Important: If you've received a text from a wrong number, this article describes exactly the Pig Butchering scam that you're being set up for. Have you received a random text like "Shall we grab a coffee soon?", "How have you been lately?", or "Let's go to the new restaurant." You'll find that an attractive, professional woman texted you by mistake, but she thinks you're a friendly person and wants to keep talking. After a few weeks, she'll tell you about all the money she made through investments and offer to help you invest. As you put in more and more money, you'll see huge returns on the (fake) website. When you eventually try to withdraw your fortune, there will be a small fee, followed by a tax payment, followed by more fees. Worst case, you end up like the banker in the article, frantically trying to borrow $18 million so you can recover the mythical $47 million.

This is an extremely common scam; the group https://reddit.com/r/scams is very interesting, with many stories of this scam and others. Key takeaways: it's easier to get scammed than you'd think. Never spend money to withdraw money. Don't respond to wrong-number texts. Anyone who wants cryptocurrency (or gift cards) is scamming you.

While Hanes's actions were criminal, another big story is about systemic failures in their banking controls and how they contributed to this failure:

Board allowed a single individual to wire tens of millions without additional approvals

No automated systems flagged the unusual transaction patterns

Previous red flags from Hanes's 2011 firing for questionable loans didn't lead to enhanced oversight

Board continued considering his requests for more money ($18M) even after learning of the initial theft

Reliance on personal trust and reputation substituted for proper institutional controls

No separation of duties or multi-party approval requirements for large transfers

Community banks need strong governance regardless of size or personal trust relationships.

"personal trust and reputation" often means back-room shenanigans.

I respect the spirit, but I can't think of a system of controls, or a matroyshka doll of sign-offs, that ends up with the small bank CEO not being able to give orders, at least, without the bank being O(1000s) of employees as opposed to...10s, optimistically.

The general mechanism to prevent abuse is that the person giving the order is distinct from the person performing the action. This ensures that a second set of eyes inspects the order and notes any inconsistencies. Such a control was lacking in this case.

The CEO can give orders, but there should be literally no way for a single person to transfer that much money without approval.

Even our accounting system is integrated with a vendor management platform that first verifies the recipient is a known vendor, and tied to the banking part that actually issues an ACH/wire transfer such that it can't happen until approved.

The fact that there's essentially zero governance at a bank is unacceptable.

> but I can't think of a system of controls that ends up with the CEO not being able to give orders unilaterally most of the time

The primary system of control for small shops is going out of business when you're dumb enough to lose $47M and getting replaced by more competent people running the competition

This wasn't a sophisticated attack - Pig Butchering: https://en.wikipedia.org/wiki/Pig_butchering_scam.

The scammers promised him outrageous returns, and he kept giving them more and more money - without ever actually seeing any real returns.

One has to wonder how this bank ever managed to be successful before.

With all the fraud and scams in the world - how did no one find this guy sooner?

The profiles of scam victims aren’t always what you expect. A lot of otherwise successful people reached their positions through networking, trust, and risky bets that advanced their careers.

A lot of businesses operate on trust networks at some level. The difference is that successful operators in this space will only place calculated bets and will rapidly update their level of trust when someone fails to follow through. This person apparently didn’t learn that lesson.

There is also a tendency to keep digging once a victim is deep in the hole. They know their job is already lost if they stop now, but just maybe there’s a chance that a little more digging will reveal a turnaround that covers up their past mistake. Scammers exploit this to encourage incrementally more digging into an already deep hole.

> networking

reminds me of a time I went to an event on meetup, I think I made a new friend so we meet up later together at a coffee shop he starts asking me what I know about marketing... I'm like no way... is this (makes a pyramid shape with my hands) guy stops talking

Why I've not been scammed. Why I'm not successful.

But seriously though. Compounding variance is a crazy upshot if you're lucky.

A good saying I heard a while ago was “you don’t get scammed because you’re stupid, you get scammed because you’re human”.

These scammers aren’t random individuals, they’re business that invest a lot of time and energy into working out how to scam people. They’re professionals targeting amateurs.

>A lot of businesses operate on trust networks at some level.

