Was FTX collapse part of a strategy to bring about the digital $?

[midnight rambler]

https://thehill.com/opinion/finance/3786942-the-digital-dollar-is-coming-on-the-back-of-the-ftx-collapse/

[keehah]

Corporate news has been fast and furious this last month with federal governments investigating/planning CBDC articles.

Example direct from the BOC (https://www.bankofcanada.ca/research/digital-currencies-and-fintech/projects/central-bank-digital-currency/):

We are building the capability to issue a digital version of the Canadian dollar—known as a central bank digital currency (CBDC)...

The day may come when Canadians can no longer readily use cash or when an alternative private digital currency becomes widely adopted. That might be the tipping point when a CBDC could be needed.

This is an edited version of a much longer article:

roundingtheearth.substack.com: A Grand Unified Theory of the FTX Disaster (https://roundingtheearth.substack.com/p/a-grand-unified-theory-of-the-ftx)

Nov 20

"No matter what political reasons are given for the war, the underlying reason is always economic." -A. J. P. Taylor

-FTX was likely one of several available attempts by the Globalist Elite to establish the intended new global financial network and currency.

-A second attempt to control digital currencies is likely planned to take place through the regulatory system, using the FTX debacle as the excuse...

-The pandemic is the fog of war intended to create the opportunity and obscure the activities behind this plan...

Binance, a China-based organization, is the world's largest cryptocurrency exchange. This likely irritates Western leaders—particularly those in and around the military-banking complex. If nothing else, this is evidence that the world of digital currency is not simply a Ponzi scheme as some naysayers dismiss it. Indeed, most of the world's currency is already electronic and has been for many years now. Whether or not you agree, all I can do is encourage you to learn more (https://www.campfire.wiki/doku.php?id=rounding_the_earth:the_bitcoin_wars). That said, establishing a powerhouse successor seems to have been a priority among those who funded and organized the FTX-A Death Star.

You've probably read much on this topic already, or want a simplified story before moving on, so I'll see if I can take you where you might not have gone.

Step 1: Establish Alameda Research trading firm.

Step 2: Complete one kick ass trade.

Step 3: Build a well-projected media image of the Altruistic Death Star.

Step 4: Build the Death Star (FTX-Alameda).

Step 5: Explode.

Alameda Research was likely established with the Japanese (and maybe South Korean, which is a harder problem) Bitcoin premium arbitrage in mind. SBF pulled that off, and even if he and his team squandered much of the winners, that was enough to propel them to Step 3, which we've covered. At that point, as the story goes, SBF talked with Binance CEO Changpeng Zhao (CZ) who suggested that SBF build an exchange.

I question this last piece because it doesn't make sense on numerous levels:

Why would CZ encourage a competitor to his business?

It was likely understood that Alameda needed an independent (or "independent" given the closeness of the relationships) partner to engineer the Global Digital Central Bank (GDCB) model that we'll talk about later.

Next, as the story goes, SBF went out looking for capital and tough nuts like Sequoia and Softbank basically handed him the keys to the vault. It's unclear whether this was before or after what must have been a phenomenal team of lawyers designed the FTX as a corporate blueprint (https://www.zerohedge.com/political/worse-enron-new-ftx-ceo-slams-unprecedented-failure-corporate-controls)...

One thought I've had is whether Bitcoin was held back (short selling paper coordinated with the Chinese mining ban), but would be pushed forward by coordinated powers once the Death Star was fully operational. That could conceivably help cover such returns...

FTX-A wanted the world to know that it really was one of the cool kids (major hedge funds) already, so they churned out videos (https://www.youtube.com/watch?v=SozZeIQUhKk&t=1s) to support the image...

So, you're telling me that this team of kids who made their careers learning how to trade are running these fancy finance companies and are simultaneously good enough developers to understand how to solve the Holy Grail of trustless decentralized finance trading?

...This was all really just a windup for the real pitch. Here it comes…

[image of three Nov 16 SBF tweets (https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F 04a1224b-c068-42e2-8d1e-0f8e9d389daf_428x431.png)]
27) A few thoughts:
a) It's "really" hard to be a regulator. They have an impossible job: to regulate entire industries that grow faster than their mandate allows them to.

And so often they end up mostly unable to police as well as they ideally would.

28) Even so, there are regulators who have deeply impressed me with their knowledge and thoughtfulness. The CFTC has; the SCB, and VARA, too.
And others, scattered.

But most are overwhelmed.

29)Which means that interacting with regulatory structures can be really frustrating; a "huge" amount of work--much of it arbitrary--and relatively little customer protection.

Fuck that. You all deserve frameworks that let regulators protect customers while allowing freedom.

And their it is: "If we fail, bring in the regulators."

