Would You Rather Talk About Cawthorn's Sex Scandals Than About How He Swindled MAGAs In A Pump-And-Dump Crypto Scam?
Around 9 AM yesterday, bitcoin was trading at around $28K. In crypto-world $29K was supposed to be a big buy signal and it did go up... to $29,218.76 (down 3.92% for the day). You gotta feel badly for El Salvador, whose hipster president, Nayib Bukele, made bitcoin the national currency. AnalyticsInsight reported yesterday that "Being one of the first countries to adopt the top-most cryptocurrency, the Bitcoin paradise is focused on promoting the adoption of cryptocurrency in the city. The citizens are not so keen to adopt Bitcoin as a legal tender because they are used to the traditional financial system and not so keen on tech-savvy and internet-based transactions. Additionally, the US dollar is stable, unlike Bitcoin which can drop or hit its price at any point in time. The current price of Bitcoin is US$29,811.34 with a market cap of US$568.56 billion. El Salvador grabbed the opportunity of low price and purchased 500 BTC at an average price of US$30,744. But the real concern is if Bitcoin drops more and more, whether the first country to hold more than 2,300 BTC can stop the serious consequence in the nearby future. It needs to plan for more strategies to prevent any disaster from happening to the Bitcoin paradise."
Paris Marx, in a column for Jacobin, has a very different perspective laid right out in the title: Crypto’s Hype and Promises Were Based on Lies From the Very Beginning. And it isn't just bitcoin he's railing against. He wrote that "the values of major cryptocurrencies have been sliding for months, but the crash entered a new phase last week. TerraUSD (or UST) was the third largest stablecoin on the crypto market, while Luna was the fourth most valuable cryptocurrency by market valuation. But now both are virtually worthless-- and a lot of people have lost a lot of money. After a year of exuberance, the crypto winter is here, and it’s not clear there will ever be a spring. The promises that coin values would go 'to the moon' have given way to a rapid decline, while the slang term 'wagmi'-- 'we’re all going to make it'-- seems like a cruel joke. Enthusiasts used to chide critics by telling them to 'stay poor,' but now that’s the situation of many of the people who put their money into the digital assets based on the lies of those with much less to lose."
Crypto values started to rise at the end of 2020, kicking off a mutual reinforcing cycle that kept the line going up. Venture capitalists flooded money into the space, tech workers took jobs at crypto start-ups, and the media was happy to report on all the money changing hands. The headlines about the high returns that a select number of people were making and the conviction of many supporters that crypto could only appreciate convinced a lot of people to risk their money on highly volatile assets.
As usual with the tech industry, cryptocurrencies couldn’t just be sold as a risky investment; they had to be framed as a form of social good. Spike Lee starred in an ad promising crypto would empower marginalized groups, some internet advocacy organizations asserted it was the path to decentralization, and a whole range of groups deployed exploitative blockchain projects in the Global South claiming they would help locals. It wasn’t hard to see that there was nothing to these claims, but many people wanted to believe in the benevolent power of technology.
In November 2021, just weeks after Matt Damon appear in an ad [top of the page] enticing people to buy into crypto with the slogan “fortune favors the brave,” the values of cryptocurrencies and related products like NFTs started to tank. Bitcoin and Ethereum, the two largest cryptocurrencies, hit respective peaks of around $69,000 and $4,900 that month, but had lost half their value by January. Over that same period, average NFT prices fell by 48 percent, while trading volumes on OpenSea, the biggest NFT marketplace, plummeted by 80 percent. The collapse of UST and Luna, along with the Anchor lending protocol, will further shake people’s confidence in crypto assets.
...To put it in perspective, the total value of digital assets was estimated at $3.2 trillion in November 2021, but had fallen to $1.9 trillion by early May. In the past week, it dipped to $1.3 trillion. In the process, it wiped out the savings of a lot of people who bought into the hype.
For the past year and a half, it’s hardly been a secret that the crypto market was incredibly shady, if not a giant Ponzi scheme that relied on people buying in so those at the top could cash out with their money. Scammers made off with $14 billion in crypto last year alone, and as of May 9, 40 percent of Bitcoin holders were already estimated to have lost money on their holdings.
When you pair the crypto crash with rising inflation and higher interest rates, it’s likely more people will give up HODLing-- meaning “holding on for dear life”-- and cash out, continuing the crypto market’s slide and the pain for those who risked too much on crypto investments. The founders, the investors, and the whales-- those with large crypto holdings-- should shoulder the blame for the devastation being felt by all the people duped into their scams, and if regulators and authorities have any teeth they should be held to account.
But we also shouldn’t forget everyone else who helped them sell their lies: the organizations that took the industry’s money to reframe scams as empowerment; the workers who flooded into the digital Ponzi industry; the journalists who desperately wanted to believe the PR spin; and the celebrities who helped convince their fans to buy in. They should feel ashamed for contributing to the devastation we’re now seeing and convincing more people to enter the crypto market only to have their money stolen by the whales.
There’s a long history of people within the tech industry rebranding themselves as concerned advocates of change once they’ve made their money through exploitative practices they later claim to oppose, but that can’t be allowed to happen this time. All those who helped sell the crypto scam should all wear their participation as a badge of shame-- and they should hope and pray their actions have only cost livelihoods, not actual lives.
Are you old enough to remember Madison Cawthorn? It didn't become a campaign issue but the right-wing Washington Exminer reported that Cawthorn appears to have violated federal insider trading laws "as he hyped up an alleged pump-and-dump cryptocurrency scheme." He became involved with the scammy meme coin-- a Let's Go Brandon cryptocurrency. It's worthless now and, I'll admit that when I think of the kind of morons who would buy that... well, I hope they lost their homes and are trying to cope with new lives now. Cawthorn posted this on his popular instagram page: "LGB legends... Tomorrow we go to the moon!" The next day NASCAR driver Brandon Brown announced that the meme coin would be the primary sponsor of his 2022 season, causing LGBCoin's value to spike by 75%." Think Cawthorn, who owns LGBCoin, had advance warning that that was coming? The Department of Justice does-- and is investigating.
The sordid story gets worse. Immediately following Cawthorn's Instagram post and Brandon's announcement, the value of all LGBCoin in circulation eclipsed $570 million. By the end of January, the market cap of the meme coin dropped to zero. "Insiders"-- like Cawthorn?-- who owned an outsize share of LGBCoin dumped all their holdings at once, causing the coin's market value to evaporate. Tomorrow CPAC's annual conclave opens in Budapest. I don't know if Cawthorn will be there but at last year's CPAC he was hyping LGBCoin to the suckers. "I got Let's Go Brandon coin... It's working out well, very well."
The Washington Examiner story noted that "Lawmakers are required to disclose if they purchase over $1,000 worth of any cryptocurrencies, but Cawthorn has not filed any disclosures indicating he owns LGBCoin... Amid his public promotion of LGBCoin, Cawthorn used his authority as a lawmaker to introduce a resolution in the House in February that would 'deregulate cryptocurrencies and incentivize blockchain innovation.' While Cawthorn's proposed resolution lacked any specifics, [Public Citizen's Craig] Holman said Cawthorn could have run afoul of the STOCK Act if he introduced the measure for his own financial benefit."