"Restore the Republic" Token Was Another Scam on Trump Supporters
Also: Pump.Fun numbers; Do Kwon bribes Montenegro; Calvin Ayre and Wirecard, and more.
Hello and welcome to your Tuesday Dark Markets news roundup. If you missed it, I had some tentative big news over the weekend. Lots going on this week, so let’s get right into it!
In this Edition: $RTR, another Trump Grift Token; Do Kwon is Corrupting Montenegro From Jail; FTX settles with CFTC for $12.7 Billion; Ripple got away with an epic heist; Pump.Fun is a Fascinating Fraud Machine; Calvin Ayre’s Connections to the Wirecard Fraud; U.K. (finally) Freezes Cryptoqueen’s Assets;
Another Trump Grift Token Rises: “Restore the Republic” ($RTR)
You might think people would learn something from the ignomionious, Martin Shkreli-wrecking saga of the token “DJT,” which nuked another -90% last week after a cadre of known con artists shilled it (not to be confused with the scam stock $DJT, Trump Media Group).
But if you think people in crypto learn anything at all, it’s you, sir, who are the Rube. A new purported Trump token appeared last week, “Return the Republic,” or $RTR. It was shilled as “the official trump coin” by one Ryan Fournier, head of Students for Trump; as well as by Size Chad, a crypto guy with a pretty decent reputation. Chad subsequently sort-of apologized, saying he lost $60k when the project (of course, you morons) turned out to be a complete scam and tanked 95% overnight.
You might notice that these scams are targetting Trump supporters far more than the Democrats. Scammers know who their best targets are - listen to their insight.
Do Kwon is Corrupting Montenegro From Jail
A Montenegrin court has again delayed Terra/Luna scammer Do Kwon’s extradition, to either South Korea or the U.S. Kwon has been in custody there since March of 2023, when he as arrested for trying to use a fake passport to flee to Dubai.
Kwon’s extradition has now been delayed or contested a half-dozen times, and we finally have some clarity on why. As reported in this writeup by Protos, former Montenegrin Minister of Justice Andrej Milovic has alleged (in a post in Montenegrin on X) that Prime Minister Milojko Spajić accepted bribes from Do Kwon, and has resisted his extradition to the U.S. to keep them hidden.
FTX Settles with CFTC for $12.7 Billion
FTX has settled a civil fraud lawsuit with the Commodities Future Trading Commission in the amount of $12.7 Billion dollars. Crucially, according to Fast Company, the settlement includes the proviso that FTX will repay customers who lost deposits before any money goes to the CFTC.
XRP jumps 20% after Ripple Labs $125m SEC Settlement
Man, this SEC is an endless parade of pratfalls and fuckups. Most recently, they reached a $125m settlement with Ripple Labs, who are objectively some of the worst actors in the history of crypto - in impact even if not in intent (and probably also in intent). The settlement will mean less than nothing to Ripple, and the useless XRP token rallied on the news. Great job, Gary!
XRP launched way back in 2012, and Ripple has since raised an absolutely absurd amount of money by steadily selling the token out of its treasury holdings - a reported $1 billion worth in just the first half of 2024. And despite promising for years that banks would adopt XRP as a vehicle for cross-border transfers, that has never happened, and Ripple has now effectively pivoted away from the pretense that XRP has any actual utility at all.
Meanwhile, for a decade now, Ripple has engaged in serious rhetorical shenanigans to try and argue that they weren’t the ones who issued it. That, plus their absurd war chest to pay for expensive lawyers, has seemingly simply overpowered the SEC - which might not have happened if the goons over there were focused on actual harm to investors.
Pump.Fun is a Fascinating Fraud Machine
Speaking of dumbos defrauding each other, some staggering new data has emerged about Pump.Fun, a tool on the Solana blockchain that makes it incredibly easy to launch tokens without coding or any other skills.
Here are the truly crazy stats, compiled by @adam_tehc using Dune Analytics: in a random 24 hour period, 16,357 new tokens launched, and 99.9% of them died within 24 hours.
The picture that emerges is of a frantic economy of circular scamming and musical chairs. Truly bleak vibes of Zoomers who believe their only path to success in life is rug-pulling each other. I more than agree with those saying the tool is a net negative, not just for crypto, but for society.
