5 ms·

FDIC has released 175 internal documents on "Operation Chokepoint 2.0"

55 points by janandonly 2y ago

actionfromafar 2y ago
Are FDIC employees also laid off?
- joezydeco 2y ago
  I'm giving it a non-zero chance that the bulls running through the china shop are going to try and eliminate the FDIC because of nonsense like this. I can't imagine how bad the bank run will be if that happens.
  - pjc50 2y ago
    Everything is probably ok-ish until this lot try to pass a budget, which will be Crank Central and we get to see what global Liz Truss looks like.
  - CamperBob2 2y ago
    I don't expect a bank run -- where else are you going to put the money? T-bills? Got some bad news for you there...
    - dole 2y ago
      The Mattress, like everyone else.
    - pjc50 2y ago
      There's a constant stream of people advertising gold, silver and now cryptocurrency as apocalypse hedges. I still have the gold sovereigns I bought in 2008, but that wasn't anything like "all in", more of a shiny desk novelty.
    - ben_w 2y ago
      DAX, FTSE, perhaps non-US bonds.
    - unsnap_biceps 2y ago
      I keep pondering if I should stash a bunch of cash overseas in Europe or what not. But then I worry if the dollar crashes, does everything else crash anyway?
    - AnimalMuppet 2y ago
      First, cash. Actual, physical cash. As much as they'll let me take. Second, why not T-bills? When would T-bills be a problem? If the federal government went down. Compared to a bank, which would be a problem if the bank went down. Well, which is more likely to happen? I think the bank is far more likely.
      - joezydeco 2y ago
        The cash approach is probably what I plan to do. At least enough for 2-3 months of expenses. If I keep overthinking this I would worry about hyperinflation, but one anxiety attack at a time, right?
        AnimalMuppet 2y ago
        Nah. A bunch of bank failures are going to cause the opposite of hyperinflation. (I mean, hyperinflation could happen you while you're worried about bank failures...)
wbl 2y ago
Let's be real clear. The crypto bros and VCs killed not one but two banks that started getting into trouble after being very accommodating by pulling out money. Now they want the rest of the financial system to keep doing business with them.
- PaywallBuster 2y ago
  maybe that means the space should be more competitive with more banks freely offering services to crypto businesses without being pressured by the government maybe that's why most crypto companies end up being too concentrated on a handful of banks only
  - wbl 2y ago
    No bank is going to take flighty deposits from money launderers who habitually suborn financial institutions.
- hbfdhfdhadfhnfa 2y ago
  [flagged]
- tock 2y ago
  It's the banks fault for terrible investments not the customers. Any customer would withdraw their money if they knew their bank is on the brink of collapse. Many banks have no problem taking on unnecessary risk because they believe the govt will bail them out anyway.
  - deleted 2y ago
    [deleted]
  - contagiousflow 2y ago
    And before the reserve there were no banks making unnecessary risks?
- paulsutter 2y ago
  Could you expand on this? Sounds like an interesting story
01HNNWZ0MV43FF 2y ago
Hm, black redaction boxes. Just in case it changes... `curl https://www.fdic.gov/foia/correspondence-related-crypto-related-activities https://www.fdic.gov/foia/correspondence-related-crypto-rela... | sha384sum` returns `57544123a92d7f318aa1e1ff98e30993ced7c0aaa37faba4672a12d377f65f833bfc21ca184785e9e5af59340731f885` for me right now Also it's a 150 MB PDF of scanned images, for anyone with data limits
- aragonite 2y ago
  At least you can't trivially circumvent the redaction just by copy and paste which was the case for lots of PDFs from the Obama years, such as this one: https://obamawhitehouse.archives.gov/sites/default/files/microsites/ostp/PCAST_Jan2013_Comments.pdf https://obamawhitehouse.archives.gov/sites/default/files/mic...
xhkkffbf 2y ago
It seems like banking services should be available for all legal activities. Allowing (or forcing) the banks to discriminate against one subset of society enables may be great if you hate that subset, but some day the tides may change and you'll end up on the receiving end.
- duxup 2y ago
  Don't banks make those business decisions all the time anyway?
- devmor 2y ago
  If a legal activity is heavily overrepresented by financial crime, as crypto is, it would be incredibly irresponsible not to take action from a regulatory level. A full-stop is surely overboard, but a pause on business related to this activity until mitigation strategies are implemented seems reasonable to me. For a microcosm example, I work in fintech and have had to pause all gift card processing on payment gateways due to insecure/improperly implemented payment forms belonging to integrators being used to test stolen gift cards or do refund scams.