100% this. No one is immune. Not even "savvy tech people;" Theranos and FTX were similar affinity frauds (https://en.wikipedia.org/wiki/Affinity_fraud) commited against Silicon Valley old-money and VC circles, respectively.

To be clear: no biotech VC ever invested in Theranos. The people who are actually “savvy” in that industry (everyone) stayed clear because even cursory due diligence revealed the core problem with the science.

That’s what separates competent people from rubes and tech VCs. A bit of due diligence.

+1. It is also possible for tech savvy people to fall for regular scams (automated text in the middle of the night from your bank etc..).

It is 2025 - still banks can't do everything through their apps. To Fintech: Stop SMS based OTP , have better apps. You no longer have the excuse that you can't hire engineers.

Yeah, not that I think I'm all that exceptional, but I've realized that truly astronomically successful people are separated from me as much by risk tolerance and a frankly short-sighted-seeming commitment to a single goal as by talent or skill. Survivorship bias sometimes makes me wish I was willing to risk it all on a bad bet too, but a sober look at the typical result of that approach makes me glad I'm not.

Charles Lindbergh was good enough- and lucky enough- to be the first person to fly New York to Paris and became the most famous man in the world when he won the Orteig Prize. Six other people weren't quite good or lucky enough, and died pursuing the Ortieg Prize. If you look it up on Wikipedia you can find their names, but I can only name one of them off the top of my head (Charles Nungasser was a famous French WWI ace), and I suspect that one makes me better than 99% of the people alive today at remembering these men.

Everyone would like to be Charles Lindbergh, but far more common to be Charles Clavier or Noel Davis, failing, dying, and forgotten.

More importantly, for every Charles Lindbergh, there are a hundred to a million people with just as much skill, talent, charisma, whatever, who just had slightly worse luck in some aspect.

For that reason, we shouldn't over-index our society around the Charles Lindberghs.

Bonus points: You are less likely to empower literal nazis.

> without ever actually seeing any real returns.

I am sure he "saw" real returns on a very real looking app or website. As we transition to a cashless society we are all getting use to the numbers on our computers and phones representing real money.

My paystub is digital, it goes into my bank account directly and the numbers on my computer go up. I spend money by taping a computer chip onto another computer chip and then the numbers in my bank account drop. I can also digitally transfer those numbers to a brokerage account and click a few buttons and then the numbers go up and down depending on how people are feeling about the stock market. In the past few years, seemingly always up, which I think is priming young or naive investors to believe investments never fail.

> I am sure he "saw" real returns on a very real looking app or website.

Exactly: "Hanes told Mitchell a confusing story. Not long ago, Hanes explained, he started investing in cryptocurrencies with the help of some people he met online. First, he and his partners deposited money on a reputable U.S. platform for buying and selling crypto. The profits were enormous, he said: He took out his phone to show Mitchell his account balance, which seemed to indicate that the investment was worth $40 million."

And frankly, that's an entirely reasonable result for having invested in Bitcoin at any number of times, which was also by all reasonable measures a bad idea. I think even people who support the existence and value of crypto would agree that Bitcoin winners are most like stock-lottery winners than particularly savvy investors.

Crypto is great for scams even beyond it's infrastructural advantages because a lot of people made a ton of money from investing money they couldn't afford to lose in things that were pretty indistinguishable from the actual scams.

The difference between a real crypto exchange and a scam crypto exchange is that you can actually withdraw your cryptocurrency from the exchange.

This nuance lost on the common cryptocurrency speculator given that they have no idea what cryptocurrency actually is or how it's supposed to work.

> I think is priming young or naive investors to believe investments never fail.

Investments fail, there are plenty in the news. Broad market indices, however, don’t fail. There have been numerous bailouts over the previous decades. Why would one assume any future government wouldn’t continue bailouts if all the previous ones did?

The act of a bailout couples the credit of the rescuing organization with that of the rescued. That's literally what a bailout is: the rescuer agrees to take on some of the losses and credit risk, usually in return for agreements for future payments and power over how the business is restructured and managed. In the process, the credit and assets of the rescuing organization are damaged, and the bailed out organization is saved. Purely financial transactions never affect the actual reality on the ground, only how risks, responsibilities, and rewards are apportioned.

