Cryptocurrency platform boss urges tighter regulation


By AFP
September 25, 2024

Cryptocurrencies are 'mined' at digital plants like this one in Paraguay - Copyright AFP Idrees MOHAMMED
Marie-Morgane LE MOEL

The co-founder of one of the world’s most popular cryptocurrencies called for tighter regulation of the sector to guard against the fraud and wild swings that have dogged it, in an interview with AFP.

Jeremy Allaire of Circle recounted the US firm’s decision to offer a stabilised cryptocurrency — and insisted crypto operators owed it to society to submit to safeguards just as other emerging sectors such as AI must.

“We have social objectives that we have to match against the technology,” Allaire said during a visit this week to Circle’s European headquarters in Paris.

Circle offers a USDC “stablecoin”, pegged to the dollar, as well as a euro-pegged variant, EURC.

Currently, $35.5 billion worth of USDC are in circulation.

As with other cryptocurrencies, transactions are recorded on a decentralised ledger, the blockchain, and not by a bank as is the case with traditional currencies.

However, whereas the dollar value of cryptocurrencies such as bitcoin tends to fluctuate, often wildly, the creators of stablecoins actively target a stable value.

In a world propelled by technological development, Allaire said, safeguards are vital for such activities.

“If I’m writing software to control a ballistic missile system, that should be regulated activity,” said Allaire.

“If I’m writing a large language model and deploying that, and it has the potential to do very problematic things in society, there need to be rules that need to be assessed. Crypto is the same thing.”

– Crypto fraud, ransomware –

Cryptocurrencies have made headlines since their creation, from their extreme volatility to the collapse of several industry giants, foremost among them the FTX exchange platform.

The best-known cyptocurrency, bitcoin, remains the currency of choice for paying on the dark web without leaving any trace.

It is used for extorting funds via ransomware attacks, which block access to victims’ computer systems and demand a ransom payment.

According to a recent report by Chainanalysis, the first half of 2024 was marked by a decrease in illicit activities. However, over that period, $460 million was paid out for ransomware, a rise of two percent on a year earlier.

Crypto exhanges operate through open-source software, Allaire noted.

“That helps with transparency, visibility, security, other things.”

But some have been “using the technology to do things outside of any kind of supervision”, he conceded.

“You’ve seen fraud, abuse. You’ve seen people running off with money.”

When cryptocurrency emerged, “unregulated intermediaries” sprang up in the sector, he said.

“Of course, the risks they take… in many cases, have led to significant losses,” Allaire said.

“But that’s not an argument against the technology. That’s an argument against humans. And it’s an argument for better supervision.”

– EU, US crypto regulations –

Regulators across the globe have taken note.

Last year the European Parliament adopted an EU-wide framework for crypto asset markets, “MiCA” — Markets in Crypto-Assets — requiring mandatory approval for digital-asset service providers.

In July, Circle announced it was the first “stablecoin” issuer to comply with this new regulation.

Stablecoins are used to facilitate intra-crypto exchanges by investors without having to go through a bank.

But they also give users access to a product pegged to the dollar without having a bank account in the United States, and allow cross-border payments or money transfers.

In the United States too, greater regulation is on the agenda.

US presidential candidate Kamala Harris was quoted as telling Bloomberg last week: “We will encourage innovative technologies like AI and digital assets, while protecting our consumers and investors.”

In May the US House of Representatives passed a legal framework designed to regulate the crypto market — the Financial Innovation and Technology for the 21st Century Act.

Circle is meanwhile preparing to move its headquarters from Boston to New York City – “at the very top of the World Trade Center… the very heart of the dollar international system,” says Allaire.

“That’s in part symbolic. It’s also who we are, what we’re doing. We’re building, hopefully, the world’s leading digital dollar and upgrading to this new internet financial system.”

Opinion

Trump's New Crypto Project Is a Type Linked to Organized Crime and Terrorism

Maggie Harrison Dupré
Sat, September 14, 2024




The crypto lobby has been pouring boatloads of cash into the latest presidential campaign of former president Donald Trump, who has entirely abandoned his once-hardline stance against digital currencies as the campaign money has rolled in.

Now, on the back of recent promises to make America the "crypto capital of the world," Trump is prepping to publicly roll out a wildly dubious and ethically fraught new crypto project started by none other than his sons Eric and Donald Trump, Jr.

The project is called World Liberty Financial (WLFI), and it centers on "stablecoins," or coins that creators claim are pegged to stable commodities or government currencies. In an X-formerly-Twitter thread posted last week, the WLFI team claimed their stablecoin would be pegged to the US dollar.


"For too long, the average American has been squeezed by the big banks and financial elites," Trump, a financial elite whose penthouse is caked in gold, said in a Thursday X-formerly-Twitter video promoting the forthcoming crypto venture. "It's time we take a stand — together."

But while stablecoins sound like they should be stable, they've historically been disastrous for investors and economies.

The collapse of the so-called stablecoin Terra-Luna was central to the 2022 crypto crash that wiped nearly $2 trillion from the market, resulting not only in the catastrophic fall of billion-dollar crypto ventures like FTX but in people's entire life savings vanishing into thin air.

What's more, as The Wall Street Journal reported last year, stablecoins are also a favorite financing tool of organized crime and terror groups, who use the sleazy digital currencies to launder cash, traffic drugs, and even buy and sell humans.

And on top of all that, there are too many conflicts of interest to count.

If elected, Trump has already promised to slash crypto regulations and bring digital currency into the mainstream American economic fold. WLFI would capitalize on those pro-crypto regulatory shifts, thus putting a sitting president in the position of supporting a possibly lucrative family business through the powers of the federal government. And like Trump's Truth Social meme stock, WLFI would also offer obvious new inroads to currying Trump family favor, as wealthy operators looking to suck up could simply pour investments into the Trump sons' stablecoins.

Some of the non-Trump family characters reportedly involved in the project are too seedy to even make up. As Bloomberg News reports, a key WLFI "dealmaker" is a person named Chase Herro, a former colon cleanse salesman who stated in a 2018 YouTube video — while driving around in a Rolls-Royce — that "you can literally sell shit in a can, wrapped in piss, covered in human skin, for a billion dollars if the story's right, because people will buy it."

"I'm not going to question the right and wrong of all that," Herro added. Clearly the kind of guy you'd want to be entangled in the American economy.

WLF defended its stablecoin effort in an X post this month as a means of ensuring the "dominance" of the US dollar and maintaining America's financial leadership on the international stage. In the same thread, the company claimed without evidence that the US dollar is actively under attack by unnamed "foreign-nation states." But economic experts overwhelmingly agree that fearmongering claims around the allegedly imminent downfall of the American dollar are exaggerated and that knocking the US dollar out of its top spot would likely take decades.

Through one lens, Trump's very public backing for WLFI is just the latest example of the former president using his campaign to promote a personal or family business. In addition to standard campaign merch, he's selling less-conventional golden sneakers for nearly $500, as well as a $299 pair of "Trump Crypto President" low-tops in the shade "Bitcoin Orange"; $99 NFTs of himself; a $59.99 "patriotic" take on the Bible; and a recently-published coffee table book in which he threatens to jail Meta CEO Mark Zuckerberg, which is available for $99 (though you can get a signed version for $499.)

