I’m sick of cryptocurrency shills.
Everyone from Sam Bankman-Fried, the Winklevoss twins, and Mark Cuban to losers like Voyager Digital and Terraform Labs – I am sick of them all for misleading investors into believing fortunes can be made in tokens when they know the space is a sewer of criminal intent.
How else do you explain the massive failures of so-called genius projects and the implosions of so-called anchored-to-the-US-dollar stablecoins? And the loss of billions of dollars?
I don’t buy the idea that everything that’s wrong in crypto-land is the result of the investment space’s growing pains. Rather, I believe what we are seeing is old-fashioned, white-collar criminal intent.
Caught Knee-Deep in Lies
Last week the FDIC (that’s the Federal Deposit Insurance Corporation, the government agency that insures customer deposits at recognized and chartered US banks) sent out cease and desist letters to a handful of firms who may have inadvertently (NOT) misled their customers trading on their platforms – people who rely on the honesty and guidance these firms provide.
Many of this customers wrongly believed that their funds were protected by FDIC insurance, and the FDIC wants to put an end to the lies.
The biggest name that got a letter was Brett Harrison, the president of FTX US – the Sam Bankman-Fried-owned crypto brokerage catering to US customers. Here’s what the FDIC called Harrison out on…
The letter stated, “It appears that on July 20, 2022, Mr. Harrison published a tweet […] which stated, among other things, ‘direct deposits from employers to FTX US are stored in individually FDIC-insured bank accounts in users’ names and stocks are held in FDIC-insured and SIPC-insured brokerage accounts.'”
Harrison is implying that FTX US is FDIC insured and as the letter to Harrison states, he’s essentially saying, “that funds deposited with FTX US are placed, and at all times remain, in accounts at unnamed FDIC-insured banks, that brokerage accounts at FTX US are FDIC-insured, and that FDIC insurance is available for cryptocurrency or stocks.”
Customer funds or crypto held at FTX aren’t insured by the FDIC or SIPC. When funds are deposited at FTX US or reside there in any form, they’re not covered by any insurance. Period. When US dollar funds are transferred and held in the customer’s name at an FDIC-insured bank that FTX US links to customers’ brokerage accounts, then they’re insured.
How the president of a brokerage could say, or even imply, customers of FTX US are insured is mind-boggling. Either he doesn’t know what he’s talking about (which is scary) or he knows exactly what he’s saying. There is a chance Harrison intended to imply customers who had their employers directly deposit paychecks into FTX US were automatically insured, and when they hold crypto they’re insured.
That’s criminal in my book. If any president of any US brokerage house said anything like that, he or she would be pilloried publicly and sacked instantly.
Two other firms that got cease and desist letters were Smartasset.com and Cryptosec.com. Both sites offer up a list of FDIC-insured exchanges, including FTX US, Crypto.com, LUNO, Robinhood, and Voyager Digital. None of those are FDIC-insured. And anyone that thought Voyager was FDIC-insured and was lured into Voyager by one of those sites, now knows they’re screwed since Voyager failed spectacularly.
Cryptosec.com, which should have been shut down by the SEC for using sec in their domain name and implying they’re either part of, sanctioned by, or approved by the Securities and Exchange Commission, says they’re a “web resource focused on providing non-technical information to help beginners learn how to protect their funds against hacks and scammers.” Steering beginners to FDIC-insured brokerages, that aren’t insured, especially if either of these two sites are remunerated in any way against accounts they “introduce” to any of the brokerages they tout as FDIC-insured, is criminal intent in my book.
Last but certainly not least, FDICcrypto.com got a C&D letter. The egregiousness of using FDIC in your domain name is bad enough, and obviously the FDIC didn’t find that funny, but this site really is funny.
Not funny as in haha, funny as in when you go to that site you’re redirected to another site, which is funny, again not in the haha sense, in the “I can’t believe the site is so asinine as to ever fool anybody, of anything.” But it does try.
You end up at CH’s Service Provider Erie Inc Corporation site. You have to go there for a laugh. Though its not funny that CH, Corey Harris, is hawking a cryptocurrency on that site. What is funny, as in ha ha for real, is his cryptocurrency isn’t even digital, it’s a paper note with denominations on it, like a real dollar bill, a perforated stamp that’s supposed to legitimize it, and ha ha, a picture of Mr. Harris.
It would be funny if the intent wasn’t criminal.
What’s also not funny is how Congress has been pushing back on regulators, all of them, to not wade into regulatory waters concerning crypto. Why? Because a lot of members of Congress own cryptos and are inundated by lobbyists throwing money at them from crypto companies, issuers, brokerages, and organizations convened to shelter crypto crusaders from regulation.
That’s criminal too, in my book.
With so much criminal intent inherent in the crypto space, something, some shoe or boot is going to drop and crypto holders are going to panic, and run for the exits, all at the same time. And there won’t be any bidders to stay the execution of speculators and issuers, and hedge funds, and institutions who’ve all been duped into believing cryptocurrencies are the future.
They’re not. They’re just speculative fiat instruments with no intrinsic value and no future, unless prudential regulation makes them safer.
And I say, good luck with that.
In my subscriber service we’re making money, sometimes triple digit gains, buying put spreads on the likes of Coinbase and Robinhood – “waterfalling” those trades by rolling them over and over again.
You might want to play the next shoe dropping in crypto land by doing the same.