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Bitcoin maximalists have been validated

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Bitcoin maximalists have been validated

Long before Bitcoin (BTC), Bernie Madoff sat atop the longest-running, largest fraud in history. The rise and real-time fall of Sam “SBF” Bankman-Fried, former CEO of crypto exchange FTX, were expedited in comparison. While the similarities are profound, the storyline is not: Create organizations under false pretenses, develop relationships with people in authority positions, defraud clients, survive as long as possible, and try not to get caught.

Madoff advisers experienced a “liquidity” problem in 2008, around late November into early December, where the fund was unable to meet client redemption requests. On its surface, the fourth-quarter timing of the Madoff collapse more than a decade ago appears eerily similar to FTX’s 2022 implosion. Bitcoiners who hold their keys will never experience a “liquidity problem,” as their Bitcoin isn’t being used to leverage anything else. It is the hardest money around as long as it stays in the custody of its rightful owner.

Even near the collapse, Madoff had planned to pay out $173 million in early bonuses to family and friends. When questioned by his sons on Dec. 9, 2008, Madoff confessed to the massive fraud. The numbers, in many instances, are fractions of the fraud FTX is accused of. Bitcoin maximalists continue to remind their communities that yield, third-party custodians and humans cannot be trusted. Satoshi Nakamoto’s white paper endures.

Madoff’s sons communicated, almost immediately, with an attorney, who advised them to contact federal authorities. Madoff was arrested on Dec. 11, one day after federal agencies were made aware of the fraud.

Related: The outcome of SBF’s prosecution could determine how the IRS treats your FTX losses

On Nov. 8, Binance CEO Changpeng Zhao announced on Twitter that he tentatively intended to purchase FTX, but he quickly reversed the decision, and a “liquidity” problem ensued at FTX. Bitcoin maximalists either watched idly, shaking their heads in disbelief — knowing it was a matter of time — or simply went on with their lives. Many maximalists might very well have been a part of Mt. Gox, which held approximately 80% of all BTC in circulation at the time it was breached. The “wake-up call” is an unfortunate initiation ritual for some Bitcoiners. FTX will mint many new Bitcoin maximalists.

In December, SBF was arrested in the Bahamas. As authors and researchers, we’re confident that correlations will be immediately identified and explored in regard to the timing of Madoff’s arrest on Dec. 11, 2o08.

As SBF faces extradition to the United States, based upon the “Treaty Between the United States and the Bahamas,” he faces sentence terms that may mirror Madoff’s, who faced a 150-year prison sentence for an arsenal of convictions. Those convictions included:

  • 40 years for two counts of international money laundering
  • 20 years for one count of securities fraud
  • 20 years for one count of mail fraud
  • 20 years for one count of wire fraud
  • 20 years for one count of false filings with the Securities and Exchange Commission
  • 10 years for one count of money laundering
  • Five years for one count of investment adviser fraud
  • Five years for one count of false statements
  • Five years for one count of perjury
  • Five years for one count of theft from an employee benefit plan

To provide some perspective, the longest sentences for recent financial fraud include, in order:

  • Shalom Weiss (845 years)
  • Norman Schmidt (330 years)
  • Bernie Madoff (150 years)
  • Frederick Brandau (55 years)
  • A tie for fifth place between Charles Lewis, Eduardo Masferrer, Chalana McFarland and Lance Poulsen, who received 30-year sentences.

Based on the limited release documents at the time of publication, SBF may have his name included on the top five listed above — even potentially at or near the top. That would be fair considering that, among other allegations, his political donations may have impacted or influenced U.S. political elections.

Related: It’s time for crypto fans to stop supporting cults of personality

Madoff’s prisoner number was 61727-054. Note that these oddly hyphenated eight digits weren’t representative of an account number, an SEC filing record or some secretive financial code; the numbers were Madoff’s former inmate number at Federal Correctional Complex, Butner.

If and/or when the time comes, SBF may be remembered by a similar numeric value instead of a cheeky three-letter moniker (“SBF”). Time will tell. Remember, Madoff pleaded guilty and still received 150 years, eventually dying while in custody.

Bitcoin > bribes

Let’s be clear: Not your keys, not your coins.

Stop giving your hard-earned money and Bitcoin to “trusted” third parties. Whether or not SBF spends a day in prison, or multiple lifetimes, the future of SBF means nothing to Bitcoin maximalists. In truth, if SBF walks free, the event will only confirm a greater Ponzi scheme that Bitcoiners are well aware of.

Bitcoin maximalists continue to preach, and events such as the collapse of FTX (among numerous other exchanges) are dire reminders of Nakamoto’s words that kicked off the introduction of Bitcoin’s white paper: “Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties. […] While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.”

There were and continue to be many lessons to be learned when examining the greed, lack of empathy and overall corruption humans have witnessed throughout history; and as events of this magnitude unfold, at the heart of every failure is trust — or a lack thereof.

