Topic: Trader buys $36 million of copper and gets painted rocks instead (Read 260 times)

What does an average person need those precious metals in the first place? If you are in the trade of refineries and things that deal with this then it is understandable that you have some involvement, it really depends on the person which one he/she is going to invest in, whether bitcoin or precious metals, it is up to that person. The problem with this one is that it was a planned heist in my opinion because 36 million USD worth of copper is a lot of money and you can't easily move that and replace it with fakes.

Most of that criticism is dishonest at best and ill intended at worst, the reason many think bitcoin has high costs is because the costs of bitcoin are upfront and anyone can see them, but most people never take the time to verify the precious metals they bought are in fact what they think they are, falsifying coins is very easy, counterfeiters can cover coins made of cheap metals with gold and even imitate the feel and sound the coin makes so it is indistinguishable from an original, and when you want to sell because you need the money you realize you bought a counterfeit, this is not a problem with bitcoin and this will be a factor that will play in favour of bitcoin in the future.

Therefore, nowadays many people choose Bitcoin as a safe haven compared to precious metal. because sometimes it has difficulties to distinguish
the real one from the fake. Even myself, it is difficult to distinguish real metals from fake ones. In fact, I once bought gold jewelry from my friend,
then after a few years I was going to sell it, it turned out that I was buying fake gold jewelry. Now with Bitcoin I am more comfortable and safer
to store my wealth, compared to buying precious metal.

This is as absurd, as it is a powerful illustration of why BTC is going to be the store of value around the globe going into the future.

The potential for fraud with precious metals is far too great and the costs of verifying the legitimacy of physical metals is way too high for it to be remotely feasible.

Yet, people criticise BTC for its high transaction fees, which is objectively minuscule when compared to the transportation costs, costs associated with securing your metals, and costs of verification.

That is the worst part 
This is a $36 million trick! So there is nothing that can be done to even appeal to an insurance. It is very interesting because I connected this story to the FFP2 mask scam in Italy where the authorities realized that the CE certification was fake and based on a third-party certificate issued by...guess what? A turkish company.

I do not get how buyer never puts a guy around it constantly, like if you have a 36 million dollar copper, you hire someone to go check it out constantly, even few people so that there is always someone on that in shifts even when others sleep. I do not really get why people let these type of deals go this risky. However scammers are jailed at least that is a good thing, what did they expected? I mean you send someone and there is an end result, you have done a criminal act, and it is obviously there, how did they assume they would get out of jail time? The second you do this you are basically in jail 100% for sure.

Some people were let go because they had nothing to do with this, but 8 people were jailed from 10+ years to at least 5 years, that should be basically worth it if you ask me, if I get 1 million dollars I may spend 5 years in jail for it as well, depends on the jail of course.

True, however as those markets become more popular as people are looking for a hedge against inflation we must be prepared for more frauds to come to happen, fortunately this is not something that we need to worry about in the case of bitcoin as there is no way to counterfeit a bitcoin at all, and when we add that precious metals in their physical form are difficult to store then this means that people may decide to adopt bitcoin instead as almost everyone has a computer or a phone to store their coins.

This could be a really good heist film idea to be honest, just change some nooks and crannies and you can get a good heist film out of this incident. It is pretty bad that the thieves got away with it but I don't think that it will be for far too long because $36 million worth of copper is not something you can easily clean so you can sell it without a hitch, and not to mention that they don't have a lot of ways to hide this kind of thing because any smelting process involving this is going to raise some flags.

Unprecedented. Just wondering. If I decide to invest in Tether gold, will it represent real gold or painted stones too.

Why he need real metal for trading? There are a lot of derivatives instead

what you dont realise is while the physical copper might be being transported from a smelting facility to a secure store warehouse at a port
that copper has been passing through a dozen 'options' contracts by wall street day traders.
they are signing over digital ownership. and as long as they dont hold their contracts for too long they dont have to get delivery.

take last year. the oil contracts. wall street was trading them. then demand dropped from actual oil refineries due to covid.
so wall street had no one to sell the contract to.. meaning the oil would have been shipped to wall street and flood the trading floor in oily tar..
so to avoid accepting delivery they panic sold all their contracts to literally anyone willing to take delivery.

now if there was no dip in traders. they could have happily kept trading back and fourth. and the oil would have sat there for longer.

the reason why copper sat there for so long was it was being traded non stop for months.. without being sold to an industry that had physical need.
but when the contracts finally passed to a industry that wanted copper physically. they found the copper had been smuggled and swaped for rock. while at the port.

