Crypto Platform That Mistakenly Gave $90M to Its Users Asks Them To Please Give It Back (coindesk.com) 76
Bleeping Computer has an update on the unique predicament of Compound, "an Ethereum-based money market protocol that enables users to earn interest or borrow assets against collateral." (Which "Due to an erroneous upgrade process, the decentralized finance platform ended up spilling out Ethereum assets worth $90 million to its users...")
Compound's founder Robert Leshner urged users who received these Compound tokens in error to return the assets to the platform's Timelock contract. To incentivize users, Leshner stated that for their "white-hat" behaviour they may keep 10% as a reward. "Otherwise, it's being reported as income to the IRS, and most of you are doxxed," threatened the founder in the same tweet... Realizing that the original wording of his tweet may not have sat well with many, Leshner revised his tone:
"I'm trying to do anything I can to help the community get some of its COMP back, and this was a bone-headed tweet / approach. That's on me," said Leshner. "Luckily, the community is much bigger, and smarter, than just me. I appreciate your ridicule and support...."
Because the Compound protocol requires a seven-day governance process before any production changes can be made, Compound's only option at this time is to wait on users, hoping they will return the assets.
CoinDesk reported Friday afternoon that "So far, two users have returned a total of 37,493 COMP tokens worth over $12 million at the time of writing." But on Saturday Leshner was tweeting out more thank-you's to additional white-hat users "returning COMP to the community." In an interview with CoinDesk, Leshner said the moral dilemma can be split roughly into two camps. "There's a lot of members of the community that view protocols like Compound as benefitting the entire ecosystem," he said. "And there are some users that don't necessarily care. The builder mindset is, 'This adds value, this is crucially important,' and the trader mindset is 'Money is money,' and that's the only ethos of crypto."
He went on: "I'm personally hopeful users will return funds to the community. It's not my property, it's not their property, it's the community's property...."
One suggestion from Twitter? "The first 5 people to return COMP get 1/5 pieces of Leshner NFT that can be combined Exodia style to summon Robert in real life." "This idea is crazy, and I'm in," Leshner tweeted, adding later that "Anyone who returns COMP to the community is an alien giga-chad; and if a squad of alien giga-chads ever summon me, I will appear."
Leshner told CoinDesk: "I want to hear other people's views on this, because it's not my decision," he said. "This is a decision every user has to make themselves, and I think most of them are taking the view of, 'Haha, f**k you guys, it's your problem.'"
"I'm trying to do anything I can to help the community get some of its COMP back, and this was a bone-headed tweet / approach. That's on me," said Leshner. "Luckily, the community is much bigger, and smarter, than just me. I appreciate your ridicule and support...."
Because the Compound protocol requires a seven-day governance process before any production changes can be made, Compound's only option at this time is to wait on users, hoping they will return the assets.
CoinDesk reported Friday afternoon that "So far, two users have returned a total of 37,493 COMP tokens worth over $12 million at the time of writing." But on Saturday Leshner was tweeting out more thank-you's to additional white-hat users "returning COMP to the community." In an interview with CoinDesk, Leshner said the moral dilemma can be split roughly into two camps. "There's a lot of members of the community that view protocols like Compound as benefitting the entire ecosystem," he said. "And there are some users that don't necessarily care. The builder mindset is, 'This adds value, this is crucially important,' and the trader mindset is 'Money is money,' and that's the only ethos of crypto."
He went on: "I'm personally hopeful users will return funds to the community. It's not my property, it's not their property, it's the community's property...."
One suggestion from Twitter? "The first 5 people to return COMP get 1/5 pieces of Leshner NFT that can be combined Exodia style to summon Robert in real life." "This idea is crazy, and I'm in," Leshner tweeted, adding later that "Anyone who returns COMP to the community is an alien giga-chad; and if a squad of alien giga-chads ever summon me, I will appear."