But the implications of WLFI are far more serious than expensive Bibles and random junk.

In addition to being used to fund illicit activities around the world, stablecoins have proven to be anything but stable. Coupled with the clear risk of corruption that the Trump family's involvement in the crypto world would pose should the former president retake the Oval Office, and everything about WLFI's scheme is as dangerous as it is bankrupt.

More on Trump and crypto: After Calling Crypto a "Scam," Donald Trump Now Owns Millions in Crypto


Trump to unveil crypto project amid scams and fears of ‘huge embarrassment’

Anthony Cuthbertson
Fri, September 13, 2024 


Republican presidential nominee Donald Trump makes remarks at the Fraternal Order Of Police’s National Board Of Trustees meeting. on 6 September, 2024 in Charlotte, North Carolina (Getty Images)


Former US President Donald Trump plans to unveil a brand new crypto project next week that has already been plagued by scams and targeted by cyber criminals.

The Republican candidate will reveal the World Liberty Financial project from his Mar-a-Lago resort in Florida on Monday, claiming it will revolutionise finance and “leave the slow and outdated big banks behind”.

The project is being led by his two sons, Donald Jr. and Eric Trump, though little is known about what the venture will entail.

In a recent interview with the New York Post, Eric Trump described it as “digital real estate” – referring to either the creation of virtual property within the metaverse, or the digital tokenisation of real-world assets in the form of non-fungible tokens (NFTs).

“It’s equitable. It’s collateral anyone can get access to and do so instantly,” he said. “I don’t know if people realise what a shake up that is for the world of banking and finance. I hope we can help change that.”



Earlier this month, tens of thousands of Donald Trump’s followers were tricked into joining a fake group on the messaging app Telegram that was claiming to offer free cryptocurrency giveaways from the Trump-backed platform.

The group has since been removed, though ads promoting the scam giveaways still continue to appear for its 150,000 members. Telegram did not respond to a request for comment from The Independent.

The X accounts of Mr Trump’s daughter Tiffany and daughter-in-law Lara were also targeted by cyber criminals, who hijacked their profiles in order to share fake links for the project.

Nic Carter, a Trump supporter and noted figure within the crypto industry, advised the former president to stop the launch of World Liberty Financial, writing on X: “At best it’s an unnecessary distraction, at worst it’s a huge embarrassment and source of (additional) legal trouble.”

The project’s official Telegram channel revealed that the launch event for World Liberty Financial will be live streamed on X at 8pm ET on Monday (1am BST on Tuesday).

“Get ready as we unveil our plan to Make Finance Great Again,” the Telegram post stated. “This is a landmark event you won’t want to miss! Let’s make history together.”

Mr Trump has pitched himself as the pro-crypto candidate in the upcoming presidential elections, recently appearing at a bitcoin conference to outline his plans for the industry if elected.

Having previously dismissed the world’s leading cryptocurrency as a “scam”, Mr Trump told the crowd at the Bitcoin 2024 conference in Nashville that he would create a “national bitcoin stockpile” from seized criminal funds, as well as “immediately appoint a bitcoin and crypto presidential advisory council”.


Behind the Trump Crypto Project Is a Self-Described ‘Dirtbag of the Internet’

Zeke Faux and Muyao Shen

BLOOMBERG
Fri, September 13, 2024


Behind the Trump Crypto Project Is a Self-Described ‘Dirtbag of the Internet’

(Bloomberg) -- Chase Herro has sold a lot of things in his career. Weed. Weight-loss “colon cleanses.” A $149-a-month get-rich-quick class. Now he’s adding another line to his resume: the Trump family’s crypto guru.

Herro is the dealmaker behind World Liberty Financial, the crypto project that Donald Trump and his two older sons have been promoting on social media in recent weeks, according to two people involved with the project. Herro's long-time business partner Zachary Folkman is also playing a key role. While few details about World Liberty have been released, Eric Trump said that the startup will promote “financial independence” and Donald Trump Jr. said it will “make finance great again.” Former President Trump himself posted a video saying he'd announce the details on Sept. 16. “We’re embracing the future with crypto and leaving the slow and outdated big banks behind,” Trump said.

Yet Herro, a fast-talking 39-year-old who shows off his fancy cars and private-jet rides on social media, is an unknown in the crypto world. More than a dozen prominent digital-asset investors said in interviews they had never heard of him. The only crypto project with which he was publicly affiliated attracted only a few million dollars and suffered a devastating hack. A token he promoted on influencer Logan Paul’s podcast dropped 96% afterward. In one speech in 2018, he called himself “the dirtbag of the internet” and said that regulators should “kick s---heads like me out.”

“You can literally sell s--- in a can, wrapped in piss, covered in human skin, for a billion dollars if the story's right, because people will buy it,” Herro said about crypto in a 2018 YouTube video recorded as he drove in a Rolls-Royce. “I'm not going to question the right and wrong of all that.”

Bloomberg News sent detailed questions to a World Liberty email address. “We all see the picture you're trying to paint here and consider it at best grossly inaccurate,” a man named Jim Redner replied. “We're confident that our results will speak for themselves.” Redner said he was not a spokesperson for the company and was "just answering emails.” Herro, Folkman and the Trump presidential campaign didn’t respond to messages seeking comment.

Herro was introduced to the Trumps by Steve Witkoff, a real-estate developer and longtime supporter of the former president, after first meeting one of Witkoff’s sons, according to one of the people involved with the project.

When they met, Trump was reconsidering his stance on crypto. He’d once called Bitcoin a “scam against the dollar,” but in late 2022 he licensed his image for a series of nonfungible tokens – essentially, digital trading cards – featuring cartoon images of a muscular Trump. Then in July, after Bitcoin advocates raised what they said was $25 million for his campaign, Trump flew to Nashville to speak at a Bitcoin conference, where he promised to loosen regulations on the industry and create a strategic national stockpile of the cryptocurrency.

“The United States will be the crypto capital of the planet,” Trump said in the speech.

At the same time, Trump’s sons were getting curious about the industry. At the Nashville conference, Donald Trump Jr. appeared at an event sponsored by a little-known token called “Make America Great Again, Again,” though he said he had no affiliation with the project. And in June, Martin Shkreli, the former hedge-fund manager who served years in prison for securities fraud, said that he’d been talking with Barron Trump about starting another Trump cryptocurrency. Shkreli declined to comment.

Herro, who usually spells his name as “Chase Hero” with one “r” online, seemed like a better partner. He was affiliated with Dough Finance, a so-called decentralized-finance protocol which promised to allow users to borrow and lend crypto without intermediaries.

The two people involved with World Liberty insisted that Herro is a billionaire with a track record of crypto success. But Dough Finance only attracted $3.2 million in total activity, a tiny amount for the crypto industry, according to data provider DefiLlama. In July, it was hacked for about $2 million and it appears to be inactive now. An email to Dough Finance seeking comment was not returned.

Like Dough, World Liberty is being pitched as a platform for borrowing and lending crypto. It will have its own token, called WLFI, which it says will allow users to vote on how the project is run, according to a white paper reviewed by Bloomberg News. About 70% of those tokens will be reserved for insiders, with the rest sold to the public to raise cash. That amount of tokens going to insiders is “quite high" for a project that in theory is supposed to be decentralized, said Leo Mizuhara, founder of crypto asset manager Hashnote. Usually no entity or group of investors owns more than 20% of a project's total token supply, he added.