When the organization is as big as the U.S. government and has as good credit as the U.S. did in 2008, you can save an awful lot of financial institutions. But if it gets to the point where everybody expects to be bailed out and people start acting accordingly, you can't. Eventually the government ends up falling, as people start realizing that the economy isn't actually working and everybody is just cooking the books with financial transactions.

Government policy makers know this, and their livelihood is dependent upon the continued existence of the government, and so at some point they declare "Nope, bailout is not going to happen this time. You're on your own." At that point, the last group of people who took stupid financial risks are left holding the bag. It's very much like a pyramid scheme: the going is good as long as you can find a greater fool to assume the risk from you, but at some point there are no greater fools, and you find out the greater fool was you.

>At that point, the last group of people who took stupid financial risks are left holding the bag.

Isn’t that all the policy makers, old voters, taxpayer funded DB pension funds, etc that depend on broad market equity index fund returns?

Obviously, the system breaks down when it breaks down (when the currency has no purchasing power left to lose), but until then, the entire political apparatus is incentivized to bail out asset prices.

And if that isn’t possible, then the status of your investments/brokerage/bank accounts is going to be the least of your worries, as you will have more immediate concerns about procuring food/energy/shelter/security.

We've never had an executive whose financial policy positions include eliminating FDIC and that much of the federal deficit is fraudulent so can safely be disregarded and left unpaid. Believing in continuity at this time is a poor bet.

Governments and nations collapse. Anyone who was bullish in 235 CE Rome would have died long before their investments would be back in the black.

235 CE Rome? The Western Roman Empire lasts another two centuries- Romulus Augustus is deposed in 476 CE. That's longer than the US Constitution has existed (ratified in 1788).

In many respects the deposing of the last Western Roman Emperor is a bad date to use for the "Fall of Rome", given that the general socioeconomic trends of the time are fairly continuous for that period and contemporary sources didn't place much value on the shift of politics.

The Crisis of the Third Century, which starts in 235, is where the inflection point between "broadly stable" and "broadly negative" sets in, and the shocks both of the Crisis of the Third Century and the Plague of Justinian are each larger than the shock of the deposing of the last Western Roman Emperor.

I agree that Augustulus and Ordacer mattered to almost no one by 476, which is why it happened the way it did.

However, the point I was trying to make is that Rome's decline sure lasted a very long time indeed.

Additionally, 235 being so important is only obvious in hind-sight. To anyone living in the Empire in 235, I suspect it felt an awful lot like the Year of the Five Emperors (about as far away from 235 as Diocletian is the other direction) and it wasn't until a while later that it became clear that no Septimus Severus type was going to be able to put it all back together quickly.

> The Western Roman Empire lasts another two centuries

How long to you have to live, to see a return?

235 to 285 were tumultuous times, civil war and all that goes with it

> Broad market indices, however, don’t fail.

Famous last words

Especially when you look at how it is distributed. At least market cap weighted... Makes me really question just how high can the line go.

It's a classic example of a long-term trust network getting breached, in this case by a trusted local that got in over their head. The bank was created to provide loans to locals, mostly farmers where everybody knew how farm loans worked and obviously did well doing that.

People don't understand that these trust networks are only as strong as the weakest link. Even with everyone having good intentions, they don't understand that people can be blackmailed, have mental health breakdowns, etc.

It's also a more poignant tale of a small, community where (thanks, Internet!) international grifters could nonetheless inject themselves.

Or, more cynically, this guy was destined to be scammed and the internet in short order put him to the test. One has to think though that if it were a local scammer we would not be talking tens of millions of dollars.

Its interesting to think about it this way. Like, this community's "financial opsec" was their isolation from the rest of the world. No one on the outside can attack them if no one can even point out the town on the map. The internet makes that approach impossible.

Yeah, it might even be worst than that. If I were a scammer I would seek out these small-town banks looking for my mark.

And while we're at it, find the business owners of the auto dealerships in any metropolitan area. These families and the ones that own the largest construction contractor companies are the lesser-known millionaires living in our midst that might have large bank accounts.

