Bitcoin, Blockchain, Battlestar Galactica

More Kramer-esque.

 

Earlier I mentioned Bucket Shops, a term for companies that deal in securities but don't actually buy and sell them. It can be a scam on unsuspecting stock purchasers, or it could be betting for people that like businessmen more than horses. As I said, very illegal in the US for a century.

But not in Europe or Israel. There it takes the form of something called Binary Options trading. You make bets on which way some security is going to move. Then you get something or nothing depending on events. They also do something called CFD's, which are similar except the winnings and losses are uncapped. But since they pick what you can take bets on, and they do the checks, good luck winning anything. And even if you do, these guys never pay up. These are horrible people. Running massive boiler rooms, they are connected to fraud, forgery, blackmail, and money laundering. After a 2016 expose by the Times of Israel, they were outlawed in that country. The first of those firms to be shut down was called UTrade.

So, why am I talking about non-crypto financial crime in the Battlestar Galactica thread? Because the people from UTrade ninja'd their money out and started up again in Cyrpus with a company called K-DNA. And when FTX wanted to expand to Europe, they couldn't get any regular bank to deal with them. So they bought K-DNA. And kept all the people to run FTX Europe.

So while SBF is running his "Ah shucks, I'm just a bad businessman, which is totally not illegal" media tour, we always have to remember that there is real premeditated criminality at the core of this. K-DNA is just one example. You don't accidentally pick people like that.

 

Famed wood nymph (and also former CEO of Alameda) Caroline Ellison was spotted in New York recently. I'm not sure why anyone in her position would be in the US, let alone New York right now. Unless they were making a deal with the Feds. The criminal case may be moving faster than I thought.

Also, SBF's dad has stopped teaching at Stanford and has turned his efforts to defending his sociopathic son. The criminal case may be moving fasterer than I thought.

 

Just saw this on the Yahoo landing page:



Looks like they are covering all their bets.

 

SBF of FTX has hired Mark Cohen as his attorney, per Reuters

Cohen recently defended Ghislaine Maxwell in her sex trafficking trial and defended El Chapo prior to that.

— unusual_whales (@unusual_whales) December 6, 2022

 

There’s a joke there somewhere, but goddamit, I can’t find it. The basic construct is that his clients keep getting sleazier, so the next step for Cohen would be defending Trump. Or Ted Cruz. Or Chicago pizza.

I can’t stick the landing.

 

I would go with the devil saying "Even I don't want that asshole as my advocate", or something along those lines

 

Who are the the Winklevoss twins? This isn't a rhetorical device - I really don't know. I never watched that Facebook movie. I gather they are guys with lots of money who are looking for ways to take even more money from nerds because they really hate them. And they may have pulled it off in a big way. At least, this is the story I hear.

So there is this stablecoin called the Dai run by a decentralized organization of true believers called MakerDAO. And the way it works is that you can borrow Dai by overcollateralizing with Etherium. As I've mentioned before, this is a great mechanism for speculators - they keep the Etherium (although it is temporarily locked up) and so they get the benefit of whatever it does while they deal in other coins or systems. But not many trading places take Dai. So MakerDAO has a second service - they have a large store of fairly respected stablecoins (doesn't matter which ones - not Tether) and you can trade one-for-one with Dai. And now it's easy to go speculate.

Now Winklevoss & Winklevoss. They run an exchange called Gemini (ooh... I just got it). They have their own stablecoin (because everyone does) called GUSD. So a few months ago they go to MakerDAO and say "hey, we are based in the US so we are obviously not a scam. Can you also deal in GUSD? You will be promoting a new crypto ecosystem and we'll make it worth your while". And they agree.

So now the twins Winklevoss do The Great Crypto Maneuver™. They mint a butt ton of brand new unbacked GUSD, make a massive loan collateralized with that crap, and pull out around $460 million in stablecoins actually worth something. Good luck collecting on that, nerds.

 

There is a large company called Digital Currency Group. They own lots of large crypto-related companies, such as an exchange, a trading firm, and a crypto news web site (which is honestly the only valuable thing they have now). But they recognized that trading Bitcoins is a little difficult - trades are slow and expensive and keeping them yourself is risky. So they also invented Greyscale, which was supposed to be an ETF which traded stocks on an exchange with nominal market cap equal to the massive store of Bitcoins they held. This way people could speculate on Bitcoins using fast, cheap stock exchanges.

But Greyscale was never granted full ETF status, so it kind of fizzled. And the large store of Bitcoins were held in the Digital Currency Group's own exchange. DCG was trying really hard to create the crypto economy, so they have their fingers in a lot of pies. Turns out all the pies were rotten. Once flush with cash, now all of DCG is in trouble. With their capital dwindling, that big pile of fairly liquid coins must have looked like a tasty sandwich.

If the coins still existed, it should be a simple matter to tell people the address and see it's there. They have not done that.

 

Sucks to have raised AND ENABLED a sociopath then.

 

Yeah, they weren't complaining when they got that multi-million dollar vacation home. You would think some of the greatest business lawyers in the US would know you don't get billions from thin air. I'm a moron and I know that. Somehow they let their son bamboozle them, which is also something that should be difficult to do to some of the greatest business lawyers in the US.