While the World Liberty plan might sound innovative to someone unfamiliar with crypto, startups like this are common, and few succeed. Many of them are only created in order to sell tokens and make money, said Tarun Chitra, general partner at Robot Ventures, which in August raised a $75 million fund to invest in new crypto projects.

“This just feels like a fly-by-night, trying to make a quick buck, kind of thing,” Chitra said of World Liberty. “It really doesn’t seem earnest to me.”

Herro’s involvement isn’t the only red flag when it comes to World Liberty. The white paper lists 18-year-old Barron Trump – a college freshman with no known crypto expertise — as “chief DeFi visionary.” A JPMorgan Chase banker listed as an adviser to the project, Brian Baker, refused to say whether that description was accurate.

Herro is described in the white paper as the person responsible for “data & strategies.” His friend Folkman is listed as “operations lead.” Folkman used to run a service called Date Hotter Girls where he taught seminars about how to pick up women. “OK, how many guys came here to learn how to take girls home and bang them?” Folkman said in a speech in 2014. The trademark for World Liberty is registered to a company using the same address in Puerto Rico as another company run by Herro and Folkman.

Herro likes to tell the story of how he spent time in prison for dealing marijuana when he was a young man before getting rich through internet marketing in the early days of social media. He was involved in what’s known as “affiliate marketing,” in which middlemen buy ad space on social networks and use it to sell products for other companies, which pay a bounty.

“You could just make millions,” Herro said in a video. “It was the easiest thing in the world.”

Herro’s marketing business left only a few traces online. But in a lawsuit he filed in 2014, he said that he marketed a “colon cleanser” called Regula RX on Facebook and wasn’t paid for the sales he generated. Carl Ruderman, owner of Regula RX, didn’t immediately respond to a letter sent to him at a federal prison in Miami, where he’s serving a five-year sentence for an unrelated Ponzi scheme.

Herro said in another video that he had at times employed a tactic called “cloaking,” which means hiding ads’ contents to evade social networks’ rules. In another lawsuit he filed in 2014, he sought a refund from a middleman who had sold him 20 Facebook accounts from Singapore for $100,000. Both tactics were the types of strategies used by advertisers who tried to place deceptive ads against social-media networks’ rules, according to Rob Leathern, a former Facebook executive who had responsibility for enforcing rules around advertising. “There’s no legitimate use case for cloaking,” said Leathern. (Leathern said he'd never heard of Herro.)

Herro said in his videos that the online advertising business became more challenging once competition emerged. In recent years, he and Folkman have pivoted to crypto, running a membership group called the Watchers that claimed to teach people the secrets of crypto trading and making money online. The group had more than 250 members who paid at least $149 a month, according to two people formerly involved with the group. Some paid tens of thousands of dollars for personalized coaching. Herro also appeared at other paid seminars with Jordan Belfort, whose penny-stock scams inspired the movie The Wolf of Wall Street.

“If you do this right, who f---ing cares if it goes to zero?” Herro said in a YouTube video promoting the Watchers. “You'll make so much money trading these f---ing coins in and out.”

In 2021, Herro appeared on influencer Logan Paul’s podcast, Impaulsive. (Trump went on the same podcast in June.) During the podcast, Paul acted like he was surprised when Herro said he liked a cryptocurrency called OMI, which Paul said he liked too. A co-host asked if the two had planned the promotion before the show, and Herro denied it, swearing “on my kids.” The price of OMI has since declined 96%. And a leaked video released by the scam-busting YouTuber Coffeezilla shows Herro and Paul talking with someone about getting more OMI tokens ahead of the show. A lawyer for Paul didn’t respond to a message seeking comment.

The white paper for World Liberty lists Donald Trump as “chief crypto advocate” and his sons Eric and Donald Jr. each as “Web3 Ambassador.” A disclaimer says that World Liberty is “not owned, managed, operated or sold” by the Trumps. It does note, however, that they may receive compensation. CoinDesk first reported on the white paper last week.

Promoting a private business like this while running for president is not illegal, though it’s a clear conflict of interest that may lead Trump to push crypto policies that favor his company, according to Danielle Brian, president of the Project On Government Oversight.

“The biggest harm is public policy is skewed away from what benefits the country to what benefits the individual and their family,” Brian said.

Whether or not the World Liberty project achieves its goals, its token might still be valuable. Trump’s fans have shown they’ll make investments in his companies even if they aren’t successful. In 2021, two former cast members from his reality show The Apprentice pitched Trump on starting his own social network, according to Reuters. The company that grew from that pitch, Trump Media & Technology Group Corp., which operates Truth Social, is worth about $3 billion, despite quarterly revenue of less than $1 million. Trump owns the majority of its stock.

When Trump considers an endorsement deal, his main consideration is not whether the product is useful, but whether he’ll receive cash up front, according to Michael Cohen, who served as the former president’s personal lawyer for years before testifying against him at his fraud trial.

“Is there upfront money attached?” Cohen said in an interview. “If the economics of the deal are to his benefit, with zero risk, he’s all in.”

--With assistance from Max Abelson.


©2024 Bloomberg L.P.






World Liberty, Crypto Project Helmed by Donald Trump's Family, Will Release on Sept. 16

Shaurya Malwa
Thu, September 12, 2024 at 11:58 p.m. MDT·1 min read




Donald Trump announced that his family's cryptocurrency project, World Liberty Financial, will launch on September 16.


The project aims to move away from traditional banking by embracing cryptocurrencies.

Republican candidate Donald Trump said on a podcast Thursday that his family-helmed decentralized finance (DeFi) project World Liberty Financial will be released on September 16.

“Embracing the future with crypto and leaving slow and outdated big banks behind,” Trump said in a video posted on his X account. “Join me live at 8 P.M.”


World Liberty Finance is helmed by Trump’s sons, Eric Trump and Donald Trump Jr, and the 18-year-old Barron Trump is the project's "DeFi visionary.”

A draft of the World Liberty Financial whitepaper received by CoinDesk shows the project will include a "credit account system" built on DeFi platform Aave and the Ethereum blockchain – to facilitate decentralized borrowing and lending.

Broadcast messages on the World Liberty Finance Telegram channel show plans for stablecoins pegged to the U.S. dollar - stating the project wants to “spread U.S.-pegged stablecoins around the world” to “ensure that the U.S. dollar’s dominance continues.”

Polymarket Bettors See 84% Chance of Donald Trump Starting His Own Token

Shaurya Malwa
Fri, September 13, 2024 

Betting odds on Polymarket for Donald Trump launching a cryptocurrency token before the November election surged to over 84% after he announced a launch date for the World Liberty Financial crypto project, but later reversed.

The market, which has seen over $1.7 million in bets, will only resolve to "Yes" if Trump personally issues a verifiable token on a blockchain by November 4, 2024, despite plans for a governance token named "WLFI" in the project's white paper.

Betting odds on Republican candidate Donald Trump issuing a token before the November presidential elections jumped to over 84% on Polymarket early Friday, before reversing, as he confirmed a launch date for the Trump family-helmed World Liberty Financial crypto project.

The odds of a “yes” in the “Will Trump launch a coin before the election?” market were just 40% on Thursday and 16% a month ago. That seemingly changed in the past 12 hours as Trump said the World Liberty Financial project will released on Monday.

(Polymarket)

The market has attracted over $1.7 million in bets by Polymarket users as of Friday. It will resolve to "Yes" if conclusive evidence emerges that Trump is involved in “deploying a new token” by November 4, 2024, 11:59 PM ET.

That means mere plans or confirmation for the token will not resolve the market to “Yes:” it will have to be an actual token issued on a blockchain in a way that can be verified by all.

A copy of the World Liberty white paper seen by CoinDesk states plans for the project to issue a non-transferable governance token called “WLFI.” However, it remains unknown what specific part Trump plays in the project and his role in issuing the proposed token.

Still, some Polymarket users are taking their chances.

“The development team already launched multiple test tokens on Ethereum,” user “Car,” who holds over 4,400 yes shares, wrote. “Funnily enough, that's enough to resolve this market to YES.”

“Non-fungible tokens are indeed Tokens,” another user, “563defi,” who holds 6,600 yes shares, said, referring to Trump’s lineup of NFT projects.

Those on the other side of the bet remain skeptical: “Even if a token launches, it will be his son's,” user “Tenebrus7,” who holds 2,000 “No” shares, wrote. “After the scam - trump will not want to be associated with it anytime soon.”

Why Are More Tech Leaders Pivoting to Trump? Follow the Crypto.

Crypto may well be the most salient factor in Silicon Valley elite’s new willingness to endorse the right.

By Tyler Walicek

August 4, 2024

Source: TruthOut





The last few weeks have seen a spate of leading technology entrepreneurs, investors and other key figures publicly endorsing Donald Trump’s 2024 campaign to regain the presidency. Among them are elite representatives of PayPal, Tesla, Andreessen Horowitz, Sequoia Capital and Palantir. Until rather recently, such a heel turn would have been considered anathema in Silicon Valley. In 2016 and 2020, tech workers to tech billionaire elites channeled the vast majority of donations and endorsements to Democrats — save for some notable exceptions, like Oracle founder Larry Ellison. Now, a political schism may be developing between the pro-business liberal leanings of the California-based industry and a new willingness among certain major figures to welcome reactionaries into the fold.

In truth, the rank and file of Silicon Valley — the programmers and other workers who actually staff the companies and build the products — have in all likelihood not wavered in their decidedly liberal orientation, if political donations are any indicator. Though there are certainly still elements among the elite sympathetic to Democrats, the rarefied air of tech leadership is now echoing with purportedly newfound right-wing sympathies. Inevitably, their reactionary pivot seems poised to open the doors to more widespread social acceptability of Republican alliances in the industry.

Whether or not the new posture trickles down, tech leadership’s stance can, unsurprisingly, be traced to class interest. The game has changed in the intervening years. the rise of cryptocurrency as a vast engine of speculation and wealth, and Biden administration agencies’ attempts to regulate it, have proffered a strong incentive for capital’s elite to do what they characteristically do: place the interests of profit and personal gain above whatever vestiges of moral principle they may harbor.
Tacit Alignments

Tech leaders seemed to reveal their endorsements of Trump en masse in July — even if their real sentiments have been stewing in private for far longer. First, a survey of the figures involved: The standard-bearer for tech’s new right-wing posture, is, of course, the humiliating public spectacle of Elon Musk. (Venture capitalist Peter Thiel could probably be considered Musk’s co-figurehead, but his fascist orientation is nothing new; Thiel has been waiting in the wings for this moment.) Musk’s full-throated backing of Trump, of course, comes as no surprise, given that he has been publicly wriggling around in the reactionary slop trough for some time. His endorsement came immediately in the wake of the assassination attempt on Trump, which seemed to supply an advantageous media moment.

Other self-declared Trump backers in tech include billionaire investor David Sacks (who previously said that Trump was “disqualified” as a candidate after January 6, 2021) and venture capitalist Doug Leone of Sequoia Capital. (Though a longtime Republican, Leone also rescinded, then reconfirmed his support.) Some of these key players have committed major financial resources to a prominent pro-Trump political action committee, America PAC, which has seen massive investment from across the sector. Musk pledged, and then reneged, on a monthly $45 million. Other major America PAC donors include Joe Lonsdale, a founder of Palantir, the Facebook-investor twins Tyler and Cameron Winklevoss, and members of the so-called “PayPal mafia,”along with aTesla board member and another Sequoia Capital investor named Shaun Maguire.

This summer, David Sacks and venture capitalist Chamath Palihapitiya, both former Democratic donors, hosted a major fundraiser for Trump, attended by some major names: among them the aforementioned Winklevoss twins and vice presidential hopeful J.D. Vance. Bloomberg quoted Sacks as saying, “I’ve been very critical of Biden’s performance over the last four years, and I would like for him not to win another term. I’ve been looking at all the alternatives and getting to know the alternatives.” That’s one way of saying he’s rallying millionaire donors to elect Trump.

And in July, one of the more notable heel turns took place when the investor duo behind the eponymous firm Andreessen Horowitz apologetically justified their support for Trump on their podcast, claiming opposition to Democratic regulatory policies. They’ve also pledged to donate to America PAC.

It’s not surprising that Marc Andreessen and Ben Horowitz felt the need to proffer some hesitant, mewling explanations. For years the tech industry attempted to burnish its image: a certain variety of milquetoast liberalism and nominally “progressive” values, part of its public relations quest to portray itself as “making the world a better place,” in the infamous and much-mocked formulation. The failed vision of “tech humanism” has led to some backtracking and second thoughts among tech’s former boosters.

But of course, in practice, there have always been strong covert and overt ideological alignments between tech and the right — their shared interest in laissez-faire regulatory and tax policy and sanctification of entrepreneurial capitalists makes them natural bedfellows. Liberal contingents of the tech elite certainly remain, but they share certain right-libertarian leanings; Silicon Valley has its own California-inflected pseudoutopian flavor of pro-business ideology. While this latest pivot has been called a “mask-off moment” for tech elites, they never really wore a convincing disguise in the first place.

Nevertheless, after a yearslong onslaught of revelations about the corruption, predatory behavior, surveillance and privacy issues, racist and sexist workplace environments, threats to democracy, and other serious issues rife within the industry, there’s an unmistakable sense that any residue of tech’s utopian sheen is long gone, and the PR gambit to present as socially benevolent has been a dismal failure. Perhaps, with that pretense discarded, some see a right-wing allegiance as the next self-evident step.

Truthout reached out to Molly White, a tech critic, cryptocurrency researcher and commentator, software engineer and campaign finance watchdog to learn more about tech leaders’ motivations. White agreed that some in tech may just now be gaining the confidence to publicly embrace their self-interest, with less fear of censure. “It’s becoming more socially acceptable to be right-wing in tech,” she said. “We’ve certainly seen that happening the last handful of years, though the Peter Thiels of the world have been around longer than that.”


While this latest pivot has been called a “mask-off moment” for tech elites, they never really wore a convincing disguise in the first place.

Some of it could also be put down to a churlish kneejerk reaction — as White said, “The so-called techlash has been taken somewhat personally by some of these powerful people, who are reacting to that in a sense.” Still, for leading venture capitalists and CEOs to shrug off the stigma of a Republican endorsement — which even fairly recently would have been considered a third rail — would require a more pressing incentive.

A telling moment came when the vice presidential candidate was announced on the Trump ticket: J.D. Vance, the onetime Thiel employee and tech investor turned limply pandering blood-and-soil reactionary. Some in tech were reportedly giddy at his pick. Whether or not the Vance pick was the real inspiration for any endorsements, his appointment did not hurt tech leaders’ interest because Vance is considered a major ally of cryptocurrency, having declared his sympathies with crypto before, despite a stated opposition to “Big Tech.” Vance, as an Ohio Republican senator, also drafted legislation that would have drastically altered the Security and Exchange Commission (SEC) and other agencies’ oversight of the field.
The Crypto-Fascist Influence

As White explained to Truthout, crypto may well be the most salient factor in Silicon Valley elite’s new willingness to endorse the right. A widespread need among tech elites to protect their crypto investments appears a highly compelling consideration, which is spurring endorsement of Trump.

It’s clear that Trump holds major appeal for crypto interests — the candidate himself has played up his affinity, claiming in a speech to a Bitcoin conference, in typically bombastic form, that he will make the U.S. the “crypto capital of the world.”

“A lot of these big figures who are spending a lot of money in politics have substantial crypto holdings,” she said. “A good example of that would be the Winklevoss twins, who hold a substantial amount of Bitcoin. And then there’s the investor class.” White founded the site Follow the Crypto, which tracks the considerable amounts of money animating crypto political advocacy.

“It comes down to the fact that [crypto investors and executives] really have a lot to lose,” White continued. “They stand to gain a lot in the coming few years if they can achieve some change in a federal stance towards crypto.… They’re hoping to install politicians at the congressional level and in the presidential race who would reduce the degree of regulation.”

The capricious and poorly regulated cryptocurrency field has made and crushed innumerable fortunes in recent times. As White pointed out, the highest echelon of tech investors and executives all have major crypto holdings, in both the currencies themselves and the firms that run as, effectively, unregulated securities exchanges. The Biden administration’s SEC under Chairman Gary Gensler has embarked on efforts to regulate and rein in the industry — so far, with some success. Gensler has spoken out about the “frauds and scams” within crypto, and has justified his enforcement actions as cracking down on the “risk of non-compliance with U.S. law.” Democratic lawmakers have shared in his desire to regulate the industry.

Recently, major crypto-investing billionaire Mark Cuban and other industry interests met with Rep. Ro Khanna (D-California), Sen. Kirsten Gillibrand (D-New York), senior Biden adviser Anita Dunn, and other leading Democrats to lodge complaints about SEC oversight. Gensler’s SEC has brought dozens of enforcement actions against crypto firms, charging them with everything from unregistered securities trading to operating full-fledged pyramid and Ponzi schemes — the industry being highly prone to (some might say fully constituted by) massive fraudulence. Gensler has sought to force crypto exchanges to register as trading platforms with the SEC, which would make the space less of the wild casino that it presently is. Speculation is the raison d’etre of crypto, going hand in hand with predatory behavior and outright fraud.

The SEC has already sanctioned the concept of cryptocurrency exchanges, legitimizing the industry and raising concerns of another speculative bubble that could lead to financial crisis. Yet this is not enough for crypto acolytes — they want to be able to speculate without even the vaguest specter of oversight. Naturally, the proverbial house, which would like to keep winning, has taken issue with the SEC’s approach. (Trump, seeing an opportunity to please donors, made a crowd of cheering crypto fans a promise to fire Gensler.)

The power of the crypto cartel is exemplified by the elite status of its very own special interest political action committee. As Follow the Crypto has documented, vast sums of money have flowed into the top crypto super PAC, called Fairshake, to the tune of $160 million. Top crypto companies like Coinbase and Ripple, plus venture capital firm Andreessen Horowitz, account for the vast majority of that sum; the Winklevoss twins and other crypto companies made up the rest.

Of that staggering income, Fairshake has spent around $15 million — making it, at present, the eighth-largest super PAC for expenditures and the fourth-largest for total fundraising. The Fairshake site describes the PAC’s aims as “Providing blockchain innovators the ability to develop their networks under a clearer regulatory and legal framework.” It is safe to surmise that regulatory “clarity” is not the only variable they wish to tweak when it comes to financial oversight.

Fairshake, intriguingly, channels money to two other PACs. One, called Defend American Jobs, promotes conservative candidates and causes; the other, Protect Progress, does the same for liberals. These parallel groups exist to, in essence, launder Fairshake money and obscure one PAC’s donations from the other, so as not to upset any Fairshake donors with particular leanings. What could better illustrate the industry’s amoral self-interest? This attempt to play both sides of the aisle is reminiscent of disgraced FTX crypto exchange founder Sam Bankman-Fried’s bipartisan double-dealing, noted White.

The leaders of Silicon Valley, meanwhile, “have substantial investments in [crypto] that do strongly color their motivations when it comes to the political end of things,” she added. “Certainly, those people have spoken out — particularly Andreessen and Horowitz have spoken out — and have funded very crypto-specific political movements,” with Fairshake being the most trenchant example.

White also pointed out that there has been an unconvincing effort by its acolytes to portray support for crypto as a grassroots effort cheered by a wide swath of Americans. Stand with Crypto — a group operating both a PAC and a 501(c)(4) under that name — claims that it has received nearly $180 million in donations from 1.3 million “crypto advocates.” However, as White has discovered in the course of her investigative work, the majority of the money Stand with Crypto claims to have raised came from either the wealthy and venture capital donations to Fairshake, or otherwise to MoonPay, a crypto company. The PAC’s individual donations amount to “about $13,000 from seven people, two of whom work for the crypto PAC, and two of whom work for Coinbase,” she said.

In other words, like so much associated with cryptocurrency, the industry’s political influence effort is hollow and fraudulent, representing nothing but the avaricious concerns of a segment of elite hustlers, and almost no one else. Yet, thanks to its overflowing coffers, the crypto lobby is able to exert undue influence on the political system.

It’s not like Democratic Party tech donors haven’t displayed similar tendencies: Reid Hoffman, founder of LinkedIn and a Microsoft board member, seems to be conditioning his support of Kamala Harris on her firing of Federal Trade Commission Chair Lina Khan, who has advocated for better regulation of cryptocurrency; Hoffman is a crypto holder who was an early investor in Coinbase. His opposition to Khan, though, seems to have more to do with her seeking antitrust enforcement against Microsoft regarding its acquisition of Inflection AI, which Hoffman co-founded. His fellow billionaire and Harris donor Barry Diller has echoed Hoffman’s call to fire Khan. (Interestingly, J.D. Vance has spoken positively of Khan and antitrust in the past — it remains to be seen whether he will flip on the matter.)

It also appears that a pivot from Democrats on crypto, antitrust, or other tech concerns is not impossible, as former businesswoman and venture capitalist, Gina Raimondo, the secretary of commerce under Biden who is widely perceived as pro-tech, is reportedly being vetted for the vice presidential candidacy.

Venture capitalists are also not, of course, totally unanimous in their support for Trump. Reid Hoffman, along with investor Vinod Khosla and 100 other figures, have come together as “VCs for Kamala,” representing the Democratic donor base in tech. Meanwhile, a report in the Financial Times seemed to indicate that, for their part, the Harris campaign has sought a “reset,” making overtures to crypto companies — though White pointed out that the sourcing on that news item is hazy — and it wouldn’t be the first time that crypto interests have exaggerated their sway with Harris.

Regardless of the direction Biden’s replacement takes towards crypto, the issue of the distorting influence of crypto, tech investors and donors in general is a bipartisan one — elites are able to deploy their wealth and power to exert disproportionate interest over the political system that governs us all. If any meaningful number of average Americans are concerned in the slightest with crypto, it’s likely only because its false promises robbed them of their meager savings. The industry preys widely on the poor with dubious enticements to buy in, including by the use of Bitcoin ATMs that target poor areas. To jack up coin values and inflate the asset bubble, the industry needs buyers to prop up its speculative schemes. The major holders get rich, while those who bought in, lured by promises of quick wealth, lose their savings and are left holding the bag.

And yet the perpetrators of these and other schemes are given pride of place in consideration by political candidates. The nation’s most vaunted technological entrepreneurs have made it clear that they will willingly cross the reactionary Rubicon, electing an aspiring dictator and placing their desire to enrich their already perversely bloated fortunes over all else. That valorization of self-interest — which at heart has always been the animating principle of Silicon Valley entrepreneurialism — would seem to indicate that tech leaders will likely get along just marvelously with their new reactionary allies.

Is Bitcoin a Republican issue?

 Why Nashville's crypto conference has a partisan edge

Hadley Hitson, USA TODAY
Fri, July 26, 2024 

NASHVILLE - As the Bitcoin2024 conference kicked off in Nashville’s Music City Center Thursday, attendees agreed: Cryptocurrency is political.

With current Republican presidential nominee and former President Donald Trump headlining the event Saturday, the rest of the schedule is decked out with GOP politicians, independents like Robert F. Kennedy Jr. and a few Democratic congressmen.

From Tennessee, U.S. Sen. Marsha Blackburn and Sen. Bill Hagerty are scheduled to speak. Also leading the agenda are famous government-surveillance whistleblower Edward Snowden, former Republican U.S. presidential candidate Vivek Ramaswamy and celebrity Russell Brand, along with hundreds of tech-industry speakers.

What's drawn legislators and crypto-industry insiders together in Nashville?

“Politicians follow votes,” BitcoinIRA cofounder Chris Kline said. “These are the same reasons they make stops in battleground states like Wisconsin, Ohio and even Nevada and Arizona. Bitcoin is no longer a niche interest group.”

There are also going to be several high-profile fundraising events.

David Bailey, CEO of conference organizer Nashville-based BTC Media — the parent company of Bitcoin Magazine — announced Tuesday that the conference was “in talks” with Vice President Kamala Harris’s presidential campaign to schedule her as a speaker. The next day, he said she declined the invitation and that “it would have been a disaster for her” anyway.

He then criticized Harris's political record and wrote on X: "Major democrat donor told me Kamala says privately 'Bitcoin is money for criminals.'"

Some crypto professionals said they view Bitcoin as inherently apolitical, but that’s changing as calls for consistency in crypto regulation grow louder with more support coming from Republicans.

Earlier this year, Trump pivoted on his critical Bitcoin views to embrace digital currencies. Meanwhile, President Joe Biden vetoed legislation that crypto leaders said would have improved their abilities to work with traditional banks.

Nationwide, eyes are turning to Nashville’s Bitcoin conference to see what progress will be made, if any politicians commit to a federal Bitcoin strategic reserve and if any surprise tech billionaires pop into town.

Elon Musk, the founder of SpaceX, Tesla, and Memphis-based xAI is rumored to take the stage at the conference.

Legislation is also expected to be discussed to bolster the profile of cryptocurrency.
A possible federal Bitcoin strategic reserve

Reports swirled throughout the crypto community over the last week that a federal Bitcoin strategic reserve could soon become a possibility in the U.S.

This would result in the federal government buying up an unspecified number of Bitcoin units and holding onto them — in the same way that the country maintains the Strategic Petroleum Reserve.

“A Bitcoin strategic reserve would mean that the U.S. is signaling to the rest of the world that we’re going to make a diligent effort to hold Bitcoin as part of the balance sheet of the Federal Reserve and the Treasury, but also possibly even look into putting more mining efforts here in the U.S.,” Kline said.

Mining is the process that creates new Bitcoins and verifies transactions.

Educational Bitcoin nonprofit CEO Dennis Porter said the reserve proposal could come from Trump, and Fox Business reported Wednesday that Wyoming’s Sen. Cynthia Lummis plans to announce legislation to create a Bitcoin reserve this week.

Lummis plans to speak in Nashville on Friday. Her office did not respond to The Tennessean’s request for comment on Thursday.
Support from Elon Musk

Bailey, head of the company hosting the Bitcoin conference, has alluded to a surprise guest who may speak in Nashville this weekend.

Bailey’s posts on X about making “more programming space” and “apologizing in advance for breaking the internet” sparked conjecture that tech billionaire Elon Musk could be in attendance. NFT news platform SolanaFloor also reported that Musk’s private plane landed in Memphis earlier this week.

Musk has been a strong supporter of cryptocurrencies, and following the attempted assassination of Trump earlier this month, he officially endorsed Trump for the 2024 election.
How Bitcoin aligns with the GOP

The Bitcoin2024 lineup — a who's who of Republican and libertarian celebrities, influencers and politicians — has a distinct partisan edge.

Several conference attendees said Republicans offer more favorable regulatory terms.

“Bitcoin itself is a way of decoupling money in the state, and so that might align more with the Republican or conservative side in terms of fundamental values of taking that power away from the government and the ability to choose a new form of money,” Quai Network cofounder Alan Orwick said. “That's kind of where the lines are being drawn.”

Others pointed to an “unfriendly” environment with the Securities Exchange Commission that they’ve noticed in the last four years.

“We haven't seen what VP Harris's stance is yet, but we're assuming it's the same as the Biden administration, which has been very hostile, especially in regards to the SEC Chairman Gary Gensler,” CastleFunds President Peter Eberle said. “Unfortunately, some of the innovative companies have decided to set up shop overseas, where the regulatory framework is more friendly.”

Eberle said he believes a Republican administration would foster more affable guidelines for crypto.

Hadley Hitson covers trending business, dining and health care for The Tennessean. She can be reached at hhitson@gannett.com. To support her work, subscribe to The Tennessean.

This article originally appeared on Nashville Tennessean: Nashville Bitcoin conference: GOP, libertarian politics at play

Trump Gets Upstaged by RFK Jr.’s Claims of ‘Bitcoin Fort Knox’

Teresa Xie and Stephanie Lai
Sat, July 27, 2024



(Bloomberg) -- The cryptocurrency community has anxiously been awaiting a speech by Donald Trump on Saturday, but his opponent Robert F. Kennedy Jr. may have stolen Trump’s thunder by announcing that the former president is considering the creation of a massive government reserve of Bitcoin should he return to the White House.

“I understand that tomorrow President Trump may announce his plan to build a Bitcoin Fort Knox and authorize the US government to buy a million Bitcoin as a strategic reserve asset,” Kennedy told the Bitcoin 2024 conference in Nashville on Friday, a day before Trump was scheduled to speak at the same event. “And I applaud that announcement.”

The Trump campaign did not respond to a request for comment on the remarks.

Kennedy told the conference that he would go even further than Trump if he’s elected: He would sign an executive order on his first day in office directing the Treasury to buy Bitcoin every day and add it to the tokens currently held by the Department of Justice until the US builds a reserve of at least 4 million Bitcoin.

One million Bitcoin currently have a market value of more than $68 billion, while 4 million are worth about $274 billion. Bitcoin currently has a market capitalization of about $1.3 trillion.

Kennedy said his plan would ensure US dominance in the sector and allow the nation to have the same proportion of Bitcoin as it has gold in its reserves, which would drive up Bitcoin’s valuation.

Kennedy, who is running a distant third behind Trump and Vice President Kamala Harris in polls ahead of the November presidential election, also said he would order the Internal Revenue Service to treat all transactions between Bitcoin and the US dollar as nontaxable.

Trump’s speech to the Bitcoin conference is scheduled for 3 p.m. New York time on Saturday, and will follow a fund-raiser targeting donors in the crypto industry who are in Nashville for the event. He invited supporters to an event with an asking price of $844,600 for a seat at a crypto-themed round table. Other prominent political figures at the conference include Trump’s vice presidential pick JD Vance, as well as his Republican primary opponent Vivek Ramaswamy.

The conference’s exhibition space was filled with promotions mixing Bitcoin and Trump themes, including vendors selling red baseball hats that said “Make Bitcoin Great Again” and “Bitcoin Made in America.”

“If Trump is elected, the U.S. will have to add Bitcoin as a reserve, because it is digital gold,” said Arseniy Grusha, chief executive officer of data-center firm Dataprana, who attended the conference. “The earlier they do that, the better it will be for the United States.”

Trump’s support for cryptocurrencies this election cycle is still relatively new and marks a departure from his stance on digital assets during his presidency, when he proclaimed that he was “not a fan” of Bitcoin and warned that unregulated crypto assets could facilitate unlawful behavior.

It’s no accident that crypto industry executives have crossed paths with the Republican nominee’s campaign trail: A potential second Trump term is likely their best chance for a softer approach from regulators, who heavily pursued crypto companies under President Joe Biden following the 2022 collapse of the FTX exchange and a string of industry bankruptcies that followed. Wealthy crypto executives have donated millions to Trump and pro-crypto political groups.

The former president ramped up his backing of cryptocurrencies in early June, when he met with several Bitcoin miners at his Mar-a-Lago Club and promised that he would advocate for US miners if elected.

Since that meeting, Trump has continued to publicly tout his support for cryptocurrencies, including posting on his Truth Social account that Bitcoin mining could be “our last line of defense against a CBDC,” referring to a central bank digital currency. Trump’s disdain for CBDCs echos sentiments held by crypto executives, who see a potential digital dollar as a way for the government to enhance financial surveillance on its citizens.

The former president also amended his party’s platform for the Republican National Convention in Milwaukee to read: “Republicans will end Democrats’ unlawful and unAmerican Crypto crackdown and oppose the creation of a Central Bank Digital Currency.”

‘Doesn’t Really Matter’

Despite Trump’s support for the industry, not everyone at the Nashville conference is a fan.

“I never voted and I won’t vote in this election and I probably never will,” said Colin Aulds, founder of crypto miner 10NetZero. “I don’t trust Trump to not backstab us. Politicians lie, and he’s still a politician.”

For others in Nashville, the enthusiasm for Bitcoin far outweighed their enthusiasm for any candidate.

“It doesn’t really matter who the president is,” said Chris Kramer, who traveled from Arizona for the event. “I don’t really care much about it, because Bitcoin will do its thing regardless.”

Most Read from Bloomberg Businessweek

Crypto Titans’ $160 Million War Chest Threatens Senate Democrats

Steven T. Dennis
Fri, 14 June 2024 


LEX LUTHER LOOK ALIKE

(Bloomberg) -- Crypto billionaires and their allies have amassed a $160 million war chest to protect their fortunes by bolstering US candidates who favor light-touch regulation of the embattled industry.

The staggering sum makes the crypto industry one of the most influential players in federal campaign finance. It’s the kind of money that’s already proven it can roil a California Senate race. In November, it could be pivotal in handing the Senate majority to Republicans.


Democratic control of the Senate hinges on the reelection of Banking Chairman Sherrod Brown of Ohio and Jon Tester of Montana, both cryptocurrency skeptics with tremendous sway over the fate of the crypto titans’ main legislative goals. They’re also the only two Democratic incumbents running this year in states Donald Trump won in the last election, making them prime targets for Republicans.

Fairshake, the crypto industry’s political action committee, and allied groups have nearly doubled their funding in just the past few weeks after getting $25 million each from Ripple Labs, venture capital firm Andreessen Horowitz, and Coinbase Global Inc. The billionaire twins Cameron Winklevoss and Tyler Winklevoss, who co-founded crypto exchange Gemini, contributed $4.9 million earlier this year.

Coinbase CEO Brian Armstrong, whose estimated net worth soared 50% so far this year with the resurgent crypto market to $10.8 billion as of Thursday, last week urged followers to vote out lawmakers in either party who don’t support digital assets. This week, Armstrong went to Capitol Hill to meet with more than a dozen senators in both parties. That list included Tester, who said afterward he wants to talk to other senators about a crypto regulation bill.

Faryar Shirzad, the chief policy officer for Coinbase, said the company doesn’t control Fairshake and gave to the PAC to promote the industry’s agenda in elections.

“We’ve learned as an industry that you have to show up politically to be heard,” he said. “We’re very, very committed to see that though. We’re very committed to this cycle and beyond. This is only the beginning of a long road.”

Regulatory Goals

Crypto giants want to reduce oversight by the Securities and Exchange Commission, which has sued many major crypto players and imposed hefty fines. Gary Gensler, the agency’s chair, has said the industry is riddled with fraud and that exchanges don’t properly safeguard their customers’ assets and often mix them with their own funds.

Platforms like Coinbase, which the SEC sued last year for allegedly violating securities laws, have a lot to lose if the regulator’s position holds. The SEC claims Coinbase has made billions of dollars illegally promoting the sale of securities, and has also failed to register, as required, as an exchange, a broker and a clearing agency.

Fairshake spokesman Josh Vlasto said this week the super PAC is eyeing both Brown’s and Tester’s reelection races, though it hasn’t committed spending on either race. Earlier this year, Kristin Smith, chief executive officer of crypto trade group Blockchain Association, said the industry would be watching how Brown handles crypto’s legislative agenda.

The Democratic-led Senate so far hasn’t acted on the industry-friendly regulation package, which the Republican-controlled House approved in May.

Michigan Democratic Senator Debbie Stabenow, who also met with Armstrong this week, said she’s working with senators on legislation to govern regulation of crypto assets by the Commodities Futures Trading Commission, crypto’s preferred regulator.