Calvin Ayre’s Connections to the Wirecard Fraud
This one is a bit vague for now, but I’ve just become aware of allegations that Calvin Ayre, the backer of known fraudster Craig “Faketoshi” Wright, was involved in the Wirecard scandal. nChain, the BSV Potemkin Research Firm, is named in the KPMG report that helped expose the fraud, and BSV whistleblower Christian Agar-Hansen has furthered the connection.
The specific nature of the connection remains hazy, though, and may only amount to Ayre’s gambling businesses using Wirecard for payments (gambling payments were Wirecard’s specialty). Some have speculated that the connection has to do with claiming tax losses from BSV operations.
U.K. Belatedly Freeze’s Ruja Ignatova’s Assets
London’s high court, showing the speed and efficiency for which British bureaucracy is world-renowned, has frozen the assets of “Missing Cryptoqueen” Ruja Ignatova. Keep in mind that Ruja’s crimes were largely committed nearly a decade ago, and there has been no evidence that she’s even still alive since 2017.
I noticed the Protos link was missing: https://protos.com/do-kwon-was-recorded-meeting-montenegrin-pm-says-former-minister/ . One line in there is particularly telling, regarding the one making the allegations: "Milović is currently running for mayor in Montenegro’s capital, Podgorica." Especially since everything else in the three most recent Protos articles on the Montenegro leader and Do Kwon involve he-said-she-said from opposing parties. Usually at least one party is full of sh** and I don't know enough about Montenegran politics to say further (i.e. which one is, or if both are, sh**-filled). Would be nice to get an assessment from someone who does not have a political (and, thus, as is almost always the case with politicians, a financial) incentive.
That said... Do Kwon /did/ go there. I doubt to check out the churches at the Bay of Kotor. And, yes, I did have to first search online to find out what the heck anyone would go to Montenegro for.
Speaking of places that never come up except when talking about financial fraud, and Wirecard, which also never comes up except when talking about financial fraud. Did you know the guy behind Wirefraud might apparently have been a representative of Grenada? "Although Austrians generally aren’t allowed dual citizenship, Marsalek held at least eight passports, including diplomatic cover from the tiny Caribbean nation of Grenada." https://www.newyorker.com/magazine/2023/03/06/how-the-biggest-fraud-in-german-history-unravelled . Though his proof of being a representative might itself be a fraud: "At the time, Marsalek is described as an official representative of the government of Grenada, a small Caribbean island of around 100,000 people, in a letter that bears the letterhead of the Grenada government." "In a phone call, Steele, who is now the Minister Health in Grenada said the document leaked in the Hacking Team emails is fraudulent." https://www.vice.com/en/article/jan-marsalek-wirecard-bizarre-attempt-to-buy-hacking-team-spyware/ While much is known about Wirecard guy, again, I know nothing about the accuser of the fraudulent credentials, which is another politician from a county I know very little about.
And since we're linking to Protos around here: https://protos.com/sun-grenada-his-excellency-justin-crypto-tron-diplomatic-immunity-switzerland/ But... https://www.coindesk.com/policy/2023/03/30/tron-founder-justin-sun-reportedly-lost-his-diplomatic-status/ Oh and since Ripple was mentioned in this Substack, this tweet from the Ripple CTO supposedly was in response to something that someone in the aforementioned tweeted. https://x.com/JoelKatz/status/1755393554736914921 . I say supposedly as I found out about the tweet from crypto "news" sites I trust so little I won't even link to them, and the x.com link is not showing that it is a reply to someone, and maybe I need to login to find out, but I also don't want to login to find out.
Regarding Pump.fun "defrauding"... Eh, as much as anything is a fraud that indirectly suggests that memecoins are possibly good investments. The most disingenuous part of Pump.fun is where they call the person who clicks a button to start the form, fills out about three fields, uploads a picture, and then clicks another button to submit the form a "Developer." That is indeed a bit rich, much richer than Pump.fun makes the vast majority of people.
There are two good articles on cointelegraph.com about the low odds of Pump.fun: https://cointelegraph.com/news/memecoins-pump-fun-99-percent-fail-launch and https://cointelegraph.com/news/memecoin-casino-bet-pump-odds .
The first has this rather nice quote: "'Pump fun didn’t ruin memecoins, it just pulled back the curtain on how the sausage is made and made it very easy to make the aforementioned sausage,' pseudonymous crypto commentator Bunjil told their 56,900 X followers." And I think that's a good point. They've not really made memecoins an even less-effort and poorer-quality product. They've effectively democratized the tools that were always creating a low-effort and poor-quality product.
The second article points out you've got better odds and payout in playing roulette. (I swear I read somewhere that even the lottery beats Pump.fun, but I can't find where I read that, so it may have been removed after some fact-checking.) In that second article "At face value, the comparison isn’t favorable, but trading a stock and placing a bet are two different things. 'A token could also run far past $69,000 after graduation,' Adam told Cointelegraph. 'But that’s becoming increasingly rare. Hence the frustration.'"
But two things regarding skill vs random.
One: Clearly it's not random. Cleary a dogcoin called Doggolicious (DGGLCS) is a better investment, based on name alone, than one called ChickenAndWoofles (ChxAndWoof). (I'm Camp ChickenAndWoofles, personally.)
I am not just trying to be ridiculous. I am also trying to make a point. You could probably ask 100 people which name they like better. And it could be statistically relevant to the next 100 people. And if two identical memecoins are created, and if the only difference is the name, and there is a statistically-relevant-more-likable name, and presumably people would be more willing to spend money on something they liked than disliked, then being able to pick the more likable name would mean being able to pick the better performer, which would then mean picking Doggolicious vs ChickenAndWoofles is perhaps more skill, and thus not random.
But is "not random" enough?
It's never just a name that makes something take off. I may have made the grand effort of filling out three fields with identical text except where it regarded names, and attached an identical (non) image of a dog, and submitted. And they both might be doing precisely the same. Namely, they may both have been completely ignored by the world except for the usual sniper bots at creation, that buy and then sell immediately . This world ignorance make sense as these tokens in that scenario would have zero marketing or insider activity / wash trading / fake volume. Fake volume is arguably just another form of marketing, albeit a deceptive form. Sniping bots don't count as fake volume, as I believe they happen with every token cleation, and thus their activity is guaranteed meaningless volume. And I suspect at least some form of marketing is needed, as nobody is going to see the token names among the constant spam of token generation. Because if you can make it easy, particularly easy enough for a bot to create, you will get spam.
But the amount of money needed to spend on traditional marketing or fake-volume marketing to then lead to real volume is not something most people know. Nor the exact amount of real volume that then allows for a profitable entry and exit in trading. Nor what a profitable entry or exit might be.
In other words even if there is a non-random difference in two memecoins, doesn't matter if they both do absolutely nothing. And those memecoins that do more than nothing, need to do an amount of non-nothing that is almost certainly beyond the ken of the vast users of that site, or perhaps anyone.
Two: "[B]ut trading a stock and placing a bet are two different things." Different, but different in a relevant way? Even if memecoins were more like stocks than betting on a number to come up in a big, round, wooden random number generator, would that make it worthwhile to pick a few letters as opposed to a single number? An often pointed out statistic is the S&P beats most hedge funds. Those who manage "alpha," those stock traders who become almost household names and the topic of get-rich books, are they even more than outliers of statistical irrelevance? If they continue to generate alpha for long enough time to be statistically relevant, is it really just from picking stocks? Or is it from selling their reputation to get a larger portfolio that gets them more returns just in volume? Or maybe they get so big they can actually make macro effects and not just predict them? Or both?
The S&P beats holding cash. And I'm not saying it for some Pollyanna belief in American exceptionalism. Far from it. It is pure cynicism that the rich will almost certainly stay at the reigns of power and tighten them even more. And they use stocks to avoid being taxed. And stocks line the pockets of politicians. Yes there is American exceptionalism: in wealth/income divide.
Memecoins aren't really good for keeping the rich richer, not like stocks are. In general. Some individual ones can be, for individual periods of time, but you would need to know what the rich are doing at those times to make themselves richer, and that would require you access you do not have. And, as a basket/index, it fails dramatically.
Basically, Pump.fun (which is just an extension of memecoin, unless some news reveals more) is an extremely poor investment. Is that fraud?