digital credit or proper credit would not have changed a thing
the problem is that goods should be mined and sold direct to end user industry. not locked in ports for months while its left to be digitally traded on markets

People have always been prone to dishonest enrichment. Somewhere more often, somewhere less often, somewhere stupid and somewhere cunning and clever. Neither the level of life, nor faith, nor religion, nor gender do not interfere with the realization of these plans. It has been and always will be. The only way is to instill respect for private property, and create conditions when a person understands that it is illegal to do this and that he will be punished for it. Of course, high-tech solutions will help reduce such risks and increase disclosure, but it will not work to reduce to 0

Yea, I watched "Best of Pawn Stars" Season 1 episode 1 and some guy brought a bunch of Silver to the pawn shop that he wanted to sell. Rick (owner) of the Pawn Shop had to drill a whole into the Silver bar to test if it was not filled with something like lead. (We not even talking about lower grade Gold bars that are covered with 24 Carat Gold.)

This is not what you have to do with bitcoins, if you have the Private key.. you are 100% sure that it will give you access to the content of the wallet and the bitcoins that it represent. (It is not something physical, but every Satoshi is real and verifiable on the Blockchain)

When you use dodgy Exchanges, they can fake the bitcoins on their internal ledger... but if you have the Private key.. you know that you own all the Satoshi that it is linked to in that wallet.  

This depicts the problem of the physical assets and the "real world", it is difficult to decentralise, but it is nearly impossible to have thrustless exchange.

I see this as a PoS problem, that is, you as buyer will be staking your reputation, yet having a trusted escrow for money and equivalents is not too difficult. The vendor and the logistics company will be staking their reputation. From this we can figure out what went wrong:

a) The buyer trusted a insufficiently reputable vendor? Should they have asked to match the insufficient reputation with a economic stake?
b) Should the seller have asked for a sufficient stake from the transporter, such that would cover the value at risk?

Or simply just take some insurance and avoid all this

Well there is thing like letter of credit, Post Dated Cheques, Bank Bonds and more with which you can always secure your funds. This is the common practice for the international shipping or cargo when its B2B transaction. I am not sure how the hell they made $36 million worth of transaction without such methods?

They could have followed the proper procedure to save those millions of dollars. They can still file the law suit though. However they will have to fight for it in the country of origin! That’s gonna be hard shit. Lolz

I can understand spraying, they were doing that in some warehouse, slowly (if they started on time)... like preparation time!

But can you imagine this entire action? One truck can carry 20-30 tons (some special ones can carry more), so roughly 200-300 trucks, you probably need a few forklifts... they must be doing that for a while, looks to me like impossible to do this switch in just 2-3 days! Or maybe they had containers, so one container with fake copper comes, one container with real copper gets out!?

Those 13 people are probably low ranked workers, and painters!

It seems wrong to make generalized conclusions about the safety of the precious metals markets based on such theft.I still believe that the precious metal markets are safe and secure and such cases are an exception.
I really hope that the buyer will get a refund and the criminals will get caught.
 

I feel like cases like this definitely add to the conversation, especially since counterfeiters are becoming more sophisticated in general, but I'd say it's still way too early to think Bitcoin will pull ahead. Gold literally has millennias of track record (I'm sure it has endured the same problems with counterfeiting and shipping for just as long) over BTC, not to mention it's basically the money of central banks. It's very difficult to imagine that gold will slip in the foreseeable future.

Bitcoin does solve the counterfeiting and shipping problems, but it also comes with issues of its own. One of the biggest I can see that can impact its long-term value is that it's still very vulnerable to legislation -- sure, the network itself cannot be interfered with, but I'm pretty sure most people won't bother once they have to start spoofing their locations, they can't trade conveniently because exchanges are banned, or they're threatened with jail time, etc. Things have definitely been trending for the better as of late though (and a lot better and faster than I would have expected, at that), so I do believe the flippening will eventually happen, but probably not within our lifetime.

In the country I live in is also starting to add this market to a new investment portfolio, I do not know too much about it, but heard from some friends that this market is guaranteed by the state. it's safe. Through the story of my friends I still cannot understand why it is possible to cheat so explicitly, are they too stupid or not?

Too bad that they didn't consider it, I believe that this is a planned heist because 36 million dollars worth of copper is not something that can be stolen in a heartbeat, planning was involved and inside jobs are definitely a possibility.