A forgotten banking scandal suggests FTX is the tip of the crypto iceberg

The most interesting thing to me about the ftx collapse is how totally unoriginal it was.

Enron included decades of fake accounting, complex legal structures used to make debt look like assets, new ways of breaking laws.

Ftx was just 1400s style fraud in a new, tech wrapper. Very unoriginal. People have been doing that since banks were invented.

I don't want to lessen the culpability of SBF and other senior leaders at FTX. But it is stunning that the SEC and groups like Sequoia Capital assisted in this. Have they never seen basic fraud before? Did they think controls and transparency were just red tape?

Fraud, money laundering, and corruption on a global scale, yet regulators seem asleep at the wheel. This has happened before...

"Of particular significance was the bank’s involvement in the Iran-contra affair, a major scandal during the Reagan administration that involved illegally selling arms to Iran to finance right-wing guerillas in Nicaragua."

MIT Media Lab was founded by Nick Negroponte, the brother of the US's Nicaraguan-rebel-supporting ambassador to Honduras at the time John Negroponte.

The Securities & Exchange Commission's chairman, Gary Gensler, has also been an MIT Media Lab & Economics crypto-economist professor since 2018.

MIT's department head of economics, Glen Ellison, is the father of Alameda Research CEO Caroline Ellison.

Small world..

John Negroponte's well-known for covering up Nicaraguan & Honduran death squads, serving as ambassador to Iraq through the false Senate 2004 Iraqi WMD Intelligence report, and rising to Director of National Intelligence and Deputy Secretary of State by the end of G.W. Bush's presidency.

Sources:

https://www.media.mit.edu/people/gensler/overview/

https://en.wikipedia.org/wiki/Glenn_Ellison

https://en.wikipedia.org/wiki/Nicholas_Negroponte

https://en.wikipedia.org/wiki/John_Negroponte

"Ambassador to Honduras (1981–1985)

Assistant Secretary for Environment, Oceans and Fisheries (1985–1989)

Ambassador to Mexico (1989–1993)

Ambassador to the UN (2001–2004)

Ambassador to Iraq (2004–2005)

Director of National Intelligence (2005–2007)

U.S. Deputy Secretary of State (2007–2009)"

https://www.nbcnews.com/id/wbna7468275 : "Papers Illustrate Negroponte's Contra Role"

https://theintercept.com/2018/11/28/killing-asylum-how-decad... : "The History of John Negroponte and the Contra Death Squads in Nicaragua"

Yes, centralized crypto exchanges are pre-failed.

Really. They've already failed, it just hasn't manifested on the time axis yet.

The story about BCCI, while interesting, doesn’t seem related in the slightest to FTX.