Leshner told CoinDesk: "I want to hear other people's views on this, because it's not my decision," he said. "This is a decision every user has to make themselves, and I think most of them are taking the view of, 'Haha, f**k you guys, it's your problem.'"
yeah right (Score:2)
And how many of these hapless "users" happened to be Compound employees and co-conspirators?
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Cryptocurrency is a money laundering SCAM.
Why does anyone continue to give it any credence?
Re: yeah right (Score:3)
Because it's all exists on 'pooters!
Re: yeah right (Score:2, Troll)
Seriously, crypto is a colossal waste. It's very bad for the enviroment, causes scarcity in GPU supplies for people who want to use GPUs for what they were intended for, and it crossed over the line into cartoon-land (proposed) methods of production and sustainment. (dedicated nuclear reactors- seriously?).
People will look back and vomit in disgust at the sheer level of human stupidity crypto represents.
Re: yeah right (Score:2)
Also, I was wondering how the nuclear bitcoiners were planning to get the reactors, and more importantly the fuel and even more importantly the *security* to guard their installation from all kinds of bad groups who would love to take it from them to use it as a dirty bomb. And what makes them think they would be trusted with the fuel in the first place given crypto's very checkered recent history?
Do the math (Score:4, Insightful)
a) Compound takes 90%.
b) IRS takes, what, 30%?
Option (b) please.
If they could do simple math (Score:2)
They wouldn't do "DEFI".
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b) IRS takes, what, 30%, plus, what, a thorough investigation in the rest of your portfolio?
Fixed that for you.
Disclaimer: I do not own cryptocurrency, but I had dealings with my country's IRS. If they have to spend a few 1000 euros in wages and other resources to deprive you of a mere 100 euros due to a fault not of your own making, they hapily do so.
Re: (Score:2, Interesting)
You're making some interesting and very misfounded assumptions about the IRS having the resources to perform a thorough investigation.
Thanks to a concerted, long-term effort by certain politicians, the IRS budget has been continuously whittled away. In 2010, the IRS had 13,879 revenue agents who dealt with around 230 million returns. In 2020, they were down to 8,526 agents trying to handle around 253 million returns. In 2020, only 533 cases of tax crimes were prosecuted; the lowest number ever recorded.
A
Re:Do the math (Score:4, Informative)
You're making some interesting and very misfounded assumptions about the IRS having the resources to perform a thorough investigation.
They do, just not to everyone. But if your number comes up, that's no consolation. Also note that they are explicitly targeting poorer people more because it costs them too much to go after wealthy people.
Re: Do the math (Score:2)
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If you've been honestly reporting income over the period of investigation, then there's no problem.
Sure, no problem if you've been storing and sorting a bunch of documents you never thought you would need again unless you're wealthy.
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You only need to keep your records for 8 years.
And the only documents you have to keep are your pay stubs, your tax assessment for the year, and copies of anything you decided to declare as a deduction. If you don't have a folder for keeping such records, you are asking for trouble.... even if you never did anything wrong.
I have been audited before. It's no a big deal.
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Why should I have to keep my pay stubs? I'm keeping them right now because I'm underpaid, but that information is reported regularly to the government. They shouldn't need to me to provide pieces of paper to back up the data, the incompetent fucks.
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I get why I will keep my pay stubs, but it's dumb that I should have to in the first place. the IRS ought to be empowered to start at the top and work their way down, and tasked with the same.
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It's dumb that you should have to in the same way that needing your signature to authorize a contract is dumb.
That is, it provides a layer of accountability and verification in a world where you cannot always discern if a person is telling the truth.
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It's dumb that you should have to in the same way that needing your signature to authorize a contract is dumb.
No, that's an extra dumb. It's not like signatures can't be faked.
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They have enough employees to scrutinize and delay my return every year, then give me bigger returns without explanation.
I follow their published rules very carefully, I didn't actually make any mistakes for them to "correct."
They're completely incompetent.
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It's my understanding that even if you have never done anything wrong, there's about a one in two chance that you will have a tax audit for at least one tax year at some point in your lifetime. Myself, I've more than met those odds by actually getting audited more than once, despite never having done anything wrong and always honestly declaring all of my income.