And who knew small town church coffers might have millions lying around.

Unless I missed somewhere in the article, it is possible that it wasn't a scam and he probably just leveraged his initial stake. When it fell below the margin, he needed the money to avoid the loss.

The article talks about him being persuaded by persons "met on the internet" to "invest" in "crypto". There is absolutely no scenario in which an attractive woman sends you a LinkedIn message with the intent of getting you to make legitimate - albeit leveraged - crypto investments.

>One has to wonder how this bank ever managed to be successful before.

The article touches on exactly this:

>No one in Elkhart has managed to make sense of the mystery at the center of the betrayal: Why did a successful, financially sophisticated banker, a man the whole town trusted for decades, gamble his life away for a shot at crypto riches?

Though this guy had been previously fired from the same position at the bank in 2011 for financial irregularities under his watch, so they kind of only have themselves to blame:

>But in 2011, the leaders of the Kansas Bank Corporation grew concerned about Hanes, according to Tina Call, who served on the company’s board at the time. They had discovered problems in his loan portfolio — borrowers who lacked sufficient collateral, financial paperwork that didn’t seem to add up.

>Hanes was eventually fired for reasons that remain in dispute years later.

"This Guy" is everywhere. People fall for scams all the time, and as a society, we are failing to educate them with the sense to sniff them out. That, and a regulatory environment where everything goes, means that people of all walks of life are getting suckered every day. Only a matter of time that one of those people happened to be a small local bank manager with access to millions.

If it wasn't a crypto scam, it would be a lottery scam, or a job offer scam, or romance/pigbutchering scam, or a tech support phone scam, or a meatspace MLM scam like Amway and Herbalife. There is no shortage of ways gullible, financially-illiterate people can be separated from their money.

A recent post from a crypto reporter gave a good write up of how he almost got himself scammed [1]. It sounds like it followed the exact same script, even down to the Aunt with a crypto trading firm. The lengths that the scammers went to in order to prepare him for the scam was impressive. It gives some personal insight into how even those who should know better find themselves involved.

[1] https://unchainedcrypto.com/how-i-almost-got-slaughtered-in-...

I mean the job of the scammer is not a difficult one for guys like this (and almost certainly Mr Hanes). Use a picture of an attractive woman and make them believe they're about to get their dick wet and you're 95% of the way there.

> People fall for scams all the time, and as a society, we are failing to educate them with the sense to sniff them out.

IDK. It's one thing to fall for a scam and lose all your money. It's another thing to, after all that, go to your board of directors, ask permission to invest bank money in the scam, and when they say "We don't feel comfortable with this" tell them "Too late, I already invested the company's money in this for you." This is not a financially illiterate person, but someone who seemingly knew he needed board approval for an investment at scale, yet simultaneously ignored it and assumed he would be given it when asking retroactively.

There's a great many other failures of control here, like staff disobeying policy when he told them to. And perhaps it's my family history speaking here, but I suspect this guy has an undiagnosed mental illness (bipolar?).

Agree with your points. But I think we're unlikely to see tens of millions of dollars in an Amway, Herbalife hustle.

> People fall for scams all the time, and as a society, we are failing to educate them with the sense to sniff them out.

One of the companies I work with recently started looking at partnering with this company: https://scamnetic.com/

I like the idea of providing better education about scams to consumers, but this company gives me some pretty weird vibes. I wonder if we're on the cusp of another security theater boom similar to the plethora of companies that sprung up around identity theft and mostly seemed to exist to allow companies to mitigate any responsibility for their poor data and security practices.

This exactly. And Crypto's biggest "innovation" by far was giving us an entirely new unregulated financial market with zero consumer protections that included, as a bonus, the trappings and added complexity of software and let con men the world over dust off every money scheme from the last hundred years and do a fresh round.

Edit: Further, "education" shouldn't even be a factor here. You should not need to protect yourself from being scammed. Taking advantage of people's trust and stealing their money should be illegal, the offenders should be punished, and the victims made whole. There is no reason in a civilized society to permit financial crimes, which is what this shit is. Stealing is fucking stealing, whether you take something from a store, whether a bank issues bullshit fees, whether an employer doesn't pay fair wages, whether a con man tricks you into buying ape pictures.

