Hello, good morning, happy Friday. It is incredibly cold in Chicago! Like “yesterday as I was walking to the train I felt my nostrils frosting” cold. It’s supposed to snow today. I hope it waits to do that until I get home.
The new Ranked Season of League of Legends has started, and I need to get my placement games in. I’ll probably stream them this weekend! I also have some Minecraft stuff I want to work on - some projects for my server, and some community projects.
Next Friday I am going to this, the last beer nerd event of the season by my favorite brewery. I am very excited.
The smelly smell that smells smelly
Please try to guess what this whole situation is about, I bet you can’t:
Okay, here is the link.
According to the Globe, City Attorney Ray O'Dea will also be tasked with writing an ordinance regulating the use of the device. Bessemer expects George Beninghaus, the city's code enforcement officer, to be the one who is trained on the Nasal Ranger.
It’s called the nasal ranger?! Really? Sure, fine.
I’m sure this is a totally rational and efficient use of public funds, and that there are no other issues or equipment the money could have gone towards, and that there is no better way to resolve issues within a community than using an expensive nose gun.
Poppin’ off
Let’s all enjoy this:
The above gif is an endlessly looping depiction of “champagnegate,” which happened on The Bachelor this week and which approximately everyone on Twitter got very excited about. Here are some tweets, this one is my favorite, I love cows:
I felt super awful for Kelsey as this was happening, even though it was also very funny. She had a whole plan! The producers did her dirty! And then of course they filmed her being upset about it. But the night worked out for her, and she seems to be in good spirits about the whole thing now, so all’s well that ends well.
This season is supposed to be “the most dramatic” - pay no attention to the fact that every season is “the most dramatic” - so we can look forward to even more zany hijinks throughout the weeks to come. Hopefully they, too, will make good gifs.
Sleight of crypto
What happens when you invest in cryptocurrency? You hold an asset that fluctuates in value. Maybe you trade it for goods or services, probably you sell it later.
What happens when you invest in cryptocurrency, hold that money on an exchange that is notorious for running into legal trouble, lend it out to others for margin trading, and those people you gave it to for trading… don’t pay it back?
Well, nothing, probably:
To date poloniex have returned 10% of the amount they took from me. I've attempted to email a few times but have only ever been told that: "Currently we’re pursuing the defaulted borrowers to get them to repay the BTC they owe to lenders. As we recover funds, we will return them to affected lenders. We’re also exploring other ways to help defray margin lender losses and will continue to communicate with impacted lenders on the status of these efforts."
Whether you lend $10 to your best friend or to a stranger on the internet, you are risking that you never see the $10 again. Your friend might defray the risk of that investment by offering you the same deal in the future (a short-term $10 loan with no interest), or buying you a coffee, or just, you know, continuing to be your friend. And the loan is guaranteed to the extent that your friendship is worth more than $10, and if they don’t ever pay you back, probably they will feel guilty and you will be a little bit upset and it will strain your friendship, and a healthy friendship with you is worth more than $10. If you’re thinking of someone and that description doesn’t apply to them, maybe you shouldn’t lend them $10? There are other ways to guarantee the loan, or maybe you don’t care, but you get the point.
But what could happen if you lend, say, a few thousand dollars to strangers on the internet? And you do so in a communal pool, like the one Poloniex runs? Problems, of course:
On May 26, altcoin $CLAM collapsed more than two thirds of its value during the day, resulting in the margin lending pool incurring a more than $13 million USD loss in today's price of bitcoin. Now, Poloniex is tapping into 1,800 BTC from the principal of active BTC margin loans to cover the loss to the lending pool. In margin trading, exchanges and traders can lend crypto at an interest rate for borrowers to trade, hopefully at a gain. Users have to pay back what they are lent. When a borrower is unable to pay back the loan, they default, losing money they didn’t have to begin with.
Some trading CLAM, a coin with low liquidity, began to default on their loans as the value of the coin dropped, making them unable to pay since their assets were now worth far less than when they borrowed.
Worse, many of those who defaulted had used CLAM for collateral on the loans, the amount put up to safeguard against an extreme loss for the lender, like a deposit. Since the coin had reached such a low value, that collateral became nearly worthless as well. While Poloniex said it is uncommon for traders to use CLAM as collateral, non U.S. traders can do so with any asset available for lending.
Right. If the people you gave money to default, you don’t get the money back, that’s usually how it works. You need some kind of collateral (like friendship) to be able to say to someone, “look, I let you borrow my money, but if you don’t pay it back there will be consequences.” The consequence for the defaulting borrower(s), presumably, is that they don’t get to use Poloniex anymore. But should the lenders incur the risk if Poloniex is 1) the platform for the trades and 2) socializing that risk?
“Any crypto exchange that socializes losses is begging for a lawsuit,” said David Silver, an attorney specializing in securities law.
A former crypto exchange executive said it depends on how one defines "legal," since lending is state-regulated unless you have a federal license.
To be clear, the firm said it only offers margin lending and borrowing to non-US customers.
The firm said it is “exploring other ways to help defray margin lender losses, and, as we recover funds, will return them to affected lenders."
The Block did not find a clear term in Poloniex’s terms of service indicating a precedent for socializing a loss, and Poloniex did not directly respond to the question in an email interview, but said the 16% figure was proportional to the amount of losses in the lending pool. Regardless, Silver said it would be unlikely for a court to allow an exchange to socialize a loss even with a term of service stated.
The “only offering margin lending and borrowing to non-US customers” is significant, but I doubt that international regulators will be any happier about this situation than the SEC would be - or is, because you can of course imagine that some US-based customers managed to sneak their way into that market.
Personally, I am most intrigued by this apparently not being authorized by Poloniex’s Terms of Service. You can probably bring a civil lawsuit in a lot of countries for violating various securities-related regulations, but breach of contract claims are far more common, and my guess is that they would be easier for a jury to understand, too.