I still had my records for the year they were
Re: Do the math (Score:2)
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There's a big difference between Catholics who believe you can pay your way into heaven with all your sins washed away and other people giving their hard-earned money to The Man for nothing in return.
(Nothing apart from the aqueduct, obviously... https://www.youtube.com/watch?... [youtube.com] )
Re: Do the math (Score:2)
Long time lapsed Catholic. I know of no one who did the 10% thing. My mother used the number 10 alright: 10$ per week. Thatâ(TM)s it. I donâ(TM)t think she was unique. I always thought the 10% thing was more a Protestant/evangelical expectation.
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Take your paycheck, move the decimal point to the left one space. Thats how much you should pay.
On average, American Catholics donate 1.2% of their income to the church, so 12% compliance.
The IRS does not have any problem collecting taxes from paychecks. That is W2 income. The avoidance/evasion happens elsewhere: Cash income, self-employment, expensing, capital gains, false invoicing, jurisdiction shifting, etc.
My spouse has her own business and I do her taxes. I pick a bottom-line number that is low but reasonable and then work backward from there while fiddling with the numbers until everything
Re: Do the math (Score:2)
Weird that nobody has corrected your math yet:
a) They take 90% or
b) Govt takes as low as 37% or as high as 49.3%. (This depends if you live in a state with no state income tax, or if you live in CalifornIa. Oh, I guess you totally forgot to factor in state tax??? Yes, the govt can literally tax you 50% of income of its a large amount. Excited about retirement account planning yet?)
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Oh, I guess you totally forgot to factor in state tax???
And I guess that you forgot there's more than one country in the world?
Gifts are taxable to the giver. This isn't a gift (Score:2)
Yes, gifts over $10,000 must be reported by the giver. There is an extra tax on gifts over $15,000.
A gift is a transfer motivated by "detached and disinterested generosity". This isn't a gift. They didn't transfer this property in order to be generous.
Re: Do the math (Score:3)
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a) Compound takes 90%. b) IRS takes, what, 30%?
Also he's threatening to report you to the IRS if you take option B but won't report you to the IRS if you take option A?
Bad week (Score:5, Interesting)
That's $180M with the other $90M that were mistakenly given to the users on Friday [slashdot.org].
Re:Bad week (Score:5, Funny)
Slashdot posts story twice, asks users to give one back.
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Hahaha!! XD
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Even worse... (Score:2)
Editor David mistakenly posts a.... (Score:2)
Dupe https://tech.slashdot.org/stor... [slashdot.org]
Report to the IRS as income? (Score:4, Funny)
Gladly. The thing about paying a lot of tax is that it means I've had a lot of income. God I wish I were in a position to have a $45m IRS tax bill.
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Re: Report to the IRS as income? (Score:1)
I wish you did too.
Hah! (Score:3)
I appreciate your ridicule and support....
I'm not even a client, and I'll give this guy some money just for saying that.
On another note, we have a live psycho-economic experiment where we find out what percentage (and maybe demographics) of people who don't/choose to return sizable, real-world ill-gotten gains.
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Employee theft is already a "psycho-economic experiment", from the most petty (taking home office supplies) to downright loading up the car with some of the inventory. Hey they're big names, no one will notice. To lying on insurance forms to get more money, and not declaring all one's income to the IRS. Really one doesn't need this situation to know people, just decades of observation.
I had the same experience (Score:5, Funny)
Re:I had the same experience (Score:4, Insightful)
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Then by that logic he should be getting ALL of it back, right?
And i keep getting told... (Score:5, Insightful)
...how non-reversible transactions are actually good for cryptocurrencies.
Be careful what you wish for.
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non reversible transactions are one of the reasons why I think crypto currencies will never work as currencies. This happens often that people put the wrong account numbers, that they put the wrong amount. Having a bank that can reverse transactions, or apply pressure to get the money coming back from an other bank is a good thing.