> You should not need to protect yourself from being scammed.

Under the current administration, you need to protect yourself far more than before.

- The Consumer Financial Protection Bureau is gone.

- The Justice Department will focus on "violent crime", even though that's mostly the job of local law enforcement and the FBI doesn't handle 911 calls. In terms of dollars, white collar crime is far bigger than violent crime. (Burglary in the US is way down, about a fifth of what it was in 1990.)

- The administration plan is to move crypto enforcement from the Securities and Exchange Commission to the Commodity Futures Trading Commission. Heavy payoffs by the crypto industry have enabled this. [1]

It's called "deregulation", suckers. Open season on Americans.

[1] https://www.nytimes.com/2024/11/06/technology/crypto-industr...

The difference between theft and a scam is that a scam requires participation from the victim based on a false premise, whereas theft requires no participation from the victim.

>whether a bank issues bullshit fees, whether an employer doesn't pay fair wages, whether a con man tricks you into buying ape pictures.

So basically giving someone a bad deal is therefore theft? This isn't a principled idea to hold, it is pretty much a slippery slope to call any transaction you don't like theft afterwards.

One advantage of cryptocurrency is that it prevents parties from "renegotiating" deals like this after they've made them. Fraud is pretty uncommon on say, the silk road or something for the same reason it's uncommon on ebay or craigslist: when consumers have to actively consider the trust networks they are using, the market becomes more transparent and trustworthy. When you defer to some arbitrary, opaque authority to settle transactions, that's when you get situations like this.

> So basically giving someone a bad deal is therefore theft? This isn't a principled idea to hold, it is pretty much a slippery slope to call any transaction you don't like theft afterwards.

It's not about whether or not I personally like it, it's about whether or not it has the value it's ascribed to. NFTs are murkier in that some people believe they have value, and I guess that's fair. I think it's demonstrably false, but I doubt a person who believes they have value would consider an NFT purchase fraudulent, and therefore would not pursue it.

If however a given person was suckered into buying an NFT by someone, and later realized it was worthless, I think that's absolutely something that at least bears considering in terms of it being fraud, in a court of law. I don't see how it's different from any other situation where a given individual has sold worthless assets.

> One advantage of cryptocurrency is that it prevents parties from "renegotiating" deals like this after they've made them.

One huge disadvantage is that on any cryptocurrency with any decent amount of traffic as a currency is that the value of it shifts wildly from the beginning to end of the transaction. And that can bite either party to the transaction, which is why the only currencies that see substantial use as a currency are the ones with low adoption rates. It's basically pointless to accept, for example, Etherium as payment unless you yourself are speculating on it's future value. But that's not a currency then, not in any normies' definition. A hundred dollars is worth the same today, for all intents and purposes, as it was a year ago. Plus or minus a few percent for inflation. The $4 you plunk down for a fancy coffee is not going to be worth $0.50 or $400 by the time the barista hands you the cup, otherwise no one would use money.

> When you defer to some arbitrary, opaque authority to settle transactions, that's when you get situations like this.

Cryptocurrency defers to the blockchain, and the various software that interacts with it. This is literally no difference to deferring to any other centralized institution to form trust. The only difference is the layman has no way to seek justice from a blockchain.

Yep. Much of cryptocurrency content is just "Discover Why Financial Regulations Exist" speedruns.

The fact that a decade previously in 2011, Hanes had been found to push a bunch of questionable loans, was fired, but then a year later was back in as president shows that he probably just got greedy.

This story is featured in episode 1 of the Scam Inc podcast series from The Economist. Pig butchering scamming is a huge business, well worth a listen.

https://www.economist.com/audio/podcasts/scam-inc

Warning: podcast spoilers

In the first 3 episodes (free to listen), the podcast team pulls the thread and finds that the scammers are a highly organized system of scammers.

They are based out of Myanmar, outside of the law of the central government (basically warlord country). They trick people with English skills into coming to Thailand for a job then smuggle them across the border without their know.

