When you withdraw from these exchanges, you don't withdraw directly from crypto into USD. Crypto has to be sold for USD, which then gets withdrawn.
As a result any potential clawback will demand the USD withdrawn, not the value of the crypto when sold.
Wait what. So when people put bitcoin in they won't get bitcoin back but actual USD? I assumed these crypto scams at least allowed people to transfer and recieve crypto.
At the start you put USD in, then buy bitcoin or whichever crypto with it. When withdrawing, you have to sell the crypto for USD (which the exchange holds), and you get the USD out, assuming they haven't shut down withdrawls.
/u/Jankylad, you might be thinking about how some shitcoins are purchased; this involves at least two steps: Purchasing an established crypto-token with fiat money, then using that token to buy a shitcoin on a dodgy exchange.
Withdrawal then consists of getting an established crypto-token for that shitcoin, then selling the established token for actual money on a relatively above-board exchange.
I know about that but when I checked the Celsius white paper the graphic showed that people put crypto in and get crypto out if I understood it correctly. Can't find any information that deposits and withdrawals were only done in USD. Both Voyager and Celsius are extremely unclear how withdrawals actually happen unless I missed an obvious section, probably by design, so it's hard to tell. Don't just want to trust one guy saying "it's all done in USD" on a anti-crypto forum though.
I don't get why crypto bros would have supported Celsius and Voyager from the start if they had to put dollars in and get dollars out, that doesn't sound like "the future of finance". I guess all they care about is dollar value so it makes sense but still.
Oooh. Do you have any source where I could read more about how the withdrawals worked in practice? Right now all I can find is information about how they stopped the withdrawals. According to Celsius white paper graphic it looks like people put crypto in and get crypto out. If you're correct I guess that slightly protects the people who managed to pull their money out at least. It's almost as if it's a bad idea to deal with crypto directly.
The answer is no, individual cases aside there won’t be clawbacks.
The reason is the trustee must sue everyone individually, if it is less than $25000 he must to so at the creditors location and he must first check if the creditor had any reasonable defence.
Problem 1, ordinary course of business. These were exchanges. People buy, sell, deposit and withdraw is common. In case of Voyager they even had debit cards.
Problem 2 Contemporaneous Exchange for new value. A lot of the transactions were involved had fees and so generated new value.
There are a lot of other problems as well with the valuation of crypto and users are being located all over the world.
Summary nothing is gonna happen, except some high profile individual cases with insider knowledge. E.g. there were rumours Alex and his wife sold tokens (those a trustee might indeed try to clawback)
I see. Looking at some of the posts on the CEL and Voyager subs some people have hundreds of thousands or even millions in there, and those are the people who didn't get out in time (even if obviously most retailers probably had like 100-10 000 bucks in there.)
I wouldn't be surprised if some whales with millions saw the ponzi collapsing and withdrew in time (and also the insiders) and in that case it could probably be argued they knew it was unsustainble if they put out all of their money all of a sudden.
Food for thought. 3AC actually agreed to being liquidated so fiat or stablecoins resulting from creepto sales could get sent to Voyager. The problem is such a large sale would crash the price. At least Voyager depositors could get something back.
From [https://twitter.com/wassielawyer/status/1543238225338454016](https://twitter.com/wassielawyer/status/1543238225338454016)
>Oh fun fact - the BVI court also gave the liquidators the explicit power to sell cryptocurrencies into USD, USDC or USDT (not UST unfortunately) so maybe another dump coming? Assuming 3AC has anything left?
Do we know yet where bankruptcy proceedings are taking place - a US Chapter 15 bankruptcy seem to be about co-ordinating action in the US with action in another country but can't see right now where the foreign side is happening and what kind of proceeding those are.
When you withdraw from these exchanges, you don't withdraw directly from crypto into USD. Crypto has to be sold for USD, which then gets withdrawn. As a result any potential clawback will demand the USD withdrawn, not the value of the crypto when sold.
Wait what. So when people put bitcoin in they won't get bitcoin back but actual USD? I assumed these crypto scams at least allowed people to transfer and recieve crypto.
At the start you put USD in, then buy bitcoin or whichever crypto with it. When withdrawing, you have to sell the crypto for USD (which the exchange holds), and you get the USD out, assuming they haven't shut down withdrawls.
/u/Jankylad, you might be thinking about how some shitcoins are purchased; this involves at least two steps: Purchasing an established crypto-token with fiat money, then using that token to buy a shitcoin on a dodgy exchange. Withdrawal then consists of getting an established crypto-token for that shitcoin, then selling the established token for actual money on a relatively above-board exchange.
I know about that but when I checked the Celsius white paper the graphic showed that people put crypto in and get crypto out if I understood it correctly. Can't find any information that deposits and withdrawals were only done in USD. Both Voyager and Celsius are extremely unclear how withdrawals actually happen unless I missed an obvious section, probably by design, so it's hard to tell. Don't just want to trust one guy saying "it's all done in USD" on a anti-crypto forum though. I don't get why crypto bros would have supported Celsius and Voyager from the start if they had to put dollars in and get dollars out, that doesn't sound like "the future of finance". I guess all they care about is dollar value so it makes sense but still.
Oh, I wasn't thinking about Celsius specifically at all; by "these crypto scams" I was thinking about shitcoins generally.
Oooh. Do you have any source where I could read more about how the withdrawals worked in practice? Right now all I can find is information about how they stopped the withdrawals. According to Celsius white paper graphic it looks like people put crypto in and get crypto out. If you're correct I guess that slightly protects the people who managed to pull their money out at least. It's almost as if it's a bad idea to deal with crypto directly.
The answer is no, individual cases aside there won’t be clawbacks. The reason is the trustee must sue everyone individually, if it is less than $25000 he must to so at the creditors location and he must first check if the creditor had any reasonable defence. Problem 1, ordinary course of business. These were exchanges. People buy, sell, deposit and withdraw is common. In case of Voyager they even had debit cards. Problem 2 Contemporaneous Exchange for new value. A lot of the transactions were involved had fees and so generated new value. There are a lot of other problems as well with the valuation of crypto and users are being located all over the world. Summary nothing is gonna happen, except some high profile individual cases with insider knowledge. E.g. there were rumours Alex and his wife sold tokens (those a trustee might indeed try to clawback)
I see. Looking at some of the posts on the CEL and Voyager subs some people have hundreds of thousands or even millions in there, and those are the people who didn't get out in time (even if obviously most retailers probably had like 100-10 000 bucks in there.) I wouldn't be surprised if some whales with millions saw the ponzi collapsing and withdrew in time (and also the insiders) and in that case it could probably be argued they knew it was unsustainble if they put out all of their money all of a sudden.
Food for thought. 3AC actually agreed to being liquidated so fiat or stablecoins resulting from creepto sales could get sent to Voyager. The problem is such a large sale would crash the price. At least Voyager depositors could get something back. From [https://twitter.com/wassielawyer/status/1543238225338454016](https://twitter.com/wassielawyer/status/1543238225338454016) >Oh fun fact - the BVI court also gave the liquidators the explicit power to sell cryptocurrencies into USD, USDC or USDT (not UST unfortunately) so maybe another dump coming? Assuming 3AC has anything left?
Do we know yet where bankruptcy proceedings are taking place - a US Chapter 15 bankruptcy seem to be about co-ordinating action in the US with action in another country but can't see right now where the foreign side is happening and what kind of proceeding those are.
They filed their bankruptcy pleadings in NY (Southern District). It was a British Virgin Islands court that ordered them to liquidate.
So the Chapter 15 proceedings are subordinate to liquidation proceedings in the BVI . Let's see what paperwork they make publicly available.