  - monero-xmr 2y ago
    Two of the most fraud areas of society are in SNAP benefits and improper Medicaid payments. Yet we never seem to take regulatory action to solve this over-representation of crime.
    - SpicyLemonZest 2y ago
      Because they don't pose systemic risk. If it were possible for a customer doing SNAP fraud to do so much damage that the stores they shop at are forced to close, there'd be a lot more regulation.
    - lotsofpulp 2y ago
      You can even rise to the level of US Senator if you defraud Medicare/Medicaid: https://en.wikipedia.org/wiki/Rick_Scott https://en.wikipedia.org/wiki/Rick_Scott
apsec112 2y ago
Can we please change the title? "Chokepoint 2.0", from skimming, doesn't appear in the documents at all. Quoth Patrick McKenzie: "Nic Carter, a crypto VC and podcaster, who occasionally does very good work, has been steadfastly attempting to brand a constellation of regulatory activities regarding crypto as Choke Point 2.0. This branding is an attempt to delegitimize them by associating them with politically-motivated lawlessness. It has since become popular among crypto advocates. Unlike Operation Choke Point, which actually was a centrally directed operation with written project plans, status meetings, ongoing progress reports, and a code name decided by the participants (who, in hindsight, should have talked to their own Comms department and picked something that didn’t sound nefarious to describe their plans), Choke Point 2.0 stretches like taffy to attach to any recent regulatory activity crypto advocates don’t like. So we’ll have to review quite an involved history of very disparate issues to give advocates a fair hearing." (whereupon follows many details of crypto and bank regulation and what happened in 2023, which is much more readable than this pile of documents) https://www.bitsaboutmoney.com/archive/debanking-and-debunking/ https://www.bitsaboutmoney.com/archive/debanking-and-debunki...
throw0101c 2y ago
From the Project 2025 chapter (#24) of the Federal Reserve: > As in the Suffolk System, competition keeps banks from overprinting or lending irresponsibly. This is because any bank that issues more paper than it has assets available would be subject to competitor banks’ presenting its notes for redemption. In the extreme, an overissuing bank could be liable to a bank run. Reckless banks’ competitors have good incentives to police risk closely lest their own holdings of competitor dollars become worthless.[Fn24] […] > [Fn24] Reforms should also strengthen the incentives of bank depositors (customers) and bank shareholders (owners) to monitor bank portfolios. Deposit insurance undermines the former, as even President Franklin Roosevelt recognized. Bailouts and last-resort lending undermine the latter. * https://static.project2025.org/2025_MandateForLeadership_CHAPTER-24.pdf https://static.project2025.org/2025_MandateForLeadership_CHA... Reading the entire chapter, I got the impression that they want to take the entire US banking system back to the 1800s, including references to free banking: * https://en.wikipedia.org/wiki/Free_banking https://en.wikipedia.org/wiki/Free_banking In one place stating: > In this way, free banking leads to stable and sound currencies and strong financial systems because customers will avoid the riskier issuers, driving them out of the market. Which, AFAICT, is contrary to the history record: * https://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg https://en.wikipedia.org/wiki/File:US_Historical_Inflation_A... * https://en.wikipedia.org/wiki/The_Great_Deflation https://en.wikipedia.org/wiki/The_Great_Deflation
- xnx 2y ago
  What every fan of removing protections ignores is that we have already tried the version without the regulation and collectively chose (imperfectly, to be sure) the current system. It is much harder for them to make an argument that we should return to the glory days of bank runs, child-labor, rivers that caught fire, tainted food, and childhood mortality.
  - throw0101c 2y ago
    > It is much harder for them to make an argument that we should return to the glory days of bank runs, child-labor, rivers that caught fire, tainted food, and childhood mortality. This is one of the things about Bitcoin-as-currency that makes no sense to me: it's basically gold-standard-but-digital. We've tried the gold standard and got rid of it for good reason: * https://archive.is/https://www.theatlantic.com/business/archive/2012/08/why-the-gold-standard-is-the-worlds-worst-economic-idea-in-2-charts/261552/ https://archive.is/https://www.theatlantic.com/business/arch... * http://archive.is/http://www.businessinsider.com/why-the-gold-standard-is-the-worst-idea-in-the-world-in-one-chart-2012-9 