And what did Poloniex do to make sure this wouldn’t happen again? It froze a few markets:
It removed BTS, CLAM, FCT and MAID citing a lack of liquidity in these markets. A liquidity problem led to the CLAM crash, since traders couldn’t liquidate their positions fast enough to get out from under the falling value. Poloniex said it would continue to monitor the coins and could reinstate them in the future.
The exchange has also added additional layers to monitor markets so it can disable problematic assets. It also plans to add more market protections to prevent price slippage and over-concentration, including the NICE/Actimize tool which was implemented on June 1.
That seems about right. It’s not like Poloniex promised margin lenders that their lending was insured or anything, that part of the transaction was pretty standard! The weirdness here was 1) that it was crypto-based (which is not that weird) and 2) that the lending was socialized across a pool, and that the losses were similarly socialized, without (as far as I can tell) any clear indication that the lenders consented to that specific arrangement.
Now, look at me. I’m holding your cryptocurrency, right? With a wave of my hand, it will… disappear!
A miserable little band of thugs
This is a teaser for Westworld season 3:
I think it’s pretty clever that they timed season 3 to start on the Ides of March. I can’t wait, it’s going to be so good. I know that season 2 got mixed reviews, but I loved it. If you haven’t watched it since it aired, maybe go back and watch it again! In my opinion, hindsight makes the plot much better.
Fair play and substantial justice
(e) Construing Pleadings. Pleadings must be construed so as to do justice.
Bad news, this section is about some stuff that I do not think “does justice,” because sometimes courts do things that a lot of people do not consider to be justice.
Really, I think this is awful:
Because, if nothing else:
I cannot think of a good reason for the Fifth Circuit to have done this. I find it to be cruel with no particular reason; if the Court was concerned that the defendant were attempting to change her name to avoid debts or liabilities or whatever else, there are ways to prevent those consequences from following the name change. Or you could deny the name change and allow the pronoun use, whatever. Instead, the Court took what seems to be the most aggressive position and forbade lower judges from recognizing name changes. The opinion is full of transphobic utterances (like intentionally using he/his pronouns to refer to Kathrine, over and over); the Court spent 10 pages opining that being respectful of pronouns is simply too difficult. I don’t even want to quote any of it - it’s extremely upsetting. The Court’s position that this is too difficult is, again, disingenuous:
The dissent just knocks the issue out of the park:
Dignity. Justice. Respect. These concepts are fundamental pillars of the legal system in the United States; the laws are ultimately just codified social norms that we have all agreed to abide by, and an undermined respect for the rule of law is deleterious to the stability of the judicial system and the country at large. When judges analyze complicated issues like federal jurisdiction on a daily basis as a matter of course and then turn around and say using each individual’s correct pronouns is just too difficult? And then to, rather than affirming the District Court’s denial of Kathrine’s motion and getting on with it, forbid any district judge from considering the issue in the future? Come on. As the dissent explains, Kathrine’s motion to the Fifth Circuit is a request to refer to her with she/her pronouns during the appellate proceedings. Again, this is a simple matter of dignity. Kathrine deserves respect, it’s easy to give her that respect, you should give her that respect. And this very obviously shows the disdain the Fifth Circuit has for trans and nonbinary attorneys in front of it, too - not just clients! If you are going to be discriminatory - or perhaps even just disrespectful, you should at least be honest about why.
Ultimately, the majority creates a controversy where there is none by misinterpreting Varner’s motion as requesting “at a minimum, to require the district court and the government to refer to Varner with female instead of male pronouns,” when she in fact simply requests that this court address her using female pronouns while deciding her appeal. The majority then issues an advisory opinion on the way it would answer the hypothetical questions that only it has raised. Such an advisory opinion is inappropriate, unnecessary, and beyond the purview of federal courts.
This is not justice.
Hey have you seen The Witcher yet? Me neither. And yet:
What I aim to provide with this newsletter is content. This is certainly some content.
Lt. Aldo Raine would be proud
This is, partially, a follow-up on last week’s bit about Nazis from Nick Martin. He reported on The Base threatening a Michigan family in a case of mistaken identity, and now that same group has had some members arrested:
Good, fuck ‘em.
Blink and you’ll miss it
This last week saw the conclusion of Awesome Games Done Quick, an annual speedrunning extravaganza. A kind internet person compiled a list of some of the coolest runs over on r/Games, including a run where two players shared one controller and completed Mike Tyson’s Punch-out in 25 minutes. Also, they were blindfolded.
Games Done Quick, by the way, has a huge focus on raising money for charity. Click here to donate if you appreciate what they do - this year’s beneficiary is the Prevent Cancer Foundation.
Circle, update my profile
Last week my friend Max got me into this ridiculous new Netflix show called The Circle. I hear it’s based on a UK show of the same name. All 12 episodes have released now, so you can watch the whole thing in one sitting, and I am happy about who won.
I wanted to hate this show at first. It seems absurd - it is absurd - but after a few episodes I was completely hooked. It’s both endearing and fascinating, the design of the underlying game is quite clever, and the contestants are quite likable. Mostly.
I don’t want to spoil the show - I think you should watch it - but I want to say briefly that the concept of a competitive game show where the contestants don’t meet each other during the competition is just… bizarre! The premise is that they all use this fake social media network that they control with their voices, and of course the voice control is just the producers listening to the contestants’ microphones and someone clicking on a powerpoint or another app of some sort, not an actual computer program doing everything automatically. The other premise is that power in the game is a function of an individual’s popularity with the other contestants. I know it sounds unwatchably bad, but I promise, it is enthralling.
What a week. I am very much looking forward to the weekend - I hope you all have a good one, too. See you next Friday.