https://wallstreetonparade.com/2024/06/crypto-just-got-exponentially-more-d…
By Pam Martens and Russ Martens: June 11, 2024 ~
The first thing you need to know about crypto is that some of the smartest
minds in investment and technology have studied crypto carefully and
determined it’s a total sham.
In July 2019, NYU Professor and economist Nouriel Roubini summed up his
findings like this:
“Crypto currencies are not even currencies. They’re a joke…The price of
Bitcoin has fallen in a week by how much – 30 percent. It goes up 20
percent one day, collapses the next. It is not a means of payment, nobody,
not even this blockchain conference, accepts Bitcoin for paying for
conference fees cause you can do only five transactions per second with
Bitcoin. With the Visa system you can do 25,000 transactions per
second…Crypto’s nonsense. It’s a failure. Nobody’s using it for any
transactions. It’s trading one sh*tcoin for another sh*tcoin. That’s the
entire trading or currency in the space where’s there’s price manipulation,
spoofing, wash trading, pump and dumping, frontrunning. It’s just a big
criminal scam and nothing else.”
On June 1, 2022, more than 1,600 computer scientists, software engineers
and technologists from around the world sent a letter to key members of the
U.S. Congress and to the Chairs of the Senate Banking and House Financial
Services Committees, disputing that crypto was a worthwhile financial
innovation. Among the signatories to the letter were 45 experts who worked
at Google; 19 from Microsoft; 11 from Apple; and Ph.Ds from the most
prestigious universities in the world, including Oxford and MIT. These
experts told Congress the following:
“We strongly disagree with the narrative — peddled by those with a
financial stake in the crypto-asset industry— that these technologies
represent a positive financial innovation and are in any way suited to
solving the financial problems facing ordinary Americans…
“As software engineers and technologists with deep expertise in our fields,
we dispute the claims made in recent years about the novelty and potential
of blockchain technology. Blockchain technology cannot, and will not, have
transaction reversal or data privacy mechanisms because they are
antithetical to its base design. Financial technologies that serve the
public must always have mechanisms for fraud mitigation and allow a
human-in-the-loop to reverse transactions; blockchain permits neither.”
In February of last year, the Wall Street Journal gave the iconic investor,
Charlie Munger, space for a 393-word OpEd on crypto. Munger, who died in
November of last year at age 99, used the space to urge the U.S. to ban
crypto, as China and numerous other countries have already done. Munger
wrote this:
“…A cryptocurrency is not a currency, not a commodity, and not a security.
Instead, it’s a gambling contract with a nearly 100% edge for the house,
entered into in a country where gambling contracts are traditionally
regulated only by states that compete in laxity. Obviously, the U.S. should
now enact a new federal law that prevents this from happening.”
But even after the FTX crypto exchange and Sam Bankman-Fried and his
colleagues perpetrated one of the largest financial frauds in U.S. history,
billionaire investors in crypto companies are still getting their way with
far too many members of the U.S. Congress in exchange for fat political
contributions.
In February and March, the crypto billionaires became exponentially more
dangerous. They decided they were going to knock Congresswoman Katie Porter
out of the running for a U.S. Senate seat. What was Porter’s transgression
against crypto? In January 2022, Porter had joined with Senator Elizabeth
Warren and other Democrats in Congress in investigating the inherent
dangers between crypto, energy usage and dangerous heating of the planet. A
press statement summarized their concerns as follows:
“Bitcoin is the largest cryptocurrency by market cap, and the United
States’ share of Bitcoin mining increased from 4% in August 2019 to 35% in
July 2021. This share of mining is growing even more rapidly after China’s
crackdown on cryptomining, which left 500,000 mining operations looking for
new locations. This could push North America to represent over 40% of the
total global computing power dedicated to mining Bitcoin. As more
cryptomining operations proliferate in the United States, the extraordinary
energy use raises alarms about massive carbon emissions and the impacts of
this energy consumption on consumer energy prices. A recent study estimated
that cryptomining in upstate New York raised annual electric bills by about
$165 million for small businesses and $79 million for consumers.”
The famously outspoken Porter (armed with her whiteboard and Harvard Law
degree) could have posed a bigger problem in the Senate than she already
does for crypto in the House. So a small group of crypto billionaires
decided to simply take Porter out of contention for a Senate seat by
spending an acknowledged $10,041,118.54 on grossly misleading attack ads
against Porter, falsely claiming she was taking money from Big Oil, Big
Pharma and Big Banks. Because Porter’s House term is up in January, she
will no longer be a problem for crypto in either the Senate or House come
next year.
The funding for the attack ads came from a Super Pac with the Orwellian,
reverse-speak name of “Fairshake” – exactly what it did not want to give to
Porter.
As of April 30, Fairshake has taken in $92.87 million in political
contributions with the vast bulk of that coming from a handful of
tightly-linked crypto interests related to the crypto exchange — Coinbase —
according to records at the Federal Election Commission. Coinbase and its
payments arm, Coinbase Commerce, contributed over $51.5 million — 55
percent of the total of all receipts at Fairshake thus far.
A major investor in Coinbase, Marc Andreessen, of the venture capital firm
Andreessen Horowitz (a/k/a AH Capital Management), chipped in $9.5 million.
His partner in AH Capital Management, Ben Horowitz, added another $9.5
million.
Not wanting to look like pikers – given the huge sum contributed from
publicly-traded Coinbase – AH Capital Management itself chipped in $19
million.
The Chairman and CEO of Coinbase, Brian Armstrong, handed Fairshake a cool
$1 million. The Lead Independent Director on the Board of Coinbase, Fred
Wilson, gave Fairshake $1,047,540.
Coinbase-related contributions to Fairshake represent 98.5 percent of its
total receipts thus far.
Unfortunately, knocking out Porter does not appear to be game-over for
Fairshake. Two other Senators who are crypto skeptics are running for
re-election: Senator Sherrod Brown (D-OH), Chair of the powerful Senate
Banking Committee, and Jon Tester (D-MT).
Fairshake has thus far spent just $40.6 million of its $92.87 million haul.
