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Bank CEO: Retract your debanking piece? Me: No
- deleted 2y ago[deleted]
- martinky24 2y agoWhile verbose, I do enjoy Patrick's writing. I appreciate this (similarly verbose!) meta-post as well.
- casenmgreen 2y agoThe more he writes, the better. All of it is worth reading.
- earnesti 2y agoLOL no. it is super fluffy. Lots of good stuff in there, but just overly verbose.
- kristianp 2y agoI wish he would learn to make less digressions. I'm currently reading through "debanking and debunking" [1] and the whole part about Silvergate is interesting, but really long. It is relevant, but he goes into full detail about it. Other writers would put that into a separate article. I have limited time to read about these things, maybe 15 minutes max and his articles are often hour-long reads. [1] https://www.bitsaboutmoney.com/archive/debanking-and-debunking/ https://www.bitsaboutmoney.com/archive/debanking-and-debunki...
- casenmgreen 2y agoTolkien wrote of LoTR that he received endless mail from readers, and for every part of the story, to some it was especially wonderful, others especially poor.
- HeyLaughingBoy 2y agoThat's actually my only problem with Patrick's articles. I flag them for "read later" and then a month later I still haven't read them because I know how much time I need to set aside.
- cyanydeez 2y agoHe swerves in and out of liberal ideology saying "it could happen, but it's not currently; it could happen, but it's not some global conspiracy" He lost me in the digressions to the facts. I agree he presented facts but he really seems like he's trying to scratch the debanking itch while just saying it hasn't happened yet and if it does happen it's because you're electing liberals (again). I appreciate people who respond deeply to facts, but can find fault in the examples he finds to justify the paranoid he's apparently trying to quell.
- mixmastamyk 2y agoLordy... I followed a link from that to his vaccine website project. Whole morning, gone.
- bigstrat2003 2y agoI think verbosity has an unreasonable stigma attached to it. I think verbosity without any value is bad, but that's not what one gets with Patrick's blogs. He's verbose because he is trying to explain very complex situations to people who have no prior background in them, and that means it's going to get verbose. He couldn't really cut anything without hurting his readers' ability to understand the situations he writes about.
- gadders 2y agoFYI - The CEO of Anchorage Digital. We're not talking Jamie Dimon.
- geodel 2y agoAh, so no David vs Goliath here. Jamie might be busy with RTO mandate implementation nowadays.
- CaliforniaKarl 2y agoMaybe not, but Nathan McCauley (the CEO of Anchorage Digital) did appear in front of the US Senate Committee on Banking, Housing, and Urban Affairs, on the topic of "Investigating the Real Impacts of Debanking in America" https://www.banking.senate.gov/hearings/investigating-the-real-impacts-of-debanking-in-america https://www.banking.senate.gov/hearings/investigating-the-re... So, we may not be talking Jamie Dimon, but that does not mean this request for retraction should be ignored.
- gadders 2y agoTBH I'd ignore anything a bloke with that beard said to me, and I'd send them back to the nearest renaissance fair.
- rekabis 2y agoWow. Just… wow. While I cannot speak to anything that was written (I am far from being a crypto boi, all I see is snake oil and fraud tools), the epic disparity between the sloppy request and the meticulously eviscerating response is an absolute wonder to behold. The bank CEO brought a rubber knife to someone wielding a nuclear bazooka
- tadfisher 2y agoAt the end of the article, it's confirmed that Anchorage Labs/Anchorage Digital is not really a "bank" in the common meaning of the term: > The Bank shall limit its business to the operations of a trust company and activities related or incidental thereto. The Bank shall not engage in activities that would cause it to be a “bank” as defined in section 2(c) of the Bank Holding Company Act. Essentially Anchorage Digital is a rail for crypto to interact with the regulated financial industry, and their charter with the OCC limits them to only that form. So "bank CEO" is a misnomer; I would say "crypto CEO who managed to convince federal regulators to provide limited access to the banking system without allowing risky activities like lending or deposits".
- pjc50 2y agoHuh. UK doesn't allow you to register a company name containing "bank" unless you are in fact a bank.
- Y_Y 2y agoI'm sure there is a statement very similar to yours that is true, but as it is written it seems not to be so, since there are plenty of non-banks listed by Companies House here: https://find-and-update.company-information.service.gov.uk/search/companies?q=bank https://find-and-update.company-information.service.gov.uk/s...
- pjc50 2y agoThe list is at https://www.legislation.gov.uk/uksi/2014/3140/schedule/1/made https://www.legislation.gov.uk/uksi/2014/3140/schedule/1/mad... , linked from the rules at https://www.gov.uk/government/publications/incorporation-and-names/incorporation-and-names#sensitive https://www.gov.uk/government/publications/incorporation-and... Enforcement may vary.
