SBF Case Reveals Unprecedented Corruption of the United States
The brilliant bitcoiner and entrepreneur Balaji Srinivasan has just published a scathing critique of the American State’s handling of the FTX case. According to him, the SBF affair reveals the enormous level of corruption within the establishment.
The system did nothing until the internet revealed everything
Have you ever seen those superhero movies where Batman tracks down the villain and leaves him tied up in cables for the police to clean up? That’s what happened with Sam Bankman-Fried.
The internet tracked down the scammer, collected indisputable evidence, and delivered him gift-wrapped to the government.
Now that he has been convicted, we have been subjected to a strange rewriting of history in which it is obvious that the system worked because it was pushed by Twitter to pursue an obvious scammer.
And yes, it’s Twitter that pushed the government to act.
How do we know this? Because the whole affair was revealed on Crypto Twitter, from start to finish.
Crypto Twitter is very important
NYT, Congress, Bloomberg, Axios – all these establishment organs failed where Coindesk, Bankless and Crypto Twitter succeeded.
Not a single corporate journalist, politician, regulator, or police officer thought to investigate SBF until Erik Voorhees smelled a rat and Ian Allison found the rat.
So: yes, the only reason why SBF was exposed, is because people were posting messages on Twitter. Twitter is important! This is why the regime did not want Trump to post there, does not want you to post there, and does not want Elon to let you post there.
As early as the Arab Spring, it became clear that Twitter could overthrow regimes.
Zero points for the system
No, the system did not work.
Politicians failed, journalists failed, and regulators failed. The criminal justice system eventually succeeded, but only after failing everywhere else – and even then, only after the internet built the entire case for them.
Why do we say that the system failed?
- Let me know when politicians whom SBF helped elect with stolen funds will submit their resignations, starting with Biden.
- Let me know when the journalists who supported SBF will publish their mea culpa.
- Inform me when the regulators who attacked Bitcoin ETFs while meeting with SBF will admit they are incapable of regulating.
- And tell me when the State will admit that it only pursued the case after the internet gathered incontrovertible evidence of his guilt, cutting short his many deceptions.
Obviously, none of this will ever happen. The money stolen by SBF helped tip elections across the country. The bad guys got away once again.
Fortunately, we have the internet. And as we’ll see in detail, it is this decentralized network that truly trapped SBF, not the centralized state.
The failure of politicians
Let’s remember that SBF was the second biggest donor to the Democrats after Soros himself.
It’s recognized that he was one of the main reasons Joe Biden made it to the White House, with what is now acknowledged as stolen money.
Democrats like Maxine Waters praised him for his “candor” and “welcomed” him to testify before Congress, even after his fraud became public, and literally blew kisses to him during Congressional hearings.
Ms. Waters, the current Chairwoman of the House Financial Services, said she was “surprised” that SBF was arrested before having the prestigious chance to plead his case before Congress. Why was she surprised?
Perhaps because SBF had worked closely with her and others to take over the regulatory state, through a bill that would have criminalized decentralized finance but would have profited SBF’s personal finances.
So politicians failed in their mission, which is to pass laws in the public interest. SBF legally bribed them to pass a law that would favor his centralized business at the expense of all others, similar to what happened with AI.
The failure of journalists
Don’t forget that SBF was the darling of the mainstream media. Journalists like David Yaffe-Bellany, of the New York Times, relentlessly defended SBF before, during, and even after his monstrous scam was revealed to the public.
In fact, the New York Times not only supported SBF after millions had learned he had stolen billions, it even cheered him on wholeheartedly!
The contrast with other cryptocurrency reporting could not be more striking. For years, the media’s message has been that bitcoin was a fraud, but Bankman-Fried was a friend. He funneled stolen money to NGOs and media such as Semafor and ProPublica, and in return, they named him “JP Morgan of crypto”.
So journalists completely failed in their mission to inform the public.
The failure of regulators
Regulators also failed in their mission to:
- expose frauds
- give the go-ahead to reliable projects
Instead, they spent their time meeting with SBF while attacking Bitcoin ETFs. Why? Probably because SBF lobbied for more regulatory power and greased the palms of the right politicians.
So the regulators granted him special favors, like private meetings, and Congress steered cryptocurrency regulation according to his preferences.
The success of the internet
And what exactly did these curious youngsters on the internet do? They blew the case wide open.
It all started with crypto investor Nick Tomaino, who tweeted that FTX seemed suspect in both its trading activity and its political lobbying. It continued with Erik Voorhees, who politely confronted SBF on the crypto podcast Bankless. Finally, the publication by Coindesk of an article by Ian Allison on SBF’s shenanigans, which blew the fraud wide open, marked the climax of the story.
Citizen journalists outshone the traditional media in covering the implosion of FTX.
Satoshi > SBF
Following the revelations from Coindesk, events moved quickly.
Binance CEO Changpeng Zhao sold his stake, SBF claimed the assets were in good shape, and the community immediately tested his claims.
And it is this “fact-checking” that put him out of business.
Indeed, thanks to Satoshi’s invention, Samuel Bankman-Fried could not continue the fraud by creating fake funds on his centralized server, as he did for his trading company. When millions found out they couldn’t transfer their money to a decentralized blockchain, the illusion collapsed, just like his platform.