Bitcoin’s market capitalization from 2013-2023. Source: CoinMarketCap

Bitcoin’s proof-of-work model — including but not limited to how transactions occur, timestamps are recorded, hash rates adjust, the network broadcasts nodes, incentives are rewarded, verification occurs and privacy is encoded — is the solution many Bitcoiners have come to take comfort in. The trust lies in the protocol rather than in individuals. Time and time again, a broken world and unscrupulous actors make the case for a trustless system.

Related: From the NY Times to WaPo, the media is fawning over Bankman-Fried

No matter how well-regulated, designed or engineered future financial systems, exchanges or “cryptocurrencies” claim to be, they all have the same failure point: human nature and greed.

Bitcoiners realize this, and as many more become aware of financial fraud — whether impacted directly or indirectly — Bitcoin continues to emerge as the most obvious solution. SBF may teach a new generation of “investors” the same hard lesson learned by their parents: When something is too good to be true, it often is.

The failure of FTX is not a surprise, nor are the potential connections between SBF and high-ranking officials. The fact that punishments may not fit the crime(s) shouldn’t come as a surprise, either. In truth, maximalists realize that Bitcoin will be around long after the SBF dust has settled. Bring on the next Ponzi scheme — Bitcoin maximalists appear immune.

Kenneth Minesinger is a professor of law at California Baptist University. He obtained his J.D. from Western State University College of Law after completing his undergraduate career at California State University at San Bernardino.

Dr. Riste Simnjanovski is a professor of public administration at California Baptist University. He obtained his doctoral degree from the University of La Verne.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.


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Bitcoin Has Entered Into The Early Bull Phase — Crypto Pundit Avers ⋆ ZyCrypto

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Still Bullish: Billionaire Money Manager Bill Miller Maintains View Bitcoin Will Rise Again Despite FTX Chaos

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Ki Young Ju, the CEO of data analytic firm CryptoQuant is convinced that Bitcoin is on the cusp of a major lift-off as crypto traders continue to switch from a risk-off to risk-on mode.

Earlier yesterday, Young tweeted that Bitcoin had “entered into the early bull phase”, suggesting that the top cryptocurrency by market capitalization could be preparing to push higher. Despite plunging by roughly 77% on the back of macroeconomic headwinds and a wider route in the crypto industry last year, Bitcoin has had a good run so far this year. This month alone, the crypto asset’s value grew over 40%, fully recovering from the FTX-induced sell-off and perching above levels last seen in August.

According to Young, whereas the asset’s price could pull back following the recent pump, there is a higher chance that it will continue to rise as various metrics turn positive. Highlighting the MVRV ratio, a profit and loss indicator that measures if the bitcoin price is undervalued or overvalued, the pundit noted that most investors were still underwater, reducing the incentive to sell.

Typically, when MVRV is above 3.7 (red area), bitcoin is said to be overvalued (market tops), and when it is below 1 (green area), bitcoin is said to be undervalued (market bottom). Recently the MVRV indicator moved above 1 (1.07), signalling the beginning of a bull cycle. 

In Young’s words;

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“No one would want to sell here at a significant loss. If someone sells a lot, it’s highly likely forced & unwanted selling due to bankruptcy, government-seized coins, etc.”

On Wednesday, Young also stated that there was a likelihood that wealthy investors would purchase struggling US-based Bitcoin (BTC) mining companies and their crypto holdings at a discount this year, preventing further miner capitulation. According to him, such acquisitions would significantly remove systematic risks associated with the mining sector, igniting a bullish storm for BTC and other cryptocurrencies.

“BTC miner capitulation might play out differently this time. Less likely, but it could be bullish if someone(s) acquires US-based Bitcoin mining companies and their crypto holdings at a significant discount this year,” he said.

Notably, the total supply of BTC in loss hit a 9-month-low this week, the lowest since April 2022, when Bitcoin was trading in the $40,000 range. Cryptoquant noted that “every time the supply in loss reaches values above 50%, capitulations occur, and price bottoms can be identified along Bitcoin’s history.” Currently, 32% of Bitcoin’s total supply is in loss after dropping from about 55% a month ago.

BTCUSD Chart by TradingView

At press time, Bitcoin was trading at $23,049, up 0.14% in the past 24 hours, according to data from CoinMarketCap.


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FTX Attorneys To Drag SBF’s Parents And Brother In Questioning About Their Personal Wealth

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FTX

The tragedy of FTX appears to be becoming more personal, as the bankrupt exchange’s legal counsels are now seeking to drag the founder’s family members and grill them about how they established their affluence.

In a court filing, FTX attorneys requested that Sam Bankman-Fried’s parents, Joseph Bankman and Barbara Fried, testify under oath and produce financial papers regarding their personal fortune as part of the company’s effort to reclaim funds that may be used to repay creditors.

Gabriel, the brother of former FTX CEO Bankman-Fried, will also be questioned in court over any financial benefits he may have gotten from the company.

SBF, although being collaborative to the point of spending the rest of his life in prison, has neglected to provide federal prosecutors with all the necessary information regarding the diverted money, resulting in the current situation.

Image: Euronews

Lawyers Seek Answer From SBF Family If They Received Money From FTX

In light of claims that FTX shifted billions of dollars in investor cash to prop up his Alameda Research trading unit, federal authorities have accused him with fraud. SBF entered a not-guilty plea.