- aidenn0 2y agoWhen a journalist asks you "Did you really mean that thing you just said?" you probably said the wrong thing.
- pavlov 2y agoBut in today’s media environment you just double down, pretend it’s exactly what you meant, and get outraged that the journalist must be a deep state agent for even daring to suggest otherwise.
- akimbostrawman 2y agoWhen a journalist disagrees with you, you are more often right than wrong.
- aidenn0 2y agoIf a journalist disagreed with me about something other than journalism, that might be true, especially if it's something in my field of expertise. But that's kind of how expertise works?
- rapjr9 2y agoThis article rambles endlessly and mentions crypto 145 times and appears to assume banks are not corrupt. So is illegitimate debanking an example of a real useful purpose for cryptocurrencies? I'm also thinking of the current Musk takeover of the Treasury payments system as perhaps leading to a useful purpose for cryptocurrency. For example, the regular payment of funds from a grant could be set up as an Ethereum smart contract. Or funds allocated by the US House could be a smart contract to prevent any other level of government from tampering with them. If you can't trust the banks or government then does cryptocurrency have some benefits? This was not seen as a Western problem because we had rule of law, but now, maybe it is. Decentralization and operating outside the control of a bank or government can be very useful features if the bank or government is corrupted. Like holding gold, except much easier to use because it is digital. Much easier to hide from a corrupt government also, maybe, though the government could know you had the funds depending on how the cryptocurrency works. In the old days people used to hide grain underneath their house to keep the government or armies from taking it, so they could survive the winter. Yes, criminals can hide and use cryptocurrencies also, but they always used money/fungible assets even before cryptocurrencies, to the tune of trillions of dollars. Seems like trying to control money has not worked very well in controlling criminals and instead root causes should be addressed.
- tadfisher 2y agoAt this point, I have to assume this take is intentional, with the goal of misleading everyone involved to view the crypto industry as a victim of evil bankers and their bought-and-paid-for regulators. 1. Define "illegitimate debanking". Debanking of whom? Crypto companies, end users, their surrogate banks and holding companies? You'll find the original article defines several forms of what crypto people mean when they say "debanking", and that the explicit goal of the term is to conflate all of them. Which is restated quite clearly in this "rambling", and as you seem to have missed the central thesis of this and the preceding article, I believe you are complicit. 2. If you believe the banking system and the government is corrupted, how does cryptocurrency solve the problem? Does it matter if the US debt is held in dollars or Dogecoin when the US defaults on the debt? Or, as I suspect, when you ask if it makes sense to use crypto in order to hide funds from the government, are you advocating that the act of government taking money through taxation (i.e. "funding the government") is the corruption you speak of? 3. Yes, criminals deal in all sorts of securities to launder money. Cryptocurrency is a wonderful way to facilitate this, as is art, cars, or anything else of value. Are you saying we should address the root cause of criminality, and ignore the tangible financial risk of supporting cryptocurrencies in the regulated financial industry?
- itsoktocry 2y ago>That piece is the definitive explanation of the issue. Is it common to say this about your own work?
- alwa 2y agoIt’s uncommon for it to be true—but patio does go on to supply third-party blurbs to support the idea, and as far as I understand his reputation, I believe his claim is probably accurate. In context it strikes me less as stroking his own ego and more as contextualizing the bank CEO’s claim.
- mplewis 2y agoWhen you’re Patrick McKenzie, it’s just the truth.
- itsoktocry 2y agopatio11 is decidedly anti-crypto from what I gather. Nothing wrong with that, but he's been calling for Tether to implode for, what, 5+ years? He's not omniscient about this stuff. https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
- ahnick 2y agoTether was very likely insolvent at one point in its life, but seems to have been able to fill the hole over time given they basically just print profits from the interest on its USD holdings.
- malthaus 2y agono, but like with paul graham's essays, people have an unhealthy obsession with both their writing (which is irrelevant outside of the ycombinator/sv bubble) to the point where it seems to signal to be part of an insider club more than provide actual value, which may lead to fuel one's ego a bit too much. turning this into another overly verbose blog post doesn't really help my thinking on the matter (which, to be fair, is even less relevant than his musings)
- skybrian 2y agoNit: published today and the URL contains 2025/02/10, but the article is dated tomorrow. Oops!
- kruuuder 2y agoAfaik, he lives in Japan, so that could be the correct date.
- Macha 2y agoNot any more, but who knows what's set to Tokyo timezones (or could be just pessimism about the finish date)
- patio11 2y agoAppreciate the note. The production configuration still thinks it is in Tokyo, and I did all my reviews on a laptop that knows it is in Chicago. Will fix.
