Tim Miller sits down with Molly White to break down how Trump and his allies are cashing in on crypto while gutting the rules meant to protect the public. They dive into shady deals, regulatory rollbacks, and what it all means for your wallet, whether you hold crypto or not.
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But you know what i would probably be a multi-millionaire right now if it weren't for all the cumbersome regulation. To buy crypto you generally need to go to an exchange. That exchange has KYC policies which put banks and mortgage companies to shame.
First thing they want is my identity pegged down to the smallest detail. Then i have to provide documentation of all these details. I get quizzed on my financial and criminal history. I haven't a criminal history but by this point i'm certainly feeling more like i'm being booked into jail than trying to open an account. Assuming i successfully complete all the requirements, they'll get back to me. My understanding is they'll be running what's called an "adverse media screening" to search news articles, social media, and legal records to determine if i am a potential criminal risk. Then they'll tell me whether they deign to allow me to pay them for the privilege of paying them. If they say "no" they don't have to tell me why,
And of course if i buy a single fraction-of-a-penny Dogecoin, it is mandatory to report to the IRS.
This is anything but "minimal" regulation. These policies are practically dictated to private exchanges by govt regulators, most notably the SEC but also FinCEN and CFTC and the rest of the global financial police. It's ridiculous because crypto is anything but a "security" and it's arguable if it's even a commodity.
I don't object to regulation. But when it comes to crypto it seems like nobody really knows how to treat it or which regulatory framework applies, so they make it up on the fly and *everything* applies. That's as messed up as the organized crime they use as pretext.
It was all so intrusive and byzantine that as it progressed didn't want to do it, and eventually i gave up. Only i couldn't help myself checking "what might've been" and i can state authoritatively, given the investment i was contemplating, me and my family would be really comfortable right now. Forgive me if i feel a bit of reflexive bitterness to hear someone dismiss this as "minimal".
Is anyone paying attention? This is unfathomable. Truly!! What can a person do? Besides watch our country burn down.
Another grift that should be headline news. Thank you for informing us.
Meh.
Tim posed a good question about Gensler and Ms White gave a very misleading answer. The problem with Gensler, et al, wasn't just that they were over-zealous, it's that they were capricious. The crypto industry has been begging the US gov't for clear, clean guidance and a rational regulatory framework. Gensler just sat around inventing random enforcement actions out of thin air.
If you're now complaining about Trump's tariff clusterfork, you should be equally incensed about Gensler.
There's also the conflating of crypto with grifting. While it's true that (unregulated) crypto provides a great vehicle for graft, it's not like it's necessary for Trump. Good grief, the guy hawks Teslas on the WH front lawn!
To be sure, the crypto industry absolutely needs clear and rational guidelines and regulations. We didn't get it with Biden. So far, we're getting a knee-jerk opposing reaction from the Trump admin, which will just make things worse.
Trump never met a conflict of interest he didn't exploit. This sounds like the mother and father of all of them.
Wow what a bright well spoken young woman. Very enlightening. Hope you have her back.
"Im shocked that there is gambling go on in this establishment"! (now substitute Trump grifting and Crypto)
Great information Tim! Thank you. Appreciate knowing about Molly and her newsletter. She will have a new subscriber in me.
Tim, please we need an update to Why We Did It. It’s easy to understand the careerists, sycophants, cowards, and the greedy - your book masterfully categorized and explained them. But now that the attack on democracy is underway, we need to understand the sincere, hence especially dangerous, ideologues. S. Miller, Bannon, Thiel, Navarro, perhaps Patel, many others. These people appear to believe democracy has run its course and they now have power. Those hanging around the capo for personal gain are reprehensible but transparent. The true believers are more dangerous. We need to understand them. Can you help?
Molly was great! I'd love to see repeat coverage of this topic from her on the pod.
