Inside the Cryptp World's Biggest Scandal

Discussion in 'Wall St. News' started by dealmaker, Jun 20, 2018.

  1. dealmaker

    dealmaker

    • SS
    • 06.19.18
    INSIDE THE CRYPTO WORLD'S BIGGEST SCANDAL

    Arthur and Kathleen Breitman thought they held the secret to building a new decentralized utopia. On the way, they plunged into a new kind of hell. A crypto-tragedy in three acts.

    AUTHOR:GIDEON LEWIS-KRAUSBYGIDEON LEWIS-KRAUS
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    ONE DAY INthe spring of 2010, Kathleen McCaffrey, a sophomore at New York University, received an invitation from a stranger named Arthur Breitman. On the basis of what Breitman had been told about her political persuasion by a mutual acquaintance, he thought she might want to join his monthly luncheon for classical liberals. (Breitman had also seen a photograph of McCaffrey and thought she was pretty.) McCaffrey, the curious type, accepted.

    BREITMAN WAS NOTtypically one to overextend himself socially, but he made a “beeline” for McCaffrey, she recalls, when she walked in the door. The luncheon, it turned out, was actually for anarcho-capitalists—people who believe that an absolutely free, self-regulating market will allow individuals, bound to one another by contract alone, to flourish in radical harmony. But by the time McCaffrey discovered she’d been misled, they’d already hit it off. She told Breitman she admired Milton Friedman. Breitman was pleased to report that he was friends with Friedman’s grandson, Patri, and offered to lend her a book about freedom by Patri’s father.

    To keep McCaffrey nearby, Breitman threw an impromptu party at his disorderly financial-district apartment after lunch. The next morning he texted her to say he’d reserved a table for two for that evening. Everything from that point forward felt like a fait accompli.

    The match, despite their vast differences in temperament and background, was an inspired one. Kathleen is relentlessly animated and quick-witted, with thick tangerine hair, steely eyes, and an endearing personal idiolect that suggests both an autodidactic reading in philosophy and economics and the gusty crudity of the merchant marine. Arthur is by turns retiring and pointed, with a soft, cublike appearance and a tight, parsimonious grin. Kathleen had grown up in northern New Jersey, the daughter of a Bronx-raised contractor and an Irish elementary-school teacher; she readThe Wall Street Journaland played on the golf team at her all-girls Catholic high school. Arthur had been raised just outside Paris by a well-known playwright/television impresario and a civil servant; at 18 he’d won France’s first-ever medal, a bronze, in the International Olympiad in Informatics, and he’d gone on to take his degree in applied math and computer science at the extremely selective École Polytechnique. Now, at 28, he worked as a quant in Goldman Sachs’ high-frequency trading shop.

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    July 2018.Subscribe to WIRED.

    ANNA HUIX
    Arthur only discovered that Kathleen was eight years his junior sometime later, when he remarked that her academic work, in epistemology and mathematics, frankly seemed pretty easy for a grad student. Kathleen was insulted, but she got over it. Arthur was unfazed by her youth; what mattered was thatKassleenhad a mind that could keep pace with his own. They admired in each other a brusque self-assurance and artless candor that others often perceived as arrogant.

    When Kathleen transferred to Cornell University that autumn, she optimized her schedule to spend time in the city with Arthur, who was infinitely more interesting than her classes. If in the middle of the night Arthur read about a rare kind of suspension-bridge support, he’d immediately want to try his hand at the application of its principles. The two of them once passed two very happy weekends of courtship in attempts to reconstruct an ancient catapult called an onager. He expected precision and rigor in her thinking, but remained blunderingly sentimental in his attachment to Kathleen, who had reserves of strength and conviviality that far exceeded his own.

    The weekend Kathleen graduated from college, she and Arthur traveled to France for a wedding. Following a drink at the storied Harry’s Bar, he brought her to a bench in the Place de la Concorde and produced a box. Kathleen opened it to discover the ring was upside-down. “It was,” as she remembers it, “the most Arthur thing ever. So much effort to go through, and such a small detail to screw up in the end.”

    Given his background in mathematics, computer science, and economics, it was natural that alongside bridge supports and primitive catapults Arthur was bound tofixate on Bitcoin. He bought his first bitcoins at a time when few people had even heard of them, and he badgered Kathleen aboutcryptocurrencyuntil she could parry to his satisfaction. Arthur spent countless hours poring over Bitcoin’s documentation. It clearly offered a terrific way to hold value, and to move value from one place to another, without paying for the services of a trusted intermediary. But it was clunky and limited, and it eventually became apparent to Arthur and Kathleen—“pedants by hobby,” Kathleen likes to say—that Bitcoin’s underlying technology, the blockchain, was capable of doing a lot more.

    https://www.wired.com/story/tezos-b...horror-story/?mbid=nl_061918_daily_list_p&itx[idio]=6066048&ito=792&itq=bef5f8a3-c758-4923-955d-92187a8b98c4
     
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  2. expiated

    expiated

    "If the SEC or the courts ultimately ruled that the Breitmans had been selling unregistered securities, they could face ruinous financial penalties. On the utility-token theory, their best defense would be the appearance of the platform. But relations with Gevers were deadlocked, and he still had single-signature access to the safe-deposit box in Zug that held the cold-storage laptop with the private keys to the crypto assets. He couldn’t steal the money—that would require a second private key, held by an entity called Bitcoin Suisse—but if the foundation’s keys were somehow disappeared or destroyed, the money would simply be gone."

    I won't even use credit cards except when it is totally unavoidable. Involving myself with cryptocurrencies at this point in time is completely out of the question!
     
    CSEtrader and dealmaker like this.
  3. Part and parcel for the immature market. Completely normal!