http://archive.is/http://www.businessinsider.com/why-the-gol... > The idea behind a gold standard is that a currency becomes tied to a commodity with a stable value. The great problem with this is that gold does not have a stable value. Like any other commodity, its relative value goes up and down. For instance, in September 2022, US dollar milk prices were rising over 16%. In gold terms milk prices were rising over 23%—dangerously high inflation. * https://www.ubs.com/it/en/wealthmanagement/insights/article-adp/global/en/wealth-management/insights/chief-investment-office/market-insights/paul-donovan/2024/gold-currency.html https://www.ubs.com/it/en/wealthmanagement/insights/article-... The tight monetary policy (dictated by the rules of then-orthodox gold standard) made the Great Depression worse: * https://www.nber.org/books-and-chapters/financial-markets-and-financial-crises/gold-standard-deflation-and-financial-crisis-great-depression-international-comparison https://www.nber.org/books-and-chapters/financial-markets-an... And it was only after leaving it that countries started to recover: > In the end, recovery from the Great Depression does not begin until countries give up on the combination of the Bagehot Rule and of commitment to sound gold-standard finance. Those countries that have central banks willing to print up enough money so that people are willing to spend it--it is when you adopt such policies that your economy begins to recover. If you don’t, you become France, which sticks to the gold standard all the way up to 1937, and never gets a recovery. When World War II begins, Nazi Germany’s production--equal to France's in 1933--had doubled between 1933 and 1939. French production had fallen by 15%. * https://delong.typepad.com/delong_long_form/2013/10/the-great-depression-from-the-perspective-of-today-and-today-from-the-perspective-of-the-great-depression.html https://delong.typepad.com/delong_long_form/2013/10/the-grea... Why would we want to return illiquidity and handcuff ourselves in our ability to respond to economic storms?
horsawlarway 2y ago
I'm pretty mixed here. I think the general stance of allowing legal cryptocurrencies is a mistake (I'll be clear - I've used bitcoin as an actual currency on dark markets. It's ok for that purpose, but that purpose is opposed to sane government policy. As a speculative asset, I think it's a scam.) But it is legal. So I'm mixed because I feel like the actual governmental response to this at a legislative level (congress) has been a complete failure. It's hard to argue that crypto is not a net negative right now - It's used to generate new "coins" that are just outright scams and rugpulls, that manipulate and abuse the less educated in the populace (and for the all the folks with they "they deserve it" attitude... they are your follow citizens. For good or bad their welfare impacts your welfare. You shouldn't be happy they're getting scammed and abused) - It's consistent with criminal activity in hacking/blackmail for corporations from foreign agents - The larger coins (ex bitcoin) are mostly controlled by non-us mining groups, outside the control of the government, but the government is going to be on the hook for costs related to enforcement (courts, banks, fdic, etc). - It's a bad hedge as an asset (it's price tends to correlate strong with the markets, indicating it's not really a digital gold). ---- Frankly - I think for all the issues I otherwise have with a country like China, their stance on crypto is a sane response. It clearly shouldn't be legal, but I wouldn't spend much on enforcement.
- suraci 2y ago
  My current theory is that the main function of BTC is to act as a mule for Wall Street to transport dollars. the primary function of meme coins is to enable influencers(and the family of the president...) to raise funds
  - red-iron-pine 2y ago
    wall street doesn't need mules to move money -- they already have insane loopholes to exploit. this is to create a shadow regime and provide alternative markets. it exists because people all over the world need to launder money, and the BRICs have an incentive to shun it (but still allow it by neglect) as a way to challenge the US Petro-Dollar
djoldman 2y ago
Skimming this stuff reinforces the belief that one will regret attempting to compete in a market with any significant regulatory requirement. Compliance seems boring, exhausting, complicated, occasionally arbitrary, and sometimes petty.
- robocat 2y ago
  Regulatory thickets are moats for businesses that know how to use them. And some businesses encourage regulations because it's a financial advantage: e.g. H&RBLOCK. In New Zealand there's large companies that encourage excessive and pointless safety regulations, because they have the teams to work it and small businesses lack resources to fairly compete.
bananapub 2y ago