Implementing court decisions are also fairly easy even if the person does not want to comply or is incapable to comply. When someone is incapacitated, courts can still provide acc
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I much prefer this non-reversible version, where no one goes to jail for something that's not their problem. Compound made the error, now Compound has to pay. That's the correct way for this to be handled. So, yeah, non-reversible transactions were def
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You're describing stealing. Mistakes happen, which is why legislation covers these situations.
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In most of the developed world, the US included, yes, it is very illegal to try keep erroneous deposits from your bank, employer or whoever else. If you do so, expect criminal charges - it is, quite literally, stealing. This is not like finding a few coins on the curbside.
Re: And i keep getting told... (Score:2)
LMAO Tax me then (Score:2)
From the.... (Score:1)
Did they actuall get anything back? (Score:2)
Monopoly (Score:2)
Most Americans have played the game Monopoly. We all learned as kids, through the game, that a 'Bank error in your favor' is a win and you don't give it back.
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You missed the point where this is not a bank, but a wannabe bank-like thing. And this wannabe bank-like thing has no capability to take the 'money' back.
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Who has the final word? (Score:2)
Who has the final word on who owns what?
If it's the blockchain, there's no such thing as theft, or errors. No one really wants to live fully under that regime, including thieves.
If it's the government, fine, but then the whole blockchain business seems pretty redundant, doesn't it?
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Who has the final word on who owns what?
The person with the private key owns whatever that private key is protecting.
If it's the blockchain, there's no such thing as theft, or errors.
This is nonsense. These things don't magically go away because ... "blockchain!"
No one really wants to live fully under that regime, including thieves.
This is nonsense. Clearly, some people want this.
If it's the government, fine, but then the whole blockchain business seems pretty redundant, doesn't it?
Redundant in what way? The users of cryptocurrencies are famously using those currencies for their lack of government control.
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Is it so hard to understand?
If "the person with the private key owns whatever that private key is protecting", then the thief owns the coins now. If you go crying to the government, "but those coins are mine, he took them without my permission", you're appealing to a different authority than the vaunted mathematical proofs of the blockchain.
Sure they do. When it benefits them. When it doesn't, suddenly they want government's help in getting back what is supposedly "theirs" (ev
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Is it so hard to understand?
Exactly my point. I don't know why you're having so much trouble.
If "the person with the private key owns whatever that private key is protecting", then the thief owns the coins now.
Precisely! You seem to get it now.
If you go crying to the government, "but those coins are mine, he took them without my permission", you're appealing to a different authority than the vaunted mathematical proofs of the blockchain.
Yes, and since, in this instance, no one was crying to the government in the fashion that your straw man suggests, this is nonsense.
Solid evidence lack of regulation is (Score:2)
Whatâ(TM)s the law say? (Score:3)
Gee, it would be nice to have several hundred years of Anglo-American jurisprudence to help out here. Probably something in one of those dusty books that might help out. Oh, you canâ(TM)t use that? Oh well.
Yes, Iâ(TM)m aware of the recent case in traditional finance where the receiving party in a mistake like this was allowed to keep the funds, but I think that was a very specific thing. But even then, you could at least plead your case to someone. Who you gonna plead to on this one? Your mama?
Crypto Community (Score:3)
Gee, I sure would hate to lose my standing in the crypto community. They're all such a wonderful bunch of folks on the other side of a monitor scattered all over the world that I've never met. Such a wonderful people going on and on about freedom and disrupting the world of finance. Such comradery! I'd better send this $million back so I don't lose standing in the community... blows tropical drink out nose laughing on the beach.
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Gee, I sure would hate to lose my standing in the... community. They're all such a wonderful bunch of folks on the other side of a monitor scattered all over the world that I've never met. Such a wonderful people going on and on about freedom and disrupting the world of ... . Such comradery!
Change a few words, and I would've sworn you were talking about the Linux/Open Source community, circa the late 90s.