Recent news update: Just in the past week, Thailand used their military to invade and free thousands of people who were being held captive in these warlord towns, meaning this scam organization likely lost their pig butchering talent.

Well done Thailand. They need to free the slaves in the rest of Myanmar, Laos and Cambodia now. (guardian article https://www.theguardian.com/world/2025/feb/19/myanmar-scam-c...).

The others are trickier as the government officials get paid off but it Thailand, China and Vietnam said free them or we close the border it would put a fair bit of pressure.

Incredible podcast.

I got very annoyed by his portrayal in the first and especially last episodes of this podcast. Especially by the woman in the last episode who said her heart was broken for him and there was no justice in locking him up.

Shan Hanes was both a victim and a serious criminal. If he had lost just his own money I'd feel terrible for him. But as he got in deeper he was knowingly taking money first from his employer and later directly from his own customers' accounts. He took steps to cover his tracks. Shan Hanes is exactly where he belongs.

Edit - I listened back. Her name is Kathy Wilson, a mental health professional in Colorado. She called criticism of Shan "victim blaming". She compared his situation to the bank being robbed at gunpoint. She again calls his sentence "victim blaming".

I will say I think his 24 year sentence is barbaric but I often feel that way about American prison sentencing.

He was a thief that stole people's life savings.

He was used by more successful thieves. He is still responsible for his actions

I feel terribly sad for him, a tragedy for him and his. But he choose to steal

The lesson here isn't "don't fall for scams", that's obvious, and it just takes a more sophisticated set of lies to trick smarter people out of their money (Enron + Arthur Anderson).

The real lesson is "don't use other people's money for your own schemes", which is exactly how he got rich to begin with. Banking taught him the opposite lesson for years. And voters couldn't care less about primary'ing politicians for banking regulation even after the mortgage crisis, so it will never, ever stop.

Previously discussed around coverage around Hane's sentancing 6 months ago.

https://news.ycombinator.com/item?id=41314542

Sounds like this was bound to happen sooner or later. Why was this fool allowed to wire that much money out of the bank - he was only caught when he asked someone outside of the bank to literally give him 12 million dollars.

This is why you get so many unknown number calls and texts. Best not to answer or reply.

Back in 99/00 a friend of mine received the 'I am a Nigerian prince' email. This scam was very new at the time and neither of us had seen anything like it before. My friend was believing and accepted it as a good money making opportunity, whereas I was instantly 'this is so obviously some kind of dodgy thing'. Luckily I was able to persuade him to not follow up.

> For now, though, he relishes the idea that Hanes will suffer in prison, enduring sleepless nights and days filled with misery.

I both completely understand how/why he feels that way and am also disheartened that this is so many people's viewpoint on prison.

All that said, Hanes is/was an idiot and a snake. It's one thing to be taken for a scam, it's another to steal from work/church/friends/etc for a scam. One I can forgive, the other, not so much.

John Reed Stark, former Chief of Internet Enforcement of SEC, explained it best on 60 minutes:

Crypto is a scourge, it is not something you want in your society. It has no utility. It is pure speculation. There is no balance sheet to crypto, there is no financial statements. There is no audit inspection, examination, net capital requirements, no licensure of individuals involved, and there is no transparency into it. That creates real systemic risks, not just risks for investors.

But the other part people don't talk about enough is the dire externalities that are enabled by crypto. Every single crime you can think of, is easier to do now because of crypto. Especially ransomware, human sex trafficking, sanctions evasion, money laundering. North Korea is financing their nuclear program using crypto.

Crypto companies accounted for almost half of corporate donations in the 2024 election cycle, with some contributing tens of millions of dollars to help Trump win a second term in office. Trump previously called Bitcoin 'a scam against the dollar', but after crypto industry plowed tens of millions into the election, Trump is now for it.

>the dire externalities that are enabled by crypto. Every single crime you can think of, is easier to do now because of crypto.

replace crypto with railroad in the 19th century. Or even just Internet in the 90-ies. Or AI in 20 years.

Those technologies offered actual utility, that's the difference.

One thing that stood out to me was that all of these relatively small-time "rich by Kansas standards" farmers lost a huge chunk of their wealth when one institution went insolvent. I was wondering, why didn't they diversify their investments?

There's this line:

> In 2012, Hanes returned as president of Heartland, which adopted an ownership structure that has become common across America: The bank was controlled by a group of roughly 35 local investors, including Hanes and his wife, as well as Jim Tucker and his father. No one outside Elkhart would dictate the bank’s future, and all the profits would flow back into the area.

Ahh, ok, so they probably couldn't just sell their shares on the open market. And this is not to blame the victims, of course. I guess this is a downside of this business structure. I wonder if there are ways to mitigate this risk - some sort of insurance?

There was nothing stopping a gullible manager from just ... transferring all the money away? uh

Sure makes it seem trivial to just take the money and run. No need to involve any pig butchers in the process.

It's inevitable I suppose that if we allow large numbers of banks to exist then some of them will have poor management and poor controls. It's better when tiny banks get scammed by crypto brokers than when large banks start trading CDOs with poorly understood correlation risks.

I hear the same thing happened beforehand in Brockway, Ogdenville and North Haverbrook

Eh, it sounded to me like it might be more of a Shelbyville thing.

Why is this a BAD thing?

The goal of cryptocurrency is to have a financial system with none of that pesky government regulation.

Yes, there will be scams but eventually people will learn non-governmental solutions that (my libertarian friends tell me) will be net better than government regulations.

“Bug closed/works as intended.”

> The goal of cryptocurrency is to have a financial system with none of that pesky government regulation.

Except it's just a speculative asset, not an actual financial system, unless you count its use by criminal elements to actually transfer funds.

Ledgers can't scale to allow for a financial system that could serve an entire country either, due to transaction speed issues.

I think there's some good ideas involved - a financial system not under the control of a government, but the current implementation of everything crypto is failing at everything other than financial speculation.

There is nothing stopping people from using it as peer-to-peer cash.

I used crypto sell a GPU to someone I know. I regularly use it to trade hardware over the internet, and I would use it more if more vendors on ebay and such accepted it.

It has low fees, works with open source software, and is pretty straightforward to accept without fear of charge-backs or fraud. The volatility is only a problem in the short term, and I don't mind holding on to crypto despite volatility because it has a lower inflation rate than the USD.

>Ledgers can't scale to allow for a financial system that could serve an entire country either, due to transaction speed issues.

A lot of the issues with transaction throughput have to do with the network parameters of old cryptocurrencies like bitcoin which were optimized for a 2009 internet.

A single ledger can't scale, but if you just boosted the block size of a bitcoin-like cryptocurrency to ~200MB you would have transaction throughput on the order of paypal. If you do payment channels on top of that and/or have atomic swaps between multiple merge-mined ledgers I think that you would have a decentralized payment network which could serve the entire world's current needs, at least for online transactions.

What a moron. This explains why private equity is so successful. Small town businesses are good businesses but they’re often run by morons who inherited their stuff. Once you buy them out you can drive costs down and be efficient and just not send your money to Nigerian princes.

Seems to me private equity is often, though not always, a terrific way to run a previously-stable business into the ground in short order. See for example https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3423290 .

Private equity is successful because there's a lot of money to be made in strategies most people would find unconscionable (even if not illegal), not because it makes better decisions than the worst 5% of business owners.

A well run company that's owned by PE. That's an oxymoron.

PE typically raises prices. Replaces all good employees with the cheapest. Then runs up debt that they have no intention of paying back all under the guise of expansion.

Cryptocurrency is so completely run-through with scams, top to bottom, that frankly it needs to become a criminal violation of fiduciary duty to go anywhere near it if you are managing other people's money (and they have not explicitly consented to invest in crypto stuff). Do you manage a bank, and you touch crypto? Arrested. Do you manage a pension fund, and you touch crypto? Arrested. Are you in charge of a trust, or in some other way a caretaker of someone else's money, and you touch crypto? Arrested.

This needs to be done loudly and often to make it very clear to everyone involved in the business of managing others' money that they should treat everything even remotely cryptocurrency-related as radioactive.