Did I miss this part of your discussion? Crypto is a catastrophic development not only for the climate but for the cost of energy we need for daily life. And it will only get worse. As more and more transactions occur and depending on the validation system(s), basically we can expect the transaction processing cost to scale at least linearly. And blockchains never never never stop growing.
The current (ha ha pun) best estimates available (source: US Energy Information Agency) are that cryptocurrency consumes between 0.6% and 2.6% of total US electrical production. (The details of this accounting are complex and fascinating and it would take several Bulwark podcasts to begin to cover them... I'm using EIA numbers.)
Still using EIA numbers. Compare this to domestic air conditioning in US homes at about 19.2% of US electrical consumption. In other words: right now, in the middle of the EIA range, crypto processing in the US already consumes 5.2% as much energy as we use to cool our homes.
The infrastructure to produce and distribute this to crypto fraudsters and gangsters is of course paid for by all users of electricity. Hoq lucky for them!
More fun with easy numbers. Bitcoin transactions, for instance. This one is really cool. (See https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/). -- This compares 100,000 traditional VISA transactions (done the old fashioned way -- banking!) to one bitcoin transaction: 148 kWh for 10^5 VISA, 1,214 kWh for 10^0 bitcoin.
Since this is America, the economy with the highest ratio of innumerate ignoramuses to population in the world, we need to ditch exponents... so the energy cost ratio of a single bitcoin transaction to a single VISA transaction is (148/100,000) kWh divided by 1,214 kWh.
In other words: a bitcoin transaction costs more than 12,000 times as much energy as a transaction by credit card.
Thank heaven that (for now at least) almost all the crypto activity is for criminal purposes. If we actually get to the nightmare world where we're using lots of blockchain type "money" in daily life, we'll all be bankrupt in the dark. (Come to think of it, though, the way everything else is going, this is probably where we'll find ourselves in any case.)
Unless we can find cheaper ways to process all these transactions, the blockchains will only get more and more energy intensive. The point of blockchain is of course that all transactions are transparent, so all though there are some workarounds like Etherium that reduce the processing overhead, they do so by inserting validators into the process... which hides the chain. In other words -- all the disadvantages of crypto combined with the disadvantages of needing to trust intermediaries whose pecuniary interests are at best orthagonal and at worst diametrically opposed to our own.
Or, as has been noted, it all boils down to this: the thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun. Is there any thing whereof it may be said, See, this is new? it hath been already of old time, which was before us.
I've never understood reason for crypto, other than to facilitate criminal activity and launder money. Nothing I'm learning has changed that.
You have nailed two of the three. The one you missed is the one about separating fools from their money.
Although perhaps that counts as "criminal activity"... morally, but not legally.
This is why the super-rich have moved to get a stranglehold on media companies. To bullhorn 24/7 that regulation and oversite is bad, why we should all be against it, while the poor stupid schmuck hears on these "friendly" media outlets run by these assholes non-stop lies about how they're looking out for them...and the evil left is trying to force government down their throats, blah, blah, blah...
Meanwhile, long story short, theft is legal, and the rich get richer. And the clueless support it.
This crypto grift lines up with the yarvinite crowd. You should be convinced by now that DT does not plan on leaving office voluntarily. He will never give up power. Why would he? He is the proverbial pig in shit. He actually is billionaire now from all of the revenue streams flowing into his pocket from all points on the compass. The regime itself is a grift.
The fact that this can't even break the news cycle shows you how fucked we are.
This is nasty corruption. Trump will get away with it.
Props to Tim for staying on the crypto angle. There are a million daily outrages and crypto doesn't move the needle for a lot of people, but it's really important. Crypto is the Rosetta Stone that ties together various worlds of crime globally and it's basically invisible.
Good pod! I am slightly less ignorant about crypto now!
Where is the link to Molly White’s article? Thanks
I found it: https://www.citationneeded.news
Trump is engaged in a huge crypto scam. Who ever would have guessed? The good news- while he is sending 300+ million Americans to the poor house, we can at leat celebrate Trