By SRH,
Do not wear yourself out to get rich; do not trust your own cleverness. Proverbs 23:4
You should know that some of the smartest brains in investment and technology have investigated crypto and found it to be a scam.
NYU professor and economist Nouriel Roubini summarized his results in July 2019:
Cryptocurrencies are NOT currencies. They’re a joke…Bitcoin dropped 30% in a week. It rises 20% one day, then falls. Bitcoin can only process five transactions per second, hence nobody, including this blockchain conference, accepts it for conference costs. The Visa system allows for 25,000 transactions per second.Crypto’s bullshit. It fails. No one uses it for transactions. Trade one sh*tcoin for another. The entire trading or currency arena includes price manipulation, spoofing, wash trading, pump and dump, and frontrunning. A massive criminal swindle, nothing else.”
Over 1,600 computer scientists, software engineers, and technologists from around the world wrote to key members of Congress and the Senate Banking and House Financial Services Committee Chairs on June 1, 2022, disputing crypto’s financial value. The letter was signed by 45 Google professionals, 19 Microsoft experts, 11 Apple experts, and Ph.Ds from top colleges including Oxford and MIT. This is what specialists told Congress:
Many in the crypto-asset business argue that these technologies are a positive financial innovation that can solve the financial issues of regular Americans. We disagree with this narrative.
As software engineers and technologists with extensive experience, we question recent assertions regarding blockchain technology’s originality and promise. Transaction reversal and data privacy are opposed to blockchain technology and will not be added. Blockchain does not allow human-in-the-loop transaction reversal or fraud mitigation, which public financial technology must have.
Last February, the Wall Street Journal published Charlie Munger’s 393-word crypto OpEd. After his death in November at 99, Munger urged the U.S. to outlaw crypto like China and other nations. Munger wrote:
“A cryptocurrency is not a currency, commodity, or security. Instead, it’s a gambling contract with a nearly 100% house edge in a country where only lax states regulate gaming contracts. Naturally, the U.S. should pass a new federal legislation to prevent this.”
After the FTX crypto exchange and Sam Bankman-Fried and his colleagues committed one of the largest financial frauds in U.S. history, billionaire crypto investors still influence too many members of Congress in exchange for large political donations.
Crypto billionaires got exponentially more risky in February and March. They agreed to eliminate Congresswoman Katie Porter from the Senate race. What did Porter do to crypto? Porter, Senator Elizabeth Warren, and other Democrats investigated the risks of crypto, energy use, and global warming in January 2022. A news release summarized their concerns:
Bitcoin is the largest cryptocurrency by market size, and the US mined 35% of it in July 2021, up from 4% in August 2019. This share of mining is expanding faster after China’s crypto-mining crackdown, which forced 500,000 mining companies to move. This might put North America above 40% of the worldwide Bitcoin mining computing power. As crypto-mining grows in the US, significant carbon emissions and energy price impacts raise concerns. “A recent study estimated that crypto-mining in upstate New York raised annual electric bills by $165 million for small businesses and $79 million for consumers.”
The outspoken Porter, with her whiteboard and Harvard Law degree, could have caused more crypto issues in the Senate than in the House. In order to exclude Porter from Senate consideration, a small number of crypto millionaires spent $10,041,118.54 on highly deceptive attack ads saying she was collecting money from Big Oil, Big Pharma, and Big Banks. Next January, Porter’s House term ends, so she won’t be a problem for crypto in the Senate or House.
The Orwellian, reverse-speak Super Pac “Fairshake” funded the attack commercials, which it did not want to hand Porter.
According to Federal Election Commission records, Fairshake received $92.87 million in political contributions as of April 30, most of which came from a handful of tightly-linked crypto interests associated to Coinbase. Over $51.5 million from Coinbase and Coinbase Commerce accounts for 55% of Fairshake’s total receipts.
Entrepreneur Marc Andreessen of Andreessen Horowitz (AH Capital Management) invested $9.5 million in Coinbase. Ben Horowitz, his AH Capital Management partner, added $9.5 million.
AH Capital Management contributed $19 million to avoid looking like fools after Coinbase’s large donation.
Coinbase Chairman and CEO Brian Armstrong gave Fairshake $1 million. Fred Wilson, Coinbase’s Lead Independent Director, gave Fairshake $1,047,540.
Fairshake has received 98.5 percent of its funds from Coinbase.
Porter’s defeat doesn’t seem to end Fairshake’s chances. Sherrod Brown (D-OH), Chair of the Senate Banking Committee, and Jon Tester (D-MT) are also crypto doubters vying for re-election.
Fairshake has spent $40.6 million of its $92.87 million.
The Senate Banking Committee convened a hearing on consumer financial fraud last Thursday. Montana Senator Jon Tester testified: “Every day, every day, I either get an email or a phone call from somebody who’s trying to screw me out of my money.”
The FBI estimates that many of those trying to defraud you and Senator Tester are crypto fraudsters. On September 9, the FBI released their 2023 crypto fraud report, which found:
The FBI Internet Crime Complaint Center (IC3) received over 69,000 public complaints about cryptocurrency-related financial crime in 2023. Cryptocurrency-related losses exceeded $5.6 billion.”
“While cryptocurrency-related complaints make up only 10% of financial fraud complaints, they account for almost 50% of losses.”
The decentralized nature of bitcoin, the rapidity of irreversible transactions, and the capacity to transfer value globally make it appealing to criminals while making it difficult to retrieve stolen assets. Wall Street On Parade bolded “irreversible”.
“Once a payment is made, the recipient owns the cryptocurrency and often quickly transfers it overseas for cash out.”
In other parts of the paper, the FBI explains why crypto transactions’ irreversibility attracts crooks. The text says:
Irrevocable, Fast Transactions: Transferring cryptocurrency is possible anywhere. The sole conditions for sending funds from an address are an Internet connection and the private key, which acts as a password or PIN. Transactions are irrevocable and not mediated by third parties. Criminal actors linked to the Internet worldwide can use these qualities to allow large-scale, practically immediate cross-border transactions without typical financial intermediaries that use anti-money laundering systems.
Consider that there are no anti-money laundering compliance personnel or ability to reverse transactions like banks can. This seems like a good criminal platform.
According to the FBI data, crypto fraudsters target persons over 60 the most. Crypto fraud cost seniors $1.6 billion in 2023, 29% of the $5.6 billion lost.
FBI Crypto Complaints
Given the growing role of crypto in fraud against the most vulnerable U.S. citizens, Republican presidential candidate Donald Trump’s announcement last evening that he and his family are launching World Liberty Financial is questionable.
Yesterday, CNBC reported on the new crypto firm:
Barron Trump was named ‘Chief DeFi Visionary’ in an early internal study, or white paper, obtained by CoinDesk. Eric and Donald Jr. as ‘Web3 Ambassadors,’ Trump Sr. as ‘Chief Crypto Advocate.’
The Trumps will receive remuneration, but the platform is ‘not owned, managed, controlled or sold’ by them.
World Liberty Financial is run by real estate mogul Steve Witkoff and Trump Organization executive vice president Eric Trump, according to a source. Both are crypto novices.”
This was the second attempt on Trump’s life since July, and Witkoff was playing golf with him at his West Palm Beach golf club on Sunday.
Dishonest money dwindles away, but whoever gathers money little by little makes it grow. Proverbs 13:11
Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” Hebrews 13:5