First, I agree with you. Dealing in nearly all crypto-currencies is financially irresponsible whether it's your own money or other people's.

That said, perhaps Hanes would have been duped by an similar non-crypto scam. It seems that all he needed was some online contacts and a fake web page with numbers on it.

Ultimately, it wasn't the crypto that was the problem. The problem was that he stole other people's money. He didn't mismanage it; he stole it.

But if it wasn't crypto, it's much more likely they would have been able to track down and prosecute the scammers, and claw the money back.

so true.

which is why crypto increases the lucrativeness of scammers.

Fun fact: north korea is dabbling very much in crypto hacks , north korea is possible for so many of crypto hacks. (not scams though , but who knows ? )

So true.

Generally speaking cryptocurrencies are a scam for the purpose of sending currencies because their prices fluctuate.

They can't be an investment because they are a speculation.

They can't be a speculation because even before doing the speculation like gambling , you would most likely be scammed.

Its a scam.

And this is me after I have created something on top of Nano cryptocurrency just recently. Though I did with 0.000001 nano which I got from some one time captcha. Basically nanotimestamps.org (still not created the website because I am so lazy and I have only done it with the server client model , not sure how can I do with real people funds and without a server / wasm in client) where it creates blockchaine-d timestamps which you can verify. I have created another where you can store data on the nano blockchain by routing some transactions (like 3-4) (but you don't lose any nano 0 nano lost in process , inefficient can work for only 3-4 characters) I have created another where you can store data on the nano blockchain by losing 10^-30 that is the lowest point of nano , something which you get a lot of , even from a free faucet that you don't have to do another captcha again and it moves it up to 32 characters)

I think this is the purpose of blockchain and this and this only. I don't want to create / work on this because I feel that just because I am writing this on nano , people are going to get all hyped up on nano and I buy it and indirectly I become part of some scam.

I am okay with if a cryptocurrency is equal to so people don't buy more than 1$ but for anything more , I genuinely wonder.

Also I think I like the concept of monero from the process of anonymous transactions and that only. But still I won't treat it as a store purpose but rather temporary.

I hope that these stay stable and scams go away.

I have 0.000002 nano that I got by doing two captchas and I won't ever "invest" in crypto , only if I want to buy something anonymously or sell it , will I ever use monero and that too I would mine it myself,

I would invest only & only in index funds.

If you are going to mine monero, try p2pool. It is better for the decentralization of the network, is capable of even smaller payouts and has no fees.

This didn't have anything to do with cryptocurrency at all. It sounds like the "victim" never even touched an actual blockchain. He was induced to send money to to a scammer, using the traditional banking system.

Read the text, he transferred the money to Kraken, presumably to buy cryptocurrency that he then sent to the scammers.

My mistake. I had assumed that the first exchange was also a fake website put together by the scammers with no crypto behind it.

According to the article, he first sent the money to Kraken to presumably purchase cryptocurrency there and was later convinced to move the cryptocurrency to a different Hong Kong based platform. The supposed platform in Hong Kong may have just been a front though.

Not true at all. The reason that these scams have become a larger industry than the entire world-wide illegal drug trade is because of how easy and lucrative they are, and that's entirely on cryptocurrency.

By revenue, cryptocurrency is for crime. The couple of anecdotes about someone getting money out of Venezuela with crypto only help to legitimize a wealth transfer to criminals of historic proportions.

We both wish, the president of america is running a crypto-scam.

Half scam, half money laundering for favor

Crypto seems to be purpose built to enable laundering of massive amounts of money under the guise of a bad investment.

I opened a new bank account recently

I had to make several promises that I would not let crypto currency anywhere near it

I have bank accounts and crypto and most of the banks don't want to deal with crypto or money that has come from crypto, or are very wary.

And the whole thing is propped up by dubios financial engineering by the likes of Tether and Microstrategy who are complicit with the sketchy exchanges.

ETH is the stock market of the 1920's. Rugpulls and blatant pyramid schemes everywhere you turn.

thanks

(detached from https://news.ycombinator.com/item?id=43116685 so I can pin the latter to the top. nothing wrong with saying thanks of course!)

Please don't do this here.