The FTX Heist, In Brief

The section I am repeating below was published two days ago in our Parallel Society subscription newsletter. I don’t like posting things that my subscribers have paid for, but in this case it’s only a small section of the letter and I think my subscribers would agree that it’s a worthwhile service to the greater community. (I have the best subscribers on the planet.)

As you’ll see, I don’t think the FTX crime, as vile as it was, is worth a great deal of our time: We are producers, and should devote our energy to production. For that reason I haven’t written about it till now. But it is a significant event, and so I ultimately decided it was necessary to address it in our bi-monthly What’s Going On section.

And so, here’s my bare-bones take on the FTX event.

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Briefly, there are several aspects of this fiasco:

    • The scheme was fairly elaborate, involving a disheveled kid (now 30) and his girlfriend. The kid was from a family that is super-connected within the US Democratic Party.
    • Billions of dollars were skimmed from crypto-hopefuls.
    • The money was used to pay off politicians (scores of Democrats and those Republicans who voted to impeach Trump), to fund the Covid hysteria (they funded the now-retracted anti-Ivermectin research that caused thousands of unnecessary deaths), and so on.
    • A good deal of the money was laundered through the Ukraine, which has been a preferred laundering path for big players since 2014 or so.

So, cui bono?

  1. The political Left. The money of the crypto-hopefuls was handed directly to them.
  2. Big pharma. Their profits were massively aided. (Television and social media as well, who fed on the turmoil.)
  3. Zelinsky and others in the Ukraine. Money launderers get a nice cut of the action, one way or another.
  4. The institutional enemies of Bitcoin. These people have a screaming need to take down stablecoins, which provide a smooth interface between their monopolistic money and free money. One stablecoin was taken down and others felt heavy pressure.

From here, all sorts of possibilities present themselves, some or all of which might be true:

    • Was this an operation to drain liquidity from the crypto-realm? (To ruin people who were leaving the plantation?)
    • Does the disheveled kid (crazily named Bankman-Fried) stay out of jail?
    • Will he be sacrificed to protect the rest of the scammers?
    • Will the money trail be examined? (Quite unlikely.)
    • Does a major effort to “regulate crypto” come out of this?
    • Can the crypto market move to better stablecoins? (Already underway, as we noted eight months ago in PS #27.)

It will be an interesting saga, but please be careful not to waste your time on it. Our job is to build, and soap operas like this are worth no more than an occasional update.

Do your job.


Paul Rosenberg

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