According to reports, other FTX executives may be subject to the same inquiry in an attempt to locate assets associated with the bankrupt cryptocurrency exchange.

Sources also have it that Bankman-Fried’s mother provided tax advice and recruitment assistance to FTX personnel.

SBFFTX former CEO, Sam Bankman-Fried. Image: CNA.

Reportedly, his father served as a tax counsel to employees of the company and provided recommendations for the appointment of the company’s legal team.

Supposedly, Gabriel established a lobbying group and housed its operations in a mansion worth several million dollars not far from the U.S. Capitol.

It has been stated that his mother and brother are not helping with the investigation that is currently taking place into FTX.

Reuters reported in November that Bankman-Fried’s parents were signatories on a $16.4 million residence in the Bahamas, which was designated in property records as a “holiday home.”

FTX Owes Thousands Of Creditors  Money

SBF faces eight criminal counts, including violations of campaign finance regulations and wire fraud. Since his extradition from the Bahamas to the United States, he has been under house arrest at his parents’ home. His trial is scheduled to commence in October.

After the collapse of the once-powerful cryptocurrency exchange in November, newly released bankruptcy records revealed thousands of creditors to whom FTX owes funds.

Wall Street stalwarts like JPMorgan and Goldman Sachs were included on the 116-page list of creditors, which also included firms, charities, people, and other institutions.

Crypto total market cap at $996 billion on the daily chart | Chart: TradingView.com

Meanwhile, FTX has opposed to a request from the U.S. Department of Justice for an independent inquiry into the company’s collapse, claiming that it is already conducting a comprehensive review that includes family members of SBF.

FTT, the native token of the FTX cryptocurrency exchange, had risen by 185% over the last 30 days.

At the time of writing, the altcoin was trading for $1,940, a decrease of approximately 22% from its previous price of $2,4.00.

-Featured image: Novel Suspects


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Kraken Appoints CJ Rinaldi as Chief Compliance Officer

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Kraken Appoints CJ Rinaldi as Chief Compliance Officer

New CCO brings three decades of financial services experience

SAN FRANCISCO – Jan. 24, 2023 – Kraken, one of the world’s largest and most-trusted crypto platforms, today announced the appointment of CJ Rinaldi as Chief Compliance Officer. CJ’s decades of experience, both in traditional and decentralized finance, will further strengthen Kraken’s compliance program amid a fast-evolving regulatory landscape. 

“To accelerate the adoption of cryptocurrencies around the world, Kraken must continue to navigate an increasingly complex regulatory landscape,” said Kraken’s incoming CEO David Ripley. “CJ’s impressive international career in both the private and public sectors positions us for continued success in meeting global compliance needs.”

CJ was previously Chief Compliance Officer at Blockchain.com, where he was tasked with building out global compliance frameworks and mitigating compliance risk for the firm. Prior to that, CJ had several roles at Deutsche Bank, including Chief Compliance Officer for its swap dealer and US broker dealer. He also served as Head of Business Line Anti-Financial Crimes Compliance supporting its investment bank, where he led a global team tasked with mitigating financial crime risk, implementing procedures and controls through effective and efficient operational solutions. 

“Kraken’s commitment to security and transparency while building world class products and services makes it the gold standard in an industry that’s shaping the future of finance. It is trusted players like Kraken that will help ensure the crypto ecosystem operates within all regulatory frameworks” says Rinaldi. “I am excited to grow Kraken’s data-driven approach to compliance, ensuring the protection of both the company and its clients.”

Prior to Deutsche Bank, CJ worked at UBS Investment Bank in multiple roles, including as Global Head of Client Infrastructure. He also served as Senior Counsel in the Enforcement Division of the U.S. Securities and Exchange Commission.

For more information, please visit kraken.com or reach out to [email protected].

About Kraken:

Kraken is one of the world’s longest-standing digital asset platforms. Globally, Kraken clients trade more than 200 digital assets and 8 different national currencies, including GBP, EUR, USD, CAD, JPY, CHF, AUD and AED.

Kraken was founded in 2011 and was one of the first exchanges to offer spot trading with margin, parachain auctions, staking, regulated derivatives and index services. In 2022, it launched a custodial NFT marketplace. Kraken is trusted by over 9 million traders and institutions around the world and offers professional, round-the-clock online support. Kraken was the first company to have ever conducted a Proof of Reserves audit and has since committed to undergoing Proof of Reserves on a regular basis.

Kraken is backed by investors including Tribe Capital, SkyBridge, Hummingbird Ventures, Blockchain Capital, Digital Currency Group, among others.

Kraken markets can be monitored and traded through the Kraken iOS and Android apps, and through the Cryptowatch iOS, Android and Desktop apps.

Contacts: 

[email protected]

Alex Rapoport

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These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell or hold any cryptoasset or to engage in any specific trading strategy. Some crypto products and markets are unregulated, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the cryptoasset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your cryptoassets and you should seek independent advice on your taxation position. For more information, please see our Terms of Service.

 


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