👁️ Elizabeth Warren Is Helping The Terrorists
Treasury Debunks WSJ's Hamas Crypto Report; The $50,000 Shoebox; Inept Attacks on the Crypto Critics; and more.
Welcome to Dark Markets, where finance and crypto veteran David Z. Morris guides you through the shadows of the system. If you haven’t yet, be sure to check out my interview with Mike Dudas of 6th Man Ventures, and the most recent drafts from my book on Sam Bankman-Fried: “Inventing an Altruist: How Sam Bankman-Fried Faked Morality.”
Weekly News Roundup for February 20th, 2024
This week:
Navalny Assassinated
A High School Deepfake Nightmare
The $50,000 Shoebox
No, Hamas Isn’t Financed Through Crypto
Hapless Engagement Farmers Ineptly Attack Protos
Alexei Navalny Has Been Assassinated:
Navalny was for more than a decade the primary domestic opponent of Vladimir Putin and the Putin kleptocracy. Those vampires will continue to suck the Russian people dry, taking their money to London and New York, and exporting their mafia operation along with it. Navalny died at age 47, perhaps along with Russian civil society itself, in a Siberian prison.
Elon Musk’s Twitter, meanwhile, suspended the account of Navalny’s widow after she pledged to continue his work.
A High School Deepfake Nightmare:
404 Media highlights the story of a high school in Washington that experienced a rash of students making “deepfake” nudes of each other. As 404 points out, these tools are widely advertised on social media used by kids, and, when hosted offshore, nearly impossible to control. Add it to the long list of reasons generative AI is a net negative for society.
404 Media, founded by former Vice Motherboard editors, has been doing stellar work lately - support them any way you can.
The $50,000 Shoebox:
New York Magazine financial advice columnist Charlotte Cowles became the main character on Twitter last week when she revealed that she had been scammed out of $50,000 by a group of people pretending to be, in rough order, Amazon, the Federal Trade Commission, and the C.I.A.
There was a fairly widespread incredulity that a supposed personal finance expert could be so easily scammed, and many felt part of the story was missing. The most suspicious element was that this woman was able to withdraw $50,000 in cash from a bank without having someone sit her down and have a very serious conversation about what she was doing. Banks being uncooperative about what you do with your own money is often annoying, but talking you out of falling for a scam is one moment when it can actually be helpful.
My strong suspicion is this woman ignored explicit warnings from a bank officer, but left that out of the article.
No, Hamas Isn’t Financed Through Crypto:
The Wall Street Journal is one of the last truly serious newspapers in the United States, so it was particularly galling when, back in October, they fell for deeply flawed research from a blockchain firm called Elliptic. Together, WSJ and Elliptic misread blockchain data to conclude that Hamas had raised tens of millions of dollars through crypto to fund its attacks on Israel.
Observers at the time pointed out that the analysis was badly flawed, conflating exchange wallets with funds controlled by the Palestinian group. Now the U.S. Treasury itself has debunked the story, with Treasury undersecretary of terrorism finaning Brian Nelson saying terrorists “still prefer, frankly, to use traditional products”.
In other words, by ginning up fake fears about crypto instead of focusing on real problems, Elizabeth Warren is helping terrorists, not slowing them down.
The Journal issued a mealy-mouthed retraction and made some changes two weeks after the initial article, but this is still what it looks like:
What’s most offensive about this ‘correction’ is that it goes out of its way to mislead readers, while preserving plausible protection for the Journal. That $93 million number is the total held in omnibus wallets controlled by an exchange, and there’s no indication that most of it was in any way associated with terrorist financing. But the Journal does a cute little dance with the word “linked” to strongly suggest the opposite.
This is how a society’s faith in institutions declines: by hundreds of little cowardly acts of deceptive ass-covering.
Hapless Engagement Farmers Ineptly Attack Protos, Crypto Critics Corner:
An oddity stuck its head up last week, with a group of crypto “skeptics” casting extremely vague aspersions at … other crypto skeptics?
I won’t go into much detail, because these attacks don’t deserve any attention - and the attackers are small-time enough they don’t even quite deserve full-scale blowback. As malicious as their efforts may be, their incompetence renders this borderline comical - except that it amounts to harassment of real critical thinkers. The authors of a halfwitted “expose” cast vague aspersions on the team behind Protos, and brazenly misrepresented investigators Cas Piancey and Bennett Tomlin, in an attempt to tie them to some grand pro-crypto conspiracy. (Disclosure: I wrote about the SBF trial for Protos last October of 2023.)
Obviously this is absurd for a number of reasons, mostly that Cas and Bennett, of Protos and the Crypto Critics Corner podcast, are dedicated fact-based investigators with a years-long track record. That’s why even people who are pro-crypto respect them so much. They are *honest critics.*
The attackers, however, lack any command of fact-based investigative techniques, or even the ability to make coherent arguments. They appear affiliated with several other known bad-faith anti-crypto groups, including Digiconomist, which has published multiple false reports about energy consumption; Amy Castor, a self-styled “journalist” who is actually a bad-faith zealot; and the Texas Coalition Against Cryptomining [sic], whose (in)ability to engage in rational discourse can be sampled in this fairly deranged Twitter Space.
I’m incredibly proud that there is now so much attention for honest crypto skeptics and scambusters. But obviously not everyone, on either side, is as careful or honest as the Protos team.