One cannot stress enough that no journalist, politician, regulator, or police officer discovered Bankman-Fried’s fraud! Only the blockchain did. Until the very end, SBF was saying that “FTX is fine, the assets are fine”.
But thanks to what the blockchain represents, millions of people around the world were able to independently verify the facts by testing their ability to withdraw their funds and then viewing the results on the chain.
SBF could deceive a bankrupt state, but he met his match in the decentralized network. He couldn’t allow withdrawals because he wasn’t solvent.
The network versus the State
In short: the network succeeded where the State failed. It was Crypto Twitter that asked tough questions, did citizen journalism, found the irrefutable proof in the form of insufficient onchain balances, and posted this proof on the internet.
It’s the network that was able to reach a firm decentralized consensus that he had no money, even as State loyalists continued to depict SBF as a “billionaire”.
From that point, the police only mopped up, slowly and with reluctance.
Bitcoin tells the truth, SBF lies
As we’ve mentioned, the internet had cryptographic proof that SBF was a criminal when FTX stopped withdrawals and his BTC balance on the blockchain dropped from 20,000 to 1.
SBF and his associates continuously lied to the public during that time by saying they had lots of funds, but the reason he couldn’t authorize withdrawals is that he couldn’t lie to the Bitcoin blockchain.
Millions of witnesses could independently confirm that SBF had stolen their money by monitoring the Bitcoin and Ethereum blockchains. Like Batman, the internet volunteers had delivered SBF to the police, tied up and with indisputable evidence pinned to his chest.
And then… nothing. For weeks, SBF did his Good Morning America tour. He received flattering coverage from New York Times’ Yaffe-Bellany.
And he was left free to wander, tweet, and spread uncertainty for weeks.
We don’t trust the police
We don’t trust the police. After all, thanks to Soros prosecutors, crime is de facto legal in major American cities. Hard drugs are sold in public. Supermarkets and trains are plundered in broad daylight. Car windows are smashed and everything is seized. Crowds block roads and invade pedestrians during BLM/Hamas meetings. And the police do nothing.
So, no, we do not trust the police. And there’s no cause for boasting that the criminal justice system eventually got, reluctantly, the right result after massive international public pressure on an obvious fraudster who stole ten billion dollars in broad daylight.
That’s the bare minimum of what the State is supposed to do! It doesn’t deserve a cookie.
Justice delayed in the face of SBF
Now let’s get to the second point: could SBF have been arrested sooner?
Because for weeks, after millions could publicly prove he had stolen their money, SBF was invited to speak at NYT conferences, to testify before the U.S. Congress, and generally to add a lot of uncertainty about whether justice would ever be served.
Countless state apologists went on Twitter claiming that this was simply the fastest procedure and that the poor masses just don’t understand legal proceedings.
Against that, we will only make three remarks.
Alexey Pertsev was imprisoned without charges for several days
Firstly, a true freedom fighter like the founder of Tornado Cash, Alexey Pertsev, was arrested two days after OFAC summarily invented a new controversial interpretation of an existing law.
He was held without charge for writing code. This kind of rapid action is not an isolated incident.
We therefore know that the State can act quickly when it wants to.
The state can put millions of innocent people under house arrest for an indefinite period, but it can’t put the SBF under house arrest?
Thirdly, let’s stop joking. Are we really to believe that a government that can invent justifications for watching you without a warrant or seizing your property without charge couldn’t detain SBF before trial?
Are you telling me that a state that has put hundreds of millions of people under house arrest couldn’t quickly put SBF under legal arrest?
In reality, where there’s a will, there’s a way. The U.S. state can break any law it wants to, as evidenced by its systematic use of civil forfeiture, warrantless surveillance or undeclared war. Likewise, it can claim to be hamstrung by law when it wants to proceed slowly.
And that’s exactly what it did!
The fact that a full month elapsed between November 11, 2022 (when it became clear that SBF had stolen billions from its customers) and December 12, 2022 (when SBF was finally arrested), while much of the establishment rushed to support SBF along the way (like Congress and the New York Times), is what rightly aroused the suspicions of the general public.
What have we learned from the SBF affair?
- We learned that Crypto Twitter broke the story wide open, exposing Bankman-Fried in the first place, imputing massive responsibility for the Democratic Party and in the end forcing the regime to take action against its number 2 donor.
- We learned that citizen journalism had outmaneuvered the mainstream media in this case, and that the New York Times and Congress appeared to be involved in covering up the crime.
- We learned that regulators are incapable of distinguishing good projects from frauds: they weren’t considering any action on SBF, while they weren’t taking any steps to approve Bitcoin ETFs.
- And we learned that no journalist, politician, regulator or policeman reported SBF before its stolen money rocked elections across the country, elections that will never be overturned. The investors who put money into FTX lost their shirts, but the politicians who took money out of FTX will keep their seats.
The only reason we’re here is that the network has succeeded where the state has failed. No journalist, politician, regulator or policeman realized that SBF was a criminal. But the Internet did.
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Chaque jour, j’essaie d’enrichir mes connaissances sur cette révolution qui permettra à l’humanité d’avancer dans sa conquête de liberté.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.