lose money. Once you get the price high, nothing stops anyone else from selling high and pushing the market back down. So you have to split the profits of your cornered and squeezed market with anyone who wants a cut of them. So you pay 100% of the costs of doing this and reap maybe 10% of the rewards.

And it's very seductive. When you lose money every time you try, you can easily convince yourself that if you just had a little more money, you could have made a profit. This is because whenever you leave the market, it will always do something later that would have made you money. It's easy to delude yourself after the fact into thinking that if you could have stayed in longer, you would have left at the right time. Of course, nobody ever knows the right time to leave.

Trying this "known to fail" strategy with other people's money would be despicable.

Did Pirate ever make an unconditional promise to pay out or claim that there was no risk associated with investing in him? The scam wasn't that he failed to pay out, the scam was that the transfers were fraudulent and the funds weren't invested as promised. Had he failed to pay out because of a legitimate investment loss, he wouldn't have been scamming at all. Risk is fine. Scamming is not. Pirate is not a scammer because he exposed his investors to risk. He's a scammer because all the transfers were fraudulent and the claimed profits didn't exist.

You do realize that this exact same argument almost equally applies to Pirate, right?

Again, you're responding to the argument nobody's making. We're not saying PPT operators scammed *their* *depositors*. We're saying they scammed *other* *pirate* *depositors*, just like Pirate did.

Again, we're not saying PPT operators scammed their own depositors.

For the fiftieth time, like seriously -- you're missing that they paid Pirate to make their customers the recipients of fraudulent transfers of other people's money where they knew that other people were told that money would actually be invested and where they knew that paying that money to their customers didn't constitute a legitimate investment of any kind. PPT operators paid Pirate to cut their customers in on his Ponzi scheme.

The PPT operators didn't admit it was a Ponzi either.

Then you don't understand what a Ponzi scheme is. The crux of a Ponzi scheme is that depositors are told that there is some underlying business or investment that does not actually exist.

"A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going."

Right, but you can't take that literally. Otherwise, everything would be gambling. Crossing the street takes the chance that you'll get hit by a car but it's not gambling. When you are being lied to about what is happening with your money, that's scamming, not gambling. When you play craps, that you might win or lose is gambling. That the casino might not pay you even if you win or that the table might be rigged is not part of the gambling equation.

For the same reason Pirate does.

There is no such thing as "gambling" on a "scam". Gambling and scamming are mutually exclusive.

Knowingly participating in a Ponzi makes you a scammer because you are paying the Ponzi operator make you the recipient of fraudulent transfers.

They did precisely the same thing Pirate did. In fact, they paid Pirate to do what he did!

They scammed everyone else who paid into the Ponzi scheme, just like Pirate did.

He had to do these two things, for reasons that I explained elsewhere. He had no other way to protect those of his investors who did not wish their information given to Pirate. Had he passed through information to Pirate, there is no way he could have prevented Pirate from trying to settle his debts directly, depriving other of his investors of their rightful share of those payouts. If you and I each half own a house, you can't cut the house in half, sell half of it, and keep all the profits as "your half". We are each entitled to half of the proceeds of the sale of any part of the house. You are not fully entitled to all the proceeds of the sale of half of it leaving me to try to sell my half by myself.

Now I really want some shrimp!

And everyone should make their own cocktail sauce. All you need is ketchup, horseradish, and lemon juice. You can add some cayenne pepper or hot sauce if you are so inclined. If it is too strong, add more ketchup. If it is too weak, add more lemon juice. If it is too mild, add more horseradish.

I believe you are operating on the assumption that he meant it as a joke from the beginning and knew that the chance of him winning his bet was effectively zero. Assume, for the sake of argument, that he originally expected to win the bet and collect every Bitcoin he could from those who bet against him and to pursue scammer tags for anyone who didn't make 100% payment. Under those assumptions, would you still say it's stupid, not evil?

Prior to this stunt, I trusted Matthew. You can probably find me vouching for him in public and I did the same in private. And despite my friendship and trust, I still believe that Matthew initially expected to win his bet and would have collected had he won. If you have any reason to believe that is not so, please share it. Pirate debt was selling for 35% to 50% at the time Matthew made his bet, so there were certainly many people who didn't think Pirate debt was worthless.

Isn't that more proof that he considered it quite possible that he would win and would have collected if he had?

If I never intended to sell you the shrimp but repeatedly promised that I would sell you the shrimp and wouldn't weasel out of it and you contracted out a buffet, hired chefs and servers, and then I ddn't show up with the shrimp and said "Ha ha, sucker! What a great prank!" -- I'm pretty sure you would.

This one time, yes. But next time, nobody has any excuses.