Majority Leader Chuck Schumer supports that effort, calling it “reasonable regulation.”

Heavy Spending

Fairshake spent $10 million ahead of California’s March open Senate primary to pummel progressive Representative Katie Porter, a Democratic crypto-skeptic, with negative ads ahead of her defeat. One television spot called the congresswoman a fake and an accomplished actor while the words bully, liar and unfit flashed across the screen. The ads didn’t mention crypto.

The high-visibility election influence campaign is a remarkable evolution from a year ago, when the crypto industry was reeling from a barrage of scandals and business failures, including exchange giant FTX’s implosion in late 2022.

FTX’s former chief executive Sam Bankman-Fried built significant political influence in Washington with tens of millions of dollars in donations during the 2022 election. He was convicted of a range of crimes related to his management of FTX and sentenced in March to 25 years in prison.

The fallout from his political donations continues. Just last month, a federal judge sentenced one of his top deputies to more than seven years in prison for making millions in political donations while at FTX, drawing on loans from Alameda Research and acting as a straw donor for Bankman-Fried.

The crypto market rebounded this year thanks in large part to the approval by US regulators in January of spot Bitcoin exchange-traded funds, drawing more investors to the most widely held cryptocurrency.

Choosing Sides

Armstrong recently touted a crypto advocacy website, which gave Brown an “F” grade and recommended Brown’s Republican opponent, Bernie Moreno, a longtime crypto advocate who founded a blockchain-based titling company. The website gives Tester a middling “C.”

Brown and Tester are feeling the pressure. Both senators bristled last week when asked about the issue, with Brown repeatedly saying he’s done enough talking to reporters about crypto and won’t negotiate in the press.

Tester, a frequent ally of the banking industry, said he’s stayed fairly neutral on crypto. “When I fully understand it, then we’ll deal with it,” he said.

Moreno, meanwhile, has courted the industry with his crypto experience. “I’m up against the most anti-crypto guy in America,” he said at a recent CoinDesk conference in Austin, Texas.

Tester’s Republican opponent, Tim Sheehy, blasted the Montana senator in posts on X, accusing Tester of trying to kill crypto. Sheehy called Bitcoin and cash “FREEDOM money.”

 Bloomberg Businessweek

CANADIAN CRIMINAL CRYPTO CAPITALI$T

Crypto tycoon is Canada's richest person, but U.S. prison stay awaits

Changpeng Zhao is Canada’s richest person, but the crypto tycoon is about to spend four months inside a U.S. prison.

Author of the article:Postmedia News
Published May 08, 2024 • 

Former Binance CEO Changpeng "CZ" Zhao arrives at U.S. federal court in Seattle on April 30, 2024. PHOTO BY JASON REDMOND / AFP /Getty Images

The 47-year-old Chinese-born businessman, founder of the world’s largest cryptocurrency-exchange Binance, ranks 30th in the world with a net worth of $40.5 billion as of Tuesday, according to the Bloomberg Billionaires Index.

Zhao’s family immigrated to Vancouver in the late 1980s when he was 12 after his father, a university instructor in China, was hired by the University of British Columbia

By 16, Zhao was learning how to code and eventually attended McGill University in Montreal where he majored in computer science.

After graduation, Zhao — also known as CZ — moved to Shanghai in 2005 and founded a technology startup company that automated high-frequency trading platforms and systems for stockbrokers.

In 2013, he learned about Bitcoin and was so enamoured by its potential that he invested all of his money in the cryptocurrency.

Four years later, Zhao launched Binance and his wealth exploded. He was named one of the richest people in cryptocurrency a year later by Forbes.

However, in March 2023, a federal lawsuit was filed by the U.S. Commodity Futures Trading Commission against Binance and Zhao, which accused the company and founder of breaking rules intended to thwart money laundering operations after alleging transactions by Palestinian militant group Hamas and other suspected criminals were using the crypto exchange

Fallen Crypto Mogul Sam Bankman-Fried Sentenced To 25 Years In Prison

FTX founder Sam Bankman-Fried was sentenced Thursday to 25 years in prison for a cryptocurrency fraud that a prosecutor has described as one of the biggest financial frauds in U.S. history. His parents left the courthouse without comment.

Three months later, Zhao and Binance were also sued by the U.S. Securities and Exchange Commission, accused of 13 violations of securities rules.

Zhao resigned as Binance CEO after pleading guilty last November to one count of failing to maintain an anti-money-laundering program. He was sentenced in April to four months in prison.

Binance agreed to pay $4.3 billion to settle related allegations from the U.S. government.

“I failed here,” Zhao told a Seattle court Tuesday. “I deeply regret my failure, and I am sorry.”

Zhao also agreed to a fine of $50 million while avoiding what a U.S. Justice Department’s request for three years behind bars upon conviction.

FTX says most customers will get all money back, less that 2 years after collapse

HUNTER: Billion dollar crypto crook Scam Bankman-Fried caged 25 years

In a letter to the court, Zhao wrote that there was “no excuse for my failure to establish the necessary compliance controls at Binance.”

“I wish I could change that part of Binance’s story,” he added. “But under my direction, Binance has now implemented the most stringent anti-money laundering controls of any non-U.S. exchange, and those controls have been in place since 2022.”

— with files from the Associated Press.

CRIMINAL CRYPTO CAPITALI$M

FTX has billions more than required to repay bankruptcy victims

FTX's recovery is aided by cryptocurrency resurgence and asset liquidation

ByMudit Dube

May 08, 2024

02:26 pm

What's the story

FTX, once a leading cryptocurrency exchange, has successfully gathered billions in surplus funds following its November 2022 collapse.This unexpected financial turnaround enables the firm to fully compensate its customers for their losses under its bankruptcy plan.Newly appointed CEO John Ray announced, "We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors."

Asset liquidation

FTX anticipates over $16 billion in cash post asset sale

Following the sale of all its assets, FTX expects to have up to $16.3 billion in cash available for distribution, according to a company announcement.The firm's debts total around $11 billion, owed primarily to customers and other non-governmental creditors.Earlier this year, the company had approximately $6.4 billion in cash due to a surge in cryptocurrency prices, including Solana, a token heavily backed by FTX's disgraced founder Sam Bankman-Fried.

Recovery process

FTX's recovery aided by cryptocurrency resurgence and asset liquidation

In addition to the cryptocurrency surge, FTX has also liquidated various other assets such as stakes in venture capital projects like Anthropic, an artificial intelligence company.Despite comparisons to the fraudulent collapses of Enron and Bernie Madoff's Ponzi scheme, no funds will remain for equity holders once all debts and interest have been fully paid.The task of locating the company's assets and deciphering a complex network of global accounts has been undertaken by restructuring advisers.

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Pending approval

FTX's revised reorganization plan awaits court approval

FTX's revised reorganization plan suggests that most creditors will receive approximately 118% of their claims within two months.The plan is yet to be approved by a US bankruptcy court, with Judge John Dorsey set to consider the creditors' vote when deciding whether to approve the plan later this summer.FTX declared bankruptcy in November 2022. Its founder swindled customers and investors out of billions, using the cash for personal gain and to cover his hedge fund, Alameda Research's debts.

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