so incredibly exciting that it's US Federal government policy for cryptocurrencies to defraud normies and then cause a global financial crisis again. perhaps we'll learn a lesson about allowing sociopathic billionaires to exist in future.
1vuio0pswjnm7 2y ago
Thought experiment: If all bitcoin holders redeemed their bitcoin for US dollars, would this affect the "price" of bitcoin, i.e., the value of bitcoin in US dollars. If yes, how, i.e., up or down.
- Volundr 2y ago
  If all Bitcoin holders sold their Bitcoins, who is buying? You need to have a counterparty to the transaction. If everyone is liquidating an asset, it's price will be zero, as no one is buying.
davidmark014700 2y ago
In the vast digital expanse of the blockchain, where anonymity and decentralization reign supreme, crime can flourish in the shadows. When a group of sophisticated cybercriminals orchestrated one of the largest cryptocurrency heists in history—stealing 500,000 bitcoins from unsuspecting investors—it seemed like the funds were gone forever. However, the criminals hadn’t accounted for Galaxy Ethical Tech (GET), a cutting-edge cybersecurity firm dedicated to making blockchain technology safer for all. The scam was a masterclass in deception. Under the guise of a promising new decentralized finance (DeFi) project, the fraudsters lured investors with promises of high-yield staking rewards. Thousands of people poured their savings into what they believed was a revolutionary blockchain venture. However, in a single coordinated move, the perpetrators executed a “rug pull” – draining all the deposited funds and vanishing into the depths of the dark web.Authorities and independent investigators initially struggled to track the stolen bitcoins. The criminals had used tumbling services, privacy wallets, and AI-driven laundering techniques to obscure the transaction history. The blockchain, though transparent, was now a maze of dead ends. When law enforcement agencies hit a wall, they turned to Galaxy Ethical Tech, a cybersecurity powerhouse specializing in ethical AI, blockchain forensics, and quantum-resistant security solutions. Led by Dr. Elena Vasquez, a former cryptographic expert at MIT, GET had a reputation for solving the unsolvable.Upon taking the case, GET deployed its proprietary AI-powered blockchain analysis tool, NovaTrace. Unlike traditional tracking methods, NovaTrace used predictive analytics, machine learning, and behavioral forensics to follow digital footprints left behind by cybercriminals.The criminals had scattered the stolen bitcoins across thousands of wallets, splitting transactions into fragments so tiny they seemed insignificant. They leveraged Layer 2 solutions, privacy coins, and decentralized exchanges to mask their movements. However, NovaTrace didn’t just look at transaction IDs; it analyzed patterns, behaviors, and historical connections between wallet addresses.Within 72 hours, the AI had uncovered something crucial—several of the scammers had unknowingly reused addresses linked to previous fraudulent schemes. Even the most careful criminals had left digital fingerprints. Additionally, GET’s Quantum Ledger Recon (QLR), an advanced cryptographic tool, identified a vulnerability in a few of the laundering methods used. Some of the criminals had relied on outdated mixers that inadvertently leaked metadata. By cross-referencing this information with data from dark web marketplaces and blacklisted addresses, GET pinpointed the real-world identities of the masterminds.Armed with undeniable evidence, GET worked alongside Interpol, the FBI Cyber Division, and blockchain intelligence firms to orchestrate a global sting operation. Multiple arrests were made across three continents, and a significant portion of the stolen funds was frozen in digital escrow before they could be laundered further. Through a combination of legal actions, smart contract rollbacks, and cooperation with major exchanges, GET successfully recovered 92% of the stolen bitcoins—totaling approximately $30 billion at market value. The recovered funds were returned to victims, marking a historic win for blockchain justice.The case became a landmark example of how ethical technology could restore trust in decentralized finance. Galaxy Ethical Tech didn’t just recover stolen assets; they set a precedent for AI-driven fraud detection in Web3, proving that even in an era of anonymized transactions, justice could still prevail.As cybercriminals evolve, so does GET—pioneering a future where the blockchain remains a force for good, not greed. contact them via Email: galaxyethicaltech@mail.com Whatsapp: +15072712442
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sebastiangorka 2y ago
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garrisswimmer 2y ago
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55 points by janandonly 2y ago