- patio11 2y ago(Fixed.)
- pavel_lishin 2y ago> I recently received a request for retraction from a bank CEO. (Tweets sometimes become unavailable.) More than that, threads are no longer visible if you are not logged into Twitter.
- ajdude 2y agoI definitely appreciated the screenshots to each post in those parentheses. Clever way of doing it.
- torlok 2y agoI wish I could go back in time and stop being aware of who egg boy and Horowitz are.
- jszymborski 2y agoThis is a truly excellent level of snark: > If one’s bank does not employ an individual who understands the above paragraph to mean that Silvergate was solvent, Anthropic will sell you artificial cognition for $20 a month. Claude 3.5 Sonnet demonstrates sufficient reading comprehension to analyze complex technical documents to the standards of an early-career employee in financial services. We would recommend supervising Claude with management at least as competent as it.
- csours 2y ago> We would recommend supervising Claude with management at least as competent as it. insert reaction meme here The drive to fight can make people say some really dumb stuff sometimes (speaking about the banking CEO)
- andrewflnr 2y ago> We have no specific knowledge about Anchorage Digital’s relationship with its former bank or more than forty prospective banks, and will let the common factor in those discussions describe them. My god, nothing left but a smoking husk after that burn.
- NotYourLawyer 2y agoKinda makes me want to do a crip walk.
- andrewflnr 2y ago... TIL.
- patiofanmostly 2y agoI enjoy a lot of patio11's writing, but I find this article disappointing. The purpose of the article seems to be for patio11 to congratulate himself for being so clever and to mock this CEO for daring to question him. I don't feel like he actually addresses the CEO's criticism in good faith. To look at the very first point: >> Silvergate was trivially solvent based on their call reports. Anyone assessing their liquidity position saw this (we were doing so). Your implication that they were doomed due to BSA findings doesn’t comport with any regulatory practice—banks don’t get closed for this. > Had we stated or implied that Silvergate was insolvent, that would have been very improper. Insolvency of a financial institution is a serious charge. We assume McCauley believes we must have made it, because no bank CEO could possibly believe that solvency is the only obligation of a financial institution. We did not make this accusation. I'm admittedly not knowledgeable about banking regulation, but it seems like patio11 is willfully misinterpreting the CEO's criticism. The CEO's claim was that patio11's article implied that Silvergate was doomed due to BSA findings, not that patio11 accused Silvergate of being insolvent. I don't think the CEO did a great job either, as his criticism doesn't cite specifics in patio11's article, but patio11 is just further muddying the water by dunking on the CEO rather than considering whether he misrepresented anything in his piece. patio11 also inexplicably switches from "I" to "we" partway through the article for no apparent reason other than to sound more pretentious. There is the line "The following is in the voice of the company." but he continues to refer to himself as "I" after that announcement.
- lesuorac 2y agoPatio11 is just responding to any interpretation of the CEO's comments. If the CEO doesn't think Silvergate being solvent was relevant then why did he bring it up? You could assume incompetency on behalf of the CEO to bring up a non-sequitor but why bother assuming when you can just add words to address it. And right after the solvency discussion, patio11 goes on to list 5 banks in the last decade that were directly closed because of BSA issues.
- patiofanmostly 2y ago>If the CEO doesn't think Silvergate being solvent was relevant then why did he bring it up? You could assume incompetency on behalf of the CEO to bring up a non-sequitor but why bother assuming when you can just add words to address it. The CEO's assertion isn't a non-sequitur. It supports the claim he makes in the next sentence, which is the actual criticism of patio11's piece. Let's simplify the example: >>CEO: Arnold Schwarzenegger won Mr. Universe four times in the late 60s. Your implication that Schwarzenegger was physically unfit in the 1960s doesn't comport with any reasonable definition of physical fitness. >Critic: Had we stated or implied that Arnold Schwarzenegger did not win Mr. Universe, that would have been very improper. Is it obvious in that case that the critic is not addressing the CEO's actual point? You can imply that Arnold Schwarzenegger is physically unfit without specifically claiming that he never won Mr. Universe just like you can imply that Silvergate was doomed for shutdown by regulators without specifically saying that Silvergate was insolvent.
- 6LLvveMx2koXfwn 2y agoWhat was he saying about "buying ink by the barrel"?
- throwanem 2y agoHe quotes an old truism against unnecessarily picking fights with the media - in the saying's heyday, this being newspaper publishers, who notionally bought ink by the barrel (though more likely as a concentrate), and certainly could and did slant both editorial and opinion coverage in the organs they owned. The specifically quoted figure uses ink in the (specified) large volume of a barrel as metonymous of the volume of negative coverage, accurate or otherwise, anticipated to comprise the publisher's side of the fight.
- 6LLvveMx2koXfwn 2y agoOK thanks for answering in good faith - however I was alluding to his verbosity . . .
- throwanem 2y agoMore of any Bits about Money article isn't written down than is. In this case, much more.
- Terr_ 2y agoIt's referring to an idiom equivalent to: "Do not start a certain type of fight, when the other side fights that way routinely." In particular, a fight of written words when the opponent does so many written words that they purchase ink in bulk.
- lelandbatey 2y agoHey Patio11, totally off topic but I did want to say thank you for recommending "The Dragons Banker" in your October "Fiction and Finance"[1] post, it was a wonderful read in the under-served "person who is very good at their job does great work in wild circumstances" genre. Thank you for writing a relaxing and lighthearted recommendation post in your otherwise pretty serious newsletter, I hope it can remain an October tradition. [1] - https://www.bitsaboutmoney.com/archive/fiction-about-finance/ https://www.bitsaboutmoney.com/archive/fiction-about-finance...
- wonder_er 2y agoI always enjoy patio11's writing. I remember feeling what felt like barely constrained rage in his piece where he was proving provenance of a document or a prediction around how COVID could interact with the populations in Japan. 0, 1 The whole point of 0 ("dropping hashes") was to make sense of 1 0: https://www.kalzumeus.com/essays/dropping-hashes/ https://www.kalzumeus.com/essays/dropping-hashes/ 1: https://www.kalzumeus.com/2020/04/21/japan-coronavirus/ https://www.kalzumeus.com/2020/04/21/japan-coronavirus/ I believe i perceive a similar level of outrage and indignation over what feels like a serious mismanagement of real resources. Like... Blowing up banks hurts real people, represents real fraud, and after dealing with the people and groups he dealt with through the vaccinateCA effort, I think he is tying together basically a comprehensive legal defense that someone else could run while charging someone like this banker/pretend banker with fraud. even if there was jail time on the other side of it. Maybe it's also a little bit of a show of force, explaining what it might be like for a bank to go after an independent and resourced individual. I expect anyone else who might think of going after him, after encountering this piece, will be a bit less inclined to pursue bullying as a strategy.
- Animats 2y agoThis is a good read. Most of the first part recaps how banking compliance really works. That's worth reading, but mostly for education. Keep skimming until you get to the section about The Current Thing. Then read through to the end, where this finally gets to the point. The point being that what the crypto industry really, really wants is easy access to retail customers. They need more suckers to keep the Ponzi schemes going. Plus they want protection from regulators after they steal customer funds. For what? For stuff like this, which appeared on Reddit today. If you missed it, don't worry. There will be another one tomorrow. $XXXX AI: WEEX CEX IS NOW LIVE – HUGE MARKETING PUSH LATER TODAY! $XXXX AI: WEEX CEX IS NOW LIVE – HUGE MARKETING PUSH LATER TODAY! YOUR CHANCE FOR 10x RETURNS IS HERE – DON’T MISS OUT! Linktree: XXXX Contract Address: XXXX BREAKING NEWS – THE REVOLUTION STARTS NOW! XXXX CEX is officially LIVE, and we're ramping up with a massive marketing push later today! In LESS THAN 24 HOURS, $XXXX AI will be available for trading on WEEX, one of the TOP 20 CEXs, with over 5M+ USERS and explosive growth. This is YOUR chance to get in early before the price skyrockets. With an entry price of just $180K, this could be your opportunity to EASILY 10x your investment in UNDER A DAY. Don’t wait – the MASSIVE GAINS are just around the corner! $XXXX AI – THE FUTURE OF AI IS HERE! $XXXX AI is changing the game with the Shape-Shifting AI Agent – a real-time, self-evolving AI that adapts to any environment and solves any problem. This is next-level tech ready to revolutionize industries, and it's LIVE NOW! This isn’t just another AI project – it’s the future of AI, blockchain, and tech combined! The chart for XXXX (I'm not going to give the token symbol visibility on HN) shows it down 90% from peak and with a market cap of about US$180K and dropping. This stuff makes FBX look good. Crypto keeps developing lower and lower tiers of crappy investments. Current losses from crypto scams add up to about $76 billion. Don't expect much regulation in the US, with the CFTC shut down and TRUMP having his own memecoin. (It's down 80% from peak.) [1] https://www.web3isgoinggreat.com/ https://www.web3isgoinggreat.com/
- cyanydeez 2y agoI stopped at the current thing. I already know crypt past, crypto future and crypto now is a scam. Except, the facts are pretty myopically one sided. It takes a lot of effort to keep seeing principled republican ideas. Anyway, the world is often about which facts are curiously cataloged, cross references and regurgitated versus those thrown in the kitchen drawer.