...We might as well jump right to it. I submit that it is highly likely that FTX-Alameda's planned best hope was to establish a new Global Central Digital Bank (GCDB). This GCDB would be the ultimate issuer of Central Bank Digital Currencies (https://www.deloitte.com/global/en/Industries/financial-services/perspectives/cbdc-central-bank-digital-currency.html) (CBDCs, though eventually the plural would not be needed under the then-inevitable governance structure), such as the one now being pushed on Australia (https://www.weforum.org/agenda/2022/08/what-are-central-bank-digital-currencies/). This is why SBF would be elevated above all other [actually] successful hedge fund managers and cryptocurrency entrepreneurs to share the stage with Bill Clinton, the head of the U.S. Treasury, and the CEO of Blackrock. Many financial engineers had a part in constructing the Death Star.

What is the Death Star, exactly?

Thankfully, Arnold Kling provides the correct explanation (https://arnoldkling.substack.com/p/the-government-as-a-crypto-scammer) from the chair of an actual Economist:

Let’s retell this story using entities of the U.S. government. The Treasury is like FTX, issuing tokens that it calls bonds. The Fed is like Alameda Research, taking these tokens on its balance sheet to try to support their price.

You’re going to say, “Wait. The Fed is issuing its own tokens, called money. The analogy does not hold.”

But Quantitative Easing did not work by issuing money. Instead, the Fed borrowed from banks, by paying interest on reserves and doing “reverse repos.” Just like Alameda Research, it took a levered position in Treasury tokens. Now the Fed is bankrupt. It has to be bailed out by the Treasury (you and me). Unlike FTX, the Treasury can still get away with issuing tokens.

...It should not surprise anyone then, as crypto news reports (https://cryptonews.com/news/was-sec-chair-gary-gensler-helping-sam-bankman-fried-find-legal-loopholes-for-ftx-heres-what-you-need-to-know.htm), "Speculation is mounting in the community that Securities and Exchange Commission (SEC) chairman Gary Gensler could have worked with FTX co-founder Sam Bankman-Fried to find legal loopholes the exchange could take advantage of."

[Tom Emmer tweet reply to Gary Gensler Nov 10 (https://twitter.com/RepTomEmmer/status/1590717374801809409?s=20&t=L2Ug2js7MwLXFC77RF1vvA)]
Interesting. @GaryGensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We're looking into this.



I’ll be joining @andrewrsorkin on @SquawkCNBC at 8:00am ET to discuss recent developments in the crypto markets.

Gensler also served as a Senior Advisor to Hillary Clinton, for whom SBF's mother Barbara Fried worked as an attorney...

[Image of SPF Nov 16 tweet (https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:s teep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F 7e24ff2a-9652-4f16-ba55-4829eef32470_435x160.png)]
21) And problems were brewing. Larger than I realized.

[AGAIN THESE NUMBERS ARE APPROXIMATE, TO THE BEST OF MY KNOWLEDGE, ETC.]

Leverage built up-- ~$5b of leverage, backed by ~$20b of assets which were....

Well, they had value. FTT had value, in EV! But they had risk.

This tweet makes no sense at all if they did not have the establishment of a GCDB in mind. There is no reason why the FTT token should have any value at all aside from the expected money saved by token holders trading on FTX (the defining feature of the token) plus the product of the probability and final value of the established GCDB. And this is exactly the reason to usher in regulation: because it cements industry leaders. Just as Amazon rode the tax-free online shopping wave in a way that current competitors cannot, FTX-A would have risen in an unregulated environment where future competitors would be hampered. From the Intercept:

“I think that the CFTC makes a lot of sense, though, as the market’s regulator,” Bankman-Fried told the paper. As the young industry flounders, it resorts to a method tested by its predecessors: funding the lawmakers who might regulate it. “They’re really experienced, competent, and efficient and have a deep knowledge of markets and of crypto markets, and you could do a really good job of that.”

Meanwhile, while the dust is still settling on the FTX-A scandal, the Federal Reserve Bank of New York quietly announced a pilot program for the new digital dollar. (https://qpol.substack.com/p/the-fed-implements-a-central-bank)..

From SBF & Co.'s perspective, whether or not they succeeded in establishing the GCDB, they took a lot of money from Bitcoiners competing with the globalists and used it to fund the election of those most opposed to Bitcoin's promise of decentralized (like democratic, ahem) power. They might simply call that a 'W' on the scorecard—particularly if they can navigate their ways out of jail time...

I haven't yet decided exactly how much to make of it, but there is a disturbing similarity between Alameda's logo and the recursive twisted symbols and logos that the FBI compiled in order to identify possible organized pedophilia groups (https://web.archive.org/web/20221028064239/https://wikileaks.org/wiki/FBI_pedophile_symbols)...