actionfromafar 2y ago

Are FDIC employees also laid off?

joezydeco 2y ago
I'm giving it a non-zero chance that the bulls running through the china shop are going to try and eliminate the FDIC because of nonsense like this. I can't imagine how bad the bank run will be if that happens.
- pjc50 2y ago
  Everything is probably ok-ish until this lot try to pass a budget, which will be Crank Central and we get to see what global Liz Truss looks like.
- CamperBob2 2y ago
  I don't expect a bank run -- where else are you going to put the money? T-bills? Got some bad news for you there...
  - dole 2y ago
    The Mattress, like everyone else.
  - pjc50 2y ago
    There's a constant stream of people advertising gold, silver and now cryptocurrency as apocalypse hedges. I still have the gold sovereigns I bought in 2008, but that wasn't anything like "all in", more of a shiny desk novelty.
  - ben_w 2y ago
    DAX, FTSE, perhaps non-US bonds.
  - unsnap_biceps 2y ago
    I keep pondering if I should stash a bunch of cash overseas in Europe or what not. But then I worry if the dollar crashes, does everything else crash anyway?
  - AnimalMuppet 2y ago
    First, cash. Actual, physical cash. As much as they'll let me take. Second, why not T-bills? When would T-bills be a problem? If the federal government went down. Compared to a bank, which would be a problem if the bank went down. Well, which is more likely to happen? I think the bank is far more likely.
    - joezydeco 2y ago
      The cash approach is probably what I plan to do. At least enough for 2-3 months of expenses. If I keep overthinking this I would worry about hyperinflation, but one anxiety attack at a time, right?
      - AnimalMuppet 2y ago
        Nah. A bunch of bank failures are going to cause the opposite of hyperinflation. (I mean, hyperinflation could happen you while you're worried about bank failures...)

wbl 2y ago

Let's be real clear. The crypto bros and VCs killed not one but two banks that started getting into trouble after being very accommodating by pulling out money. Now they want the rest of the financial system to keep doing business with them.

PaywallBuster 2y ago
maybe that means the space should be more competitive with more banks freely offering services to crypto businesses without being pressured by the government maybe that's why most crypto companies end up being too concentrated on a handful of banks only
- wbl 2y ago
  No bank is going to take flighty deposits from money launderers who habitually suborn financial institutions.
hbfdhfdhadfhnfa 2y ago
[flagged]
tock 2y ago
It's the banks fault for terrible investments not the customers. Any customer would withdraw their money if they knew their bank is on the brink of collapse. Many banks have no problem taking on unnecessary risk because they believe the govt will bail them out anyway.
- deleted 2y ago
  [deleted]
- contagiousflow 2y ago
  And before the reserve there were no banks making unnecessary risks?
paulsutter 2y ago
Could you expand on this? Sounds like an interesting story

01HNNWZ0MV43FF 2y ago

Hm, black redaction boxes. Just in case it changes... `curl https://www.fdic.gov/foia/correspondence-related-crypto-related-activities https://www.fdic.gov/foia/correspondence-related-crypto-rela... | sha384sum` returns `57544123a92d7f318aa1e1ff98e30993ced7c0aaa37faba4672a12d377f65f833bfc21ca184785e9e5af59340731f885` for me right now Also it's a 150 MB PDF of scanned images, for anyone with data limits

aragonite 2y ago
At least you can't trivially circumvent the redaction just by copy and paste which was the case for lots of PDFs from the Obama years, such as this one: https://obamawhitehouse.archives.gov/sites/default/files/microsites/ostp/PCAST_Jan2013_Comments.pdf https://obamawhitehouse.archives.gov/sites/default/files/mic...

xhkkffbf 2y ago

It seems like banking services should be available for all legal activities. Allowing (or forcing) the banks to discriminate against one subset of society enables may be great if you hate that subset, but some day the tides may change and you'll end up on the receiving end.

duxup 2y ago
Don't banks make those business decisions all the time anyway?
devmor 2y ago
If a legal activity is heavily overrepresented by financial crime, as crypto is, it would be incredibly irresponsible not to take action from a regulatory level. A full-stop is surely overboard, but a pause on business related to this activity until mitigation strategies are implemented seems reasonable to me. For a microcosm example, I work in fintech and have had to pause all gift card processing on payment gateways due to insecure/improperly implemented payment forms belonging to integrators being used to test stolen gift cards or do refund scams.
- monero-xmr 2y ago
  Two of the most fraud areas of society are in SNAP benefits and improper Medicaid payments. Yet we never seem to take regulatory action to solve this over-representation of crime.
  - SpicyLemonZest 2y ago
    Because they don't pose systemic risk. If it were possible for a customer doing SNAP fraud to do so much damage that the stores they shop at are forced to close, there'd be a lot more regulation.
  - lotsofpulp 2y ago
    You can even rise to the level of US Senator if you defraud Medicare/Medicaid: https://en.wikipedia.org/wiki/Rick_Scott https://en.wikipedia.org/wiki/Rick_Scott

apsec112 2y ago

Can we please change the title? "Chokepoint 2.0", from skimming, doesn't appear in the documents at all. Quoth Patrick McKenzie: "Nic Carter, a crypto VC and podcaster, who occasionally does very good work, has been steadfastly attempting to brand a constellation of regulatory activities regarding crypto as Choke Point 2.0. This branding is an attempt to delegitimize them by associating them with politically-motivated lawlessness. It has since become popular among crypto advocates. Unlike Operation Choke Point, which actually was a centrally directed operation with written project plans, status meetings, ongoing progress reports, and a code name decided by the participants (who, in hindsight, should have talked to their own Comms department and picked something that didn’t sound nefarious to describe their plans), Choke Point 2.0 stretches like taffy to attach to any recent regulatory activity crypto advocates don’t like. So we’ll have to review quite an involved history of very disparate issues to give advocates a fair hearing." (whereupon follows many details of crypto and bank regulation and what happened in 2023, which is much more readable than this pile of documents) https://www.bitsaboutmoney.com/archive/debanking-and-debunking/ https://www.bitsaboutmoney.com/archive/debanking-and-debunki...

throw0101c 2y ago

From the Project 2025 chapter (#24) of the Federal Reserve: > As in the Suffolk System, competition keeps banks from overprinting or lending irresponsibly. This is because any bank that issues more paper than it has assets available would be subject to competitor banks’ presenting its notes for redemption. In the extreme, an overissuing bank could be liable to a bank run. Reckless banks’ competitors have good incentives to police risk closely lest their own holdings of competitor dollars become worthless.[Fn24] […] > [Fn24] Reforms should also strengthen the incentives of bank depositors (customers) and bank shareholders (owners) to monitor bank portfolios. Deposit insurance undermines the former, as even President Franklin Roosevelt recognized. Bailouts and last-resort lending undermine the latter. * https://static.project2025.org/2025_MandateForLeadership_CHAPTER-24.pdf https://static.project2025.org/2025_MandateForLeadership_CHA... Reading the entire chapter, I got the impression that they want to take the entire US banking system back to the 1800s, including references to free banking: * https://en.wikipedia.org/wiki/Free_banking https://en.wikipedia.org/wiki/Free_banking In one place stating: > In this way, free banking leads to stable and sound currencies and strong financial systems because customers will avoid the riskier issuers, driving them out of the market. Which, AFAICT, is contrary to the history record: * https://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg https://en.wikipedia.org/wiki/File:US_Historical_Inflation_A... * https://en.wikipedia.org/wiki/The_Great_Deflation https://en.wikipedia.org/wiki/The_Great_Deflation

