I don’t like saying ‘I told you so,’ but I can’t help but notice all the ‘crypto bros’ who thought themselves above the law are slowly but surely being shown the error of their ways.
I caught some of the interview that Three Arrows Capital (3AC) co-founder Kyle Davies gave to journalist Laura Shin last week. Davies has some nerve giving long-form, on-camera interviews, considering that 3AC’s mid-2022 bankruptcy led to billions of dollars in losses for both institutional and retail investors.
But despite a well-documented history of self-interested dealing by Davies and his 3AC partner Su Zhu, Davies expressed zero remorse for his actions. In fact, he showed something resembling pride in acknowledging his lack of cooperation with the authorities looking into 3AC’s demise.
Following the interview, Davies suggested that he and Su “devoutly believed in up only forever. Still do.” Davies implied that companies that trusted their money to 3AC’s leadership had only themselves to blame, having chosen to “gamble their own low-risk client’s funds on a high-risk thesis.”
Let’s be clear: believing in ‘up only forever’ isn’t high-risk, it’s insanity. And yet, Davies and Su have gone on to launch new ill-fated ‘crypto’ projects, seemingly convinced that they can just go on stealing forever without consequences (or in Su’s case, a brief stay in a Singapore prison cell for trying to skip town before investigators were done probing 3AC’s collapse).
Listening to Davies justify all his crimes while wearing a smug, self-satisfied grin, all I could think of was that psycho-Goofy meme “I’ll f*ckin’ do it again.” That might as well be the motto of the broader ‘crypto’ sector. Or at least it was, until legal authorities around the globe finally realized that they already had laws on their books to take action against old-fashioned criminals using high-tech tools to rob people blind.
The ever-expanding criminal lineup
Former FTX blunderkind Sam Bankman-Fried (SBF) will be sentenced later this week for the crimes that led to FTX’s demise. Like Davies, SBF has shown little remorse for his actions, despite a flood of victim impact statements detailing the very real harm inflicted by his belief that he was above the law. SBF could be looking at decades behind bars, a scenario that still might fail to satisfy the masses baying for his blood.
Next month, a similar day of reckoning awaits Changpeng Zhao (CZ), founder of the Binance exchange. CZ thought ‘crypto’ was so unique and special that he could ignore any and all rules that interfered with his profits. That history will boomerang back on him big time when the judge announces how long CZ will have to spend in a U.S. prison cell.
Further down this road, Alex Mashinsky, former head of the Celsius Ponzi scheme, will face his own legal reckoning. Ditto for Richard Heart, whose performative luxury shopping sprees helped him fleece countless Hex ‘investors.’
Davies, SBF, Mashinsky, Heart, Digital Currency Group’s Barry Silbert and countless others are all charter members of crypto’s ‘I’ve done nothing wrong’ ethos. It’s like some malignantly narcissistic superpower (more The Boys than The Avengers).
Then there’s all the crypto casinos posing as exchanges (Coinbase (NASDAQ: COIN), Kraken,), hawking lottery tickets to the masses who’ve somehow been led to believe that token values travel in an ‘up only forever’ trajectory. These casinos rely on a steady stream of purpose-free shitcoins, new versions of which—thanks to Solana—are being created every minute. Incredibly, there are those who believe 2017’s initial coin offering (ICO) debacle deserved an encore.
Lurking behind all of this is Tether, without which the entire ‘crypto’ ecosystem would be exposed as a Potemkin village of wash trades and wafer-thin liquidity. Regardless of whether USDT is fully backed by real-world assets, Tether’s bigger challenge is shedding its well-earned reputation as the common coin of money launderers, drug traffickers, pig-butchering scammers and, yes, Islamic terrorists.
And last week brought word that the U.S. Securities and Exchange Commission (SEC) was investigating the Ethereum Foundation, reportedly due to the SEC’s belief that ETH is an unregistered security. A centralized authority issuing a token (mostly to themselves) whose value is projected to rise based on that same authority’s efforts, and now rewards a small core of ETH whales (also mostly themselves) for validating network transactions? You mean that unregistered security? Huh…
Flawed tech leads to flawed goals
The ICO encore is proof of the dearth of development that the overall blockchain sector has demonstrated over the past decade. With their technology unable to scale, these stunted blockchain backers are left recycling the same old scams. It’s perhaps even more outrageous that people continue to fall for these warmed-over grifts, but P.T. Barnum may have underestimated the size of the problem.
All that said, I take solace in the old adage that the wheels of justice turn slowly but grind exceedingly fine. Crypto bros may be forever trapped in a state of arrested adolescence, but it’s encouraging to see some of these overgrown adolescents being actually arrested and threatened with more than losing access to their PlayStations for a week.
I take even greater solace in the ethical way the BSV Blockchain has operated since its launch as the original Bitcoin in 2009. The Bitcoin white paper was never the declaration of war on traditional finance that so many anarchists tried to portray it as, and BSV sees no inherent contradiction between its revolutionary technology and existing financial/legal guardrails.
For instance, BSV believes that victims of crime shouldn’t be forced to accept their losses
because of some quasi-religious adherence to the mantra of ‘not your keys, not your coins.’ The concept of justice should not take a back seat because some self-anointed high priests of tech don’t think you’re smart enough to join their club.
BSV’s possibilities continue to expand with the long-awaited launch of the Teranode scaling solution. Teranode will allow the BSV Blockchain to vastly exceed the transaction-per-second limits of Visa and Mastercard, while doing so at a fraction of the costs of these ‘mature’ networks.
Teranode’s overlay services will add even greater functionality to network nodes, while ensuring faster, more efficient transaction processing. Combined with BSV’s unparalleled, immutable data storage capacity, enterprises and governments continue to discover real-world, big-data solutions unavailable on any other chain.
I’m in no way surprised that BSV is still regularly attacked by its rivals. BSV embarrasses the developers behind the other networks, who refuse to accept the fact that enterprise blockchain technology is capable of so much more than recreating feudalism with (naturally) themselves as the lords.
BSV’s commitment to honoring the unilateral contract laid down by Satoshi Nakamoto will further set BSV apart from the pretender chains that offer the world little beyond false promises of instant wealth. I’ve only ever been in this space for the technology. With the criminals being pushed back into the shadows, maybe the world will finally be able to see the wealth of benefits this technology has to offer.
After so many years of anarchy ruling the digital asset space, I’m encouraged by the restoration of sanity and the reassertion of the rule of law. BSV’s longstanding adherence to the rules will hold it in good stead when the authorities finish dealing with the unrepentant criminals still clinging to their anarchic fantasies. Goodbye and good riddance.
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