👁️ Ryan Salame Kept Spending FTX Money

Also: Coinbase Got Pwned; 764 ring arrests; Klarna backs off AI; Cardano shenanigans; more sus SBF d*ckriding

Welcome to your weekly Dark Markets news roundup. I am two weeks away from submitting a full and edited manuscript to my publisher! The past nine months have been truly blissful, but being done is also going to be a wild one.

Thanks to all of you for your continued support, and please spread the word about this newsletter if you enjoy it! It will continue to be a huge part of getting the word out about the book. Every referral helps!

Campaign finance fraudster Ryan Salame and babymama Michele Bond, two of the more pathetic human beings alive.

More SBF Fluffing: It’s like a damn mental illness. Nearly a full year after the New York Times gushed about Sam’s investment prowess and Yale professors mortgaged their reputations to claim “FTX was never Bankrupt,” Harry Stebbings posted this excerpt of some midwit VC marvelling at Bankman-Fried’s “amazing” early investments in Anthropic and Cursor (if you know who that is, let me know).

There’s a lot to say here about the absolute lust that people have to suck off a guy who used to have a lot of money, and who was only able to make any investments at all because he stole billions of dollars. But more to the point, Ramnik Arora ran most of FTX’s investments, and for that matter, Anthropic’s current valuation is itself a fucking fraud based on the myth of AGI propogated, above all, by Eliezer Yudkowsky.

Did Cardano Steal from Investors? Masato Alexander, an NFT artist, claims that Charles Hoskinson used a “genesis key” to manipulate the Cardano blockchain and reassign ownership of $225 million worth of investor tokens to a development fund. These are controversial claims, subject to interpretation, and this is not an endorsement of them. But it highlights two things that should be scandals in their own right: first, that Cardano is not decentralized or trustless; and second, Cardano’s heavy marketing of early ADA sales to Japanese retirees and nursing home patients.

764 Pedophile Ring Bust: Credit where it’s due, the Trump DOJ has seemingly taken down dozens of members of an actual pedophile ring, known as 764. A dedicated investigator going by @bx (who also has a Substack:

Bx Writes

) has a thread rounding up the array of really vile figures who have been locked up. The network appears to have grown largely on Discord and similar platforms.

Coinbase: Kill Your Customer

Coinbase joined the S&P 500 on Monday, but the timing is not good: they just announced that a huge amount of customer data was stolen by bribing international customer service workers.

There are two points to be made here:

A) Coinbase fucked up in a totally avoidable and hilariously stupid way, and

B) “Know Your Customer” laws need to be seriously rethought.

Coinbase fucked up by making way too much information available to underpaid offshore customer service reps, including customers’:

• Full legal name

• Home address

• Government‑ID images (e.g., driver’s license, passport)

• Account balance and linked bank account information

Personally, I like Coinbase’s service and use it for small amounts of crypto. I don’t appear to have been personally exposed, and it might not have been a big deal if I was - I’m not worth robbing.

But some people keep a LOT of money on Coinbase, and for them, this is a major, major security threat. International criminals have their crypto balances and home addresses. There’s a lot of fear about kidnapping and extortion resulting from this breach - and since it seemingly happened in January, some have speculated that it’s already triggering kidnap attempts, like this one in France.

Now - to Know Your Customer laws. I’m ambivalent about money laundering controls in general, because they genuinely seem to mostly create hassles for normal people while doing less than nothing to stop actual crime: just look at the handling of Suspicious Activity Reports (SARs) to FinCEN, which are mostly used as cover-your-ass by banks and rarely actually investigated.

But even if you agree with the AML agenda, current KYC practices are simply stupid. They turn *every* financial service you interact with into a giant hoard of very sensitive data. And there are imminently practical solutions available today: most notably the possibility of using Zero Knowledge Proofs and other forms of cryptography to minimize data sharing.

Ryan Salame Kept Spending FTX Money

The invaluable FTX Historian has highlighted recent filings in the clawback lawsuit targetting former FTX executive and campaign-finance fraud cutout Ryan Salame. The filing, from April 21, claims that Salame and his baby mama Michele Bond went on a $6 million shopping spree before the FTX estate could get their hands on the money. $370,000 of this spending allegedly took place in four days last December before an asset freeze could be imposed. The pair also attempted to hide their $4 million house from creditors by transferring the deed, and Bond has submitted a request for “living expenses” from the estate including “requests to pay for a nanny, housekeeper, handyman, nurse, hair care, lawn service, and pool maintenance.”

Bond and Salame, remember, are a match made in grifter heaven: Bond used $400,000 of stolen FTX money to fund a vanity political campaign. Currently, her prosecution is continuing, with a status conference before George B. Daniels at SDNY scheduled for July 15th.

It all speeks to one of my more strongly-held beliefs: Fraudsters are usually really fucking stupid, hapless people. Those kids are not going to be alright.

Klarna Wants its Humans Back

About two years ago, the buy-now-pay-later fintech Klarna (which should be burned to the ground for entirely unrelated reasons) announced it had stopped hiring humans, and would replace both its customer service and marketing teams with AI. Several big model upgrades later, that’s not working out at all. The company

Klarna’s CEO Sebastian Siemiatkowski told Bloomberg that "cost unfortunately seems to have been a too predominant evaluation factor when organizing this, what you end up having is lower quality."

In other words, this is all total bullshit.

“If Anyone Builds it, Everyone Dies.”

For better or worse (it’s probably for worse) Eliezer Yudkowsky is Publishing a Book. This appears to be the first time he’s done that with a real publisher (Little-Brown), which is notable given his stature, but I certainly can’t throw stones. I also can’t really blame him for making his first big one a book about the idea that has defined his life: that artificial intellligence will literally murder humanity.

I *can*, however, blame him for seemingly failing to evolve beyond that idea in the most obvious way possible: to pay at least some attention to the implications of LLMs to the human informational ecosystem, which seems far more likely to actually harm society in the very near term than, I quote:

“The nanomachinery builds diamondoid bacteria, that replicate with solar power and atmospheric CHON, maybe aggregate into some miniature rockets or jets so they can ride the jetstream to spread across the Earth's atmosphere, get into human bloodstreams and hide, strike on a timer.”

Look, this guy’s a nut - so overindexed on one idea that to prove it, he’s basically writing science fiction. Anyway, his nutty book comes out in September, which is frankly great news for me - mine is coming in October, so it will be a nice rebuttal/counterpoint.