xnx 2y ago
What every fan of removing protections ignores is that we have already tried the version without the regulation and collectively chose (imperfectly, to be sure) the current system. It is much harder for them to make an argument that we should return to the glory days of bank runs, child-labor, rivers that caught fire, tainted food, and childhood mortality.
- throw0101c 2y ago
  > It is much harder for them to make an argument that we should return to the glory days of bank runs, child-labor, rivers that caught fire, tainted food, and childhood mortality. This is one of the things about Bitcoin-as-currency that makes no sense to me: it's basically gold-standard-but-digital. We've tried the gold standard and got rid of it for good reason: * https://archive.is/https://www.theatlantic.com/business/archive/2012/08/why-the-gold-standard-is-the-worlds-worst-economic-idea-in-2-charts/261552/ https://archive.is/https://www.theatlantic.com/business/arch... * http://archive.is/http://www.businessinsider.com/why-the-gold-standard-is-the-worst-idea-in-the-world-in-one-chart-2012-9 http://archive.is/http://www.businessinsider.com/why-the-gol... > The idea behind a gold standard is that a currency becomes tied to a commodity with a stable value. The great problem with this is that gold does not have a stable value. Like any other commodity, its relative value goes up and down. For instance, in September 2022, US dollar milk prices were rising over 16%. In gold terms milk prices were rising over 23%—dangerously high inflation. * https://www.ubs.com/it/en/wealthmanagement/insights/article-adp/global/en/wealth-management/insights/chief-investment-office/market-insights/paul-donovan/2024/gold-currency.html https://www.ubs.com/it/en/wealthmanagement/insights/article-... The tight monetary policy (dictated by the rules of then-orthodox gold standard) made the Great Depression worse: * https://www.nber.org/books-and-chapters/financial-markets-and-financial-crises/gold-standard-deflation-and-financial-crisis-great-depression-international-comparison https://www.nber.org/books-and-chapters/financial-markets-an... And it was only after leaving it that countries started to recover: > In the end, recovery from the Great Depression does not begin until countries give up on the combination of the Bagehot Rule and of commitment to sound gold-standard finance. Those countries that have central banks willing to print up enough money so that people are willing to spend it--it is when you adopt such policies that your economy begins to recover. If you don’t, you become France, which sticks to the gold standard all the way up to 1937, and never gets a recovery. When World War II begins, Nazi Germany’s production--equal to France's in 1933--had doubled between 1933 and 1939. French production had fallen by 15%. * https://delong.typepad.com/delong_long_form/2013/10/the-great-depression-from-the-perspective-of-today-and-today-from-the-perspective-of-the-great-depression.html https://delong.typepad.com/delong_long_form/2013/10/the-grea... Why would we want to return illiquidity and handcuff ourselves in our ability to respond to economic storms?

horsawlarway 2y ago

I'm pretty mixed here. I think the general stance of allowing legal cryptocurrencies is a mistake (I'll be clear - I've used bitcoin as an actual currency on dark markets. It's ok for that purpose, but that purpose is opposed to sane government policy. As a speculative asset, I think it's a scam.) But it is legal. So I'm mixed because I feel like the actual governmental response to this at a legislative level (congress) has been a complete failure. It's hard to argue that crypto is not a net negative right now - It's used to generate new "coins" that are just outright scams and rugpulls, that manipulate and abuse the less educated in the populace (and for the all the folks with they "they deserve it" attitude... they are your follow citizens. For good or bad their welfare impacts your welfare. You shouldn't be happy they're getting scammed and abused) - It's consistent with criminal activity in hacking/blackmail for corporations from foreign agents - The larger coins (ex bitcoin) are mostly controlled by non-us mining groups, outside the control of the government, but the government is going to be on the hook for costs related to enforcement (courts, banks, fdic, etc). - It's a bad hedge as an asset (it's price tends to correlate strong with the markets, indicating it's not really a digital gold). ---- Frankly - I think for all the issues I otherwise have with a country like China, their stance on crypto is a sane response. It clearly shouldn't be legal, but I wouldn't spend much on enforcement.

suraci 2y ago
My current theory is that the main function of BTC is to act as a mule for Wall Street to transport dollars. the primary function of meme coins is to enable influencers(and the family of the president...) to raise funds
- red-iron-pine 2y ago
  wall street doesn't need mules to move money -- they already have insane loopholes to exploit. this is to create a shadow regime and provide alternative markets. it exists because people all over the world need to launder money, and the BRICs have an incentive to shun it (but still allow it by neglect) as a way to challenge the US Petro-Dollar

djoldman 2y ago

Skimming this stuff reinforces the belief that one will regret attempting to compete in a market with any significant regulatory requirement. Compliance seems boring, exhausting, complicated, occasionally arbitrary, and sometimes petty.

robocat 2y ago
Regulatory thickets are moats for businesses that know how to use them. And some businesses encourage regulations because it's a financial advantage: e.g. H&RBLOCK. In New Zealand there's large companies that encourage excessive and pointless safety regulations, because they have the teams to work it and small businesses lack resources to fairly compete.

bananapub 2y ago

so incredibly exciting that it's US Federal government policy for cryptocurrencies to defraud normies and then cause a global financial crisis again. perhaps we'll learn a lesson about allowing sociopathic billionaires to exist in future.