Could be nothing. Don't let it ruin the rest of the article. It's not as if SBF hangs out with Bill Clinton and wears a t-shirt in his Twitter profile advertising the "little girl lover" symbol (https://twitter.com/SBF_FTX), and dated a woman who still looks like she's twelve. Wait!

[Amanda]

well, fwiw, Lynnette Zang (and I think Catherine Austin Fitts too) has suggested that cryptocurrencies in general were created as a step in bridging the gab between the cash based system we have now and the CBDC they intend to impose on us, with the idea being that without cryptocurrencies being adopted by the public to some degree (Zang says 16%) they (the evil psychopathic central bankers) would have a harder time getting the public to accept CBDCs.

Also, thought it was interesting that last week on the am radio I heard an ad encouraging conservative listeners to start getting into cryptocurrency now, so when the govt forces the CBDCs on us conservatives will understand the technology and how to use it (kind of seems to give away the plan all along)

[ziero0]

Gold/silver is the currency of Dry Land

Paper is the currency of a government at Sea

Crypto is likely the currency of Air. Trust exist over both Land and ses and so does air. Maritime bankers will likely sqeal at what they consider a revolting state of affairs.

[keehah]

wsj: Central-Bank Digital Currencies Are Coming—Whether Countries Are Ready or Not (https://www.wsj.com/articles/digital-currencies-banking-system-11673625716)

Jan. 16, 2023
“Central-bank digital currency” doesn’t exactly roll off the tongue. But you might want to get used to saying it. These so-called CBDCs, or digital versions of dollars, yuan, euros, yen or any other currency, are coming, say those who study them. And depending on how they are designed and rolled out, their impact on the banking system could be profound.

One hundred and fourteen countries are exploring digital currencies, and their collective economies represent more than 95% of the world’s GDP, according to the Atlantic Council’s Central Bank Digital Currency tracker. Some countries, including China, India, Nigeria and the Bahamas, have already rolled out digital currencies. Others, like Sweden and Japan, are preparing for possible rollouts. The U.S. is studying the issue and has run trials of various technologies to enable a digital currency, although Fed chair Jerome Powell has indicated the U.S. central bank has no plans to create one, and won’t do so without direction from Congress.
forbes.com: The Reports Of The Death Of Crypto Are Greatly Exaggerated At Davos (https://www.forbes.com/sites/lawrencewintermeyer/2023/01/20/the-reports-of-the-death-of-crypto-are-greatly-exaggerated-at-davos/?sh=5c75a14a3992)

The Davos Promenade, dominated by the blockchain community, was packed out and was pulsing with a quiet confident optimism...

The tech presence on the Promenade has grown massively over the last decade and is now dominated by the global blockchain community...

The tokenization of real world assets was a big theme with several of the largest buy side institutions now engaged in the tokenization of billions of dollars of financial assets and seeking to extend the tokenization of real assets beyond securities to real estate and commodities.

Tyrone Lobban, Head of Blockchain at JP Morgan spoke of the importance of Project Guardian, with their blockchain company Onyx collaborating with DBS, SBI, Oliver Wyman, and the Monetary Authority of Singapore (MAS). The real asset DeFi proof of concept pilot is a strong signal that tokenization of the real economy is about to take off. Meanwhile, JP Morgan CEO Jamie Dimon hung out at the Equality Lounge speaking about his own experiences with men in the workplace and the job we all have to do to improve diversity, especially among leaders...

The Blockchain x Climate Leadership Network (BxC) was launched (https://blockchainxclimate.substack.com/p/davoslaunch) and will focus on carbon markets registries, standards and auditability, and policy development to drive interoperable Layer 1 blockchain solutions to bridge Web2 and Web3. The network includes Ripple, Solana, the Climate Collective, Eqo Networks and has the goal of connecting the many disparate projects working on blockchain climate solutions into a unified Web3 community.

Ute Klamert and Bernhard Kowatsch of The UN World Food Programme spoke of the “food for crisis web3 initiative”...

The consensus on crypto regulations on the Promenade was muted to conservative at best - not much will get done in 2023. Expect more enforcement actions from the U.S. regulators, a deeper dive into European MiCA Level 2 drafting, and a quiet confidence that the U.K. will accelerate digital asset regulation through its historic Financial Services Bill. The jury is out with global regulators and DeFi and this is an area that will likely require greater industry development and collaboration...

The global blockchain community, a community of companies of all shapes and sizes is quietly and confidently replacing the antiquated plumbing in financial markets, some of it more than 50 years old, and replacing it with new digital infrastructure that works and delivers real benefits, both economic and social.

