👁️ The SEC Will Eat Itself

Another huge L for Gary Gensler. Also: Michael Patryn Hacked; Young Thug's Awesome Lawyer

Hello, and welcome to the Dark Markets news brief for Tuesday, June 11, 2024.

If you haven’t yet, be sure to check out my recent deep dive into “The TESCREAL Bundle,” a new research paper by Timnit Gebru and Emille Torres tracing the connections between Transhumanism, the artificial intelligence Singularity, and Sam Bankman-Fried’s Effective Altruism - and their shared roots in the white supremacist Eugenics movement.

SEC Closes Utah Office After Lawyers Lied

Oooooooooh Gary.

Gary Gensler’s Securities and Exchange Commission has taken some losses in its counterfactual, Elizabeth Warren-driven campaign against, it seems, the entire concept of cryptocurrency. In maybe the most striking of these losses so far, the freewheeling quote-unquote “regulator” will now shutter its entire Utah office in the wake of the devastating embarrassment of the DEBT Box prosecution.

Two lawyers out of the Utah office took the fall for lying to the court in that case - though as The Castle Island Boys have emphasized, the chance that those orders didn’t come from much higher up is effectively zero. The closure can be read in that light as the ultimate clean-up job: What better way to quash evidence of administrative corruption than to nuke an entire field office from orbit? And it’s not an inconsequential cut - it reduces the number of SEC offices outside DC from 11 to just 10.

The closure is also notable because Utah was and remains a hotbed of fraud in America. It was the home, notably, of Trevor Milton and Nikola, and the LDS itself was recently dinged for tax evasion. But there’s a much longer legacy of fraud in Utah, going back to the uranium stock frauds in the 1950s that led to the opening of the now-closed office.

Utah has also proven a ripe hunting ground for fraudsters, particularly of the multi-level-marketing variety. One lens for explaining that is that Mormons live in a culture of trust and community that can be exploited, but I think that framing is too generous. As much as I know and love many Mormons, the institutional culture of the Church itself is troublingly hierarchical, which both represses the impulse to critical thinking, and normalizes free labor.

Along with the SEC’s embarrassing defeat in the Bitcon ETF and its continuing struggles in the Coinbase and Ripple cases, it’s becoming clear that Gary Gensler will never be Treasury Secretary.

Related Listen: ex-Banker Austin Campbell on who Gary Gensler always was - a gangster, indifferent to the subtleties of the actual law.

0xSifu Gets Some Rough Justice

Michael Patryn, a.k.a. 0xSifu, is like a cockroach. Yes, in the sense that the QuadrigaCX accomplice is disgusting and will harm you if you touch him - but also in the sense that, despite committing fraud almost continuously for the duration of his adult life, he has managed to stay alive (that is, out of prison).

He’d now like you to refer to him as “0xSifu,” a “DeFi Builder,” a pivot he initiated with the absolute shitshow that was Wonderland DAO. Now he’s cofounder of something called “UwU Lend.”

Anti-scam pro tip: Childish or memey names attached to crypto-financial products are the equivalent of misspellings in Nigerian scam emails. The goal is to immediately scare off anyone with a brain, so that the remaining clueless rubes won’t sound the alarm.

Anyway, like all good DeFi Builders, Sifu/Patryn got hacked! The $19 million is just a dot on the roughly $200 million his efforts at Quadriga ultimately cost customers, but it’s still reassuring: sometimes bad things do happen to bad people!

Patryn is offering a 20% bounty if the hackers please, please return the money, which is a deal I’m sure Patryn’s own victims would take in a heartbeat.

Young Thug’s Lawyer Decided to Be a Legend

Brian Steel is representing rapper Young Thug in a racketeering case in Georgia. Through unknown means, Steel appears to have uncovered collusion and witness tampering involving the judge in the case. The judge’s response when confronted, as shown in this must-watch video, was to demand that Steel give up his source - which, amazingly, seems to confirm that Steels information was correct.

That means Thugger (one of the genuine artistic talents of his generation) is likely to get a mistrial here. But in the meantime, the judge has sentenced the lawyer to serve 20 days of weekends in detention. That seems unlikely to actually hold up, but Steel has, even more incredibly, asked to serve the jail time with his client.

Watch and Read

Smiling Friends

I can’t believe I’m going to write this sentence, but if you’re of a certain age, you probably wonder why Adult Swim hasn’t continued to pump out awesomely weird little cartoons. Just like everything else, I’m sure The Internet is to blame - but at long last they seem to have done it again, in a way that people are really responding to. Smiling Friends is almost as deranged and joyful as Aqua Teen Hunger Force. Essential viewing.

Between Two Fires

This fantastic “medieval horror” achieves the neat trick of crafting a realistic-feeling journey through a Europe riddled by the Black Death, then dropping a load of supernatural shenanigans in that feel genuinely creepy and surreal. It’s also far more fun than that makes it sound.