1vuio0pswjnm7 2y ago

Thought experiment: If all bitcoin holders redeemed their bitcoin for US dollars, would this affect the "price" of bitcoin, i.e., the value of bitcoin in US dollars. If yes, how, i.e., up or down.

Volundr 2y ago
If all Bitcoin holders sold their Bitcoins, who is buying? You need to have a counterparty to the transaction. If everyone is liquidating an asset, it's price will be zero, as no one is buying.

davidmark014700 2y ago

In the vast digital expanse of the blockchain, where anonymity and decentralization reign supreme, crime can flourish in the shadows. When a group of sophisticated cybercriminals orchestrated one of the largest cryptocurrency heists in history—stealing 500,000 bitcoins from unsuspecting investors—it seemed like the funds were gone forever. However, the criminals hadn’t accounted for Galaxy Ethical Tech (GET), a cutting-edge cybersecurity firm dedicated to making blockchain technology safer for all. The scam was a masterclass in deception. Under the guise of a promising new decentralized finance (DeFi) project, the fraudsters lured investors with promises of high-yield staking rewards. Thousands of people poured their savings into what they believed was a revolutionary blockchain venture. However, in a single coordinated move, the perpetrators executed a “rug pull” – draining all the deposited funds and vanishing into the depths of the dark web.Authorities and independent investigators initially struggled to track the stolen bitcoins. The criminals had used tumbling services, privacy wallets, and AI-driven laundering techniques to obscure the transaction history. The blockchain, though transparent, was now a maze of dead ends. When law enforcement agencies hit a wall, they turned to Galaxy Ethical Tech, a cybersecurity powerhouse specializing in ethical AI, blockchain forensics, and quantum-resistant security solutions. Led by Dr. Elena Vasquez, a former cryptographic expert at MIT, GET had a reputation for solving the unsolvable.Upon taking the case, GET deployed its proprietary AI-powered blockchain analysis tool, NovaTrace. Unlike traditional tracking methods, NovaTrace used predictive analytics, machine learning, and behavioral forensics to follow digital footprints left behind by cybercriminals.The criminals had scattered the stolen bitcoins across thousands of wallets, splitting transactions into fragments so tiny they seemed insignificant. They leveraged Layer 2 solutions, privacy coins, and decentralized exchanges to mask their movements. However, NovaTrace didn’t just look at transaction IDs; it analyzed patterns, behaviors, and historical connections between wallet addresses.Within 72 hours, the AI had uncovered something crucial—several of the scammers had unknowingly reused addresses linked to previous fraudulent schemes. Even the most careful criminals had left digital fingerprints. Additionally, GET’s Quantum Ledger Recon (QLR), an advanced cryptographic tool, identified a vulnerability in a few of the laundering methods used. Some of the criminals had relied on outdated mixers that inadvertently leaked metadata. By cross-referencing this information with data from dark web marketplaces and blacklisted addresses, GET pinpointed the real-world identities of the masterminds.Armed with undeniable evidence, GET worked alongside Interpol, the FBI Cyber Division, and blockchain intelligence firms to orchestrate a global sting operation. Multiple arrests were made across three continents, and a significant portion of the stolen funds was frozen in digital escrow before they could be laundered further. Through a combination of legal actions, smart contract rollbacks, and cooperation with major exchanges, GET successfully recovered 92% of the stolen bitcoins—totaling approximately $30 billion at market value. The recovered funds were returned to victims, marking a historic win for blockchain justice.The case became a landmark example of how ethical technology could restore trust in decentralized finance. Galaxy Ethical Tech didn’t just recover stolen assets; they set a precedent for AI-driven fraud detection in Web3, proving that even in an era of anonymized transactions, justice could still prevail.As cybercriminals evolve, so does GET—pioneering a future where the blockchain remains a force for good, not greed. contact them via Email: galaxyethicaltech@mail.com Whatsapp: +15072712442

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