Welcome to the Third World
The US Is Doing to the Crypto Industry What It's Often Done to Emerging Markets
“I’m from where people pray to the gods of their conquerors /
and practically every president’s a money launderer /
from where the only place democracy’s acceptable /
is if America’s candidate is electable /
and they might even have a Black president, but he’s useless /
‘cuz he does not control the economy, stupid /
-Immortal Technique, “The 3rd World”
The United States has a long history of overthrowing leaders in developing countries when those leaders don’t act in accordance with American hegemony.
In other words, if leaders don’t don’t act as a puppet for the United States government, US agencies like the CIA often attempt to dispose of these leaders.
Now that the US government has lost its puppet leader for the crypto industry — Sam Bankman-Fried (SBF) — it’s attempting to dispose other leaders in the industry and maybe the industry as a whole.
(Before I continue: I know that the US government has yet to be openly hostile to bitcoin (BTC) — the one crypto asset that is in a class by itself (learn why in this video) — in its recent coup attempt on the crypto industry, but I do believe that the moves its making to undermine the crypto industry will ultimately result in its going after BTC. Hence, I stand with the crypto industry getting its fair shot to exist in the US, even though I think that most crypto assets are unnecessary/not something people should consider a store of value.)
Crypto Is an Emerging Market
In the worlds of finance and economics, the economies of developing nations are often referred to as “emerging markets”.
Investing in emerging markets is often a “high beta” play (see video to learn what this means, and subscribe to the channel to learn more lessons like this!) for a number of reasons, including the fact that it’s sometimes harder to sustain businesses in developing countries because of political instability.
And that political instability is often heightened if the United States government doesn’t like who’s in control of the country.
The US government likes leaders of developing countries who make it easy for it to extract resources from the country on the cheap.
Usually, the US uses institutions like the IMF and the World Bank to indebt countries to a point where they have no choice but offer up their natural resources, sometimes just to be able to service the interest on their debt.
Great article on that here: “Structural Adjustment: How the IMF and World Bank Repress Poor Countries and Funnel Their Resources to Rich Ones” (Bitcoin Magazine)
But I’m getting slightly off topic…
Let’s think of crypto as an emerging market (since that’s literally what it is.)
The United States more or less liked (I use this word liberally here; “tolerated” is probably a better word) crypto when it considered and tried to help position Sam Bankman-Fried — the sloppy bitch below — as the head of the crypto economy.
Why did the US government like crypto when it thought of SBF as the leader of the crypto economy?
Well, because SBF was funneling millions and millions of FTX users’ dollars to politicians (mostly Democrats).
He was the second largest donor to the Biden campaign.
But SBF is gone now. And with him went the US government’s tolerance for the crypto industry.
Goldman Gary Does His Best Impression of a CIA Director in This Crypto Coup
Now that there’s no more money to extract — except for when SEC Chair Gensler gets his rent seeking on, straight mafia style, and arbitrarily fines and threatens to fine highly-compliant crypto exchanges — the US has chosen to launch an all-out, unconstitutional coup against the crypto industry.
Let us remember that Gensler has little to no authority over the crypto industry.
He’s just a power-hungry unelected bureaucrat — truly one of the lowest forms of humanity — whose power is granted to him by Congress and legislatures, neither of which have granted him any power over crypto yet.
With that said, some players in the crypto industry do need to go.
I’m fine with Do Kwon of the TerraLUNA ecosystem being arrested this week. Though, I do hope he gets a fair trial, because it isn’t completely apparent that he did anything illegal. If he did, however, send him to jail.
It’s also fine by me that the CFTC is cracking down on Binance. If Binance did something illegal, the powers that be at the exchange deserve to be charged and tried for it.
I guess I’d just like to see regulators crack down on the illegal things that big banks do as much as they’re currently cracking down on crypto.
But anyway — not everyone involved in the crypto industry is a criminal.
And maybe the biggest criminal in the whole space — SBF — was the one that Gensler actually liked best.
Gensler likely wanted to use SBF to help him control the space. But, as I said, SBF is gone now, so Gensler is now doing what he can do control crypto another way.
He’s trying to push it into the hands of TradFi institutions (and out of the hands of financial institution newcomers like Coinbase and Kraken). See:
“Nasdaq Eyes Crypto Custody Launch by End of Second Quarter” (Bloomberg)
Most probably read these headlines and think “That’s great! The institutions are here! Price go up now!”
What they don’t realize is that these institutions custody the crypto assets you buy through them for you. So, you don’t actually own what you purchase. You just own an IOU for what you purchase.
This is to say that you can actually use the assets. You can only speculate on their prices through these platforms.
This more or less defeats most of the purpose of crypto assets — especially bitcoin (BTC).
And buying the paper versions of these assets will likely result in the suppression of their prices.
Elizabeth Warren: Madam Despot
The only member of the US government that seems to be more anti-crypto than Gensler is Sen. Elizabeth Warren — who’s currently in the running for the ULTIMATE BOOMER AUTHORITARIAN AWARD.
I don’t care if Satan his motherfucking self runs against her in 2024, I’ll be donating to whoever her opponent is in the next election.
And I’m looking forward to just how many Democrats she turns into Independents as a result of this stance of hers.
I know I’m now done with the Democratic party.
Thanks to what this Democratic administration and what Democratic politicians like Warren are doing to crypto, I’m now a single-issue voter and plan to re-register as an Independent.
Lots more even outside of crypto world going that route, as well.
So, yes, the US government is now waging war on the emerging market that is crypto and the industry that surrounds it for reasons similar to those that have led it to wage war the leaders of the economies of emerging markets who didn’t want to play by its rules.
This US government will lose, though, and innovation will go where its welcomed.
The New Renaissance is going to happen whether government of “the land of the free” likes it or not.
Shame on those in power in the US government who are trying to stop everyday Americans from being a part of it.
Best,
Frank
Twitter: @frankcorva
Currently reading: Angela Davis: An Autobiography, by Angela Davis
Read this week: “My Best Friend Died of Loneliness” (The Free Press)