... the lack of technology understanding with policymakers that are often barriers to efficiently scaling these new solutions to mass adoption at a faster than glacial pace, and it will take patience and time. The human and financial capital is most certainly abundant.

Blockchain technology unites disparate communities and offers one of the best opportunities in history for industry and government to collaborate to better unite a fragmented world to deliver much greater economic and social impact.
Call me a cynic, but I interpret "a fragmented world" is their code for money and free markets!

finextra.com: Universal Digital Payments Network launched at Davos (https://www.finextra.com/newsarticle/41639/universal-digital-payments-network-launched-at-davos)

20 January 2023
A Universal Digital Payments Network (UDPN) for stablecoins and Central Bank Digital Currencies (CBDCs) was launched at the World Economic Forum (WEF) in Davos. The network aims to provide interoperability between these digital currencies.

UDPN has been in development for the last two years with contributions from GFT, Red Date Technology, TOKO, and DLA Piper. A sandbox was launched in July of 2022, where multiple banks were actively testing stablecoin transfer and FX transactions.

The network was launched at Davos with a panel discussing the rapidly evolving digital currency, interoperability, and infrastructure. The panel included representatives from Deutsche Bank, HSBC, Standard Chartered, The Bank of East Asia, and Akbank.

The UDPN reports that several Tier 1 banks will participate in a series of proof-of-concept use cases throughout the rest of this month to demonstrate how UDPN could be used to solve current and future challenges in integrating digital currency into daily business, banking and payment scenarios.

The first two of these proof-of-concepts will involve two global banks testing UDPN’s digital currency cross-border transfer and swap transaction capabilities, and how the critical “Travel Rule” can be easily implemented on the UDPN between two financial institutions for anonymous stablecoin transfers.

“The purpose of UDPN is to investigate a potential alternative to existing payments systems by enabling interoperability between fiat-backed tokens of stablecoins and regulated protocols,” said Marika Lulay, CEO of GFT.

As I expect, CBDC's 'currency' will be neither owned by any individual account, nor even banks. With a CBDC Banks will be reduced to a role similar to a variety of private insurance agents that all facilitate interaction with a single source of government auto insurance. I assume the CBDC schemes seem to be calling this new form of currency neither individuals, companies or even the banks will hold or own are what the industry calls 'tokens'.

wikipedia.org: Tokenization (data security) (https://en.wikipedia.org/wiki/Tokenization_(data_security))

The concept of tokenization, as adopted by the industry today, has existed since the first currency systems emerged centuries ago as a means to reduce risk in handling high value financial instruments by replacing them with surrogate equivalents...

Application to alternative payment systems...

Tokenization as a security strategy lies in the ability to replace a real card number [or currency] with a surrogate (target [currency] removal) and the subsequent limitations placed on the surrogate card number (risk reduction). If the surrogate value can be used in an unlimited fashion or even in a broadly applicable manner, the token value gains as much value as the real credit card number. In these cases, the token may be secured by a second dynamic token that is unique for each transaction
worldfreedomalliance.org: A Central Bank Digital Currency creates unprecedented possibilities for tyranny (https://worldfreedomalliance.org/au/news/a-central-bank-digital-currency-creates-unprecedented-possibilities-for-tyranny/)
December 1, 2022

[Dachsie]

The U.S. Department of Justice (DOJ) informed a federal judge late Wednesday it did “not intend to proceed” with a campaign finance charge against disgraced FTX founder and Democrat super donor Sam Bankman-Fried.


https://www.breitbart.com/politics/2023/07/27/doj-drops-campaign-finance-charge-against-sam-bankman-fried/

[Dachsie]

I just heard today on x22 Report of 8-11-23.

A judge just decided to put Sam Bankman Fried back in jail. This guy stole 8 billion dollars in a vast money laundering scheme and he has been walking free.

Witness tamplering.


https://twitter.com/MarioNawfal/status/1690085426269196288?ref_src=twsrc%5Etfw%7Ctwcamp%5 Etweetembed%7Ctwterm%5E1690085426269196288%7Ctwgr% 5E128cb42100212127778235c60d3aad99613135bf%7Ctwcon %5Es1_&ref_url=https%3A%2F%2Fx22report.com%2Fconfirmed-the-plan-is-working-the-door-has-been-open-art-of-war-ep-3137%2F

Mario Nawfal
@MarioNawfal


🚨BREAKING: FTX's Sam Bankman-Fried TO BE JAILED | Bail Revoked

SBF is being incarcerated for tampering with at least 2 witnesses.

He will be in jail prior to his October trial, facing a range of fraud and conspiracy charges.

He may have access to a laptop with an internet… pic.twitter.com/1sj8fMm8cO

— Mario Nawfal (@MarioNawfal) August 11, 2023