> Just curious how the dominoes will fall but it does seem like the people that invested in cryptocurrencies underestimated the risks of corruption. It looks like programmable money and clever financial engineering makes embezzling money a lot easier.
There is nothing of these failures that involves the programmable money part. DCG and Grayscale live in the traditional finance world, they are asset managers in traditional finance. Their accounting books are not a public, decentralized, cryptographically verifiable ledger . When you buy a stock of their fund, this is not settled on-chain in any way. If they are fraudulent, it's again the traditional finance controls that are failing.
That's a good point but that's the case with all fraud because the digital tokens have to be converted back into fiat at some point. FTT was created without much oversight because no one had enough experience to properly audit anomalous activity. Presumably someone can trace all the fraudulent FTT transactions because it's all public but it doesn't seem like anyone has actually managed to do that. Everyone knows the money is gone but no one knows how that happened and through which FTT transactions.
There is nothing of these failures that involves the programmable money part. DCG and Grayscale live in the traditional finance world, they are asset managers in traditional finance. Their accounting books are not a public, decentralized, cryptographically verifiable ledger . When you buy a stock of their fund, this is not settled on-chain in any way. If they are fraudulent, it's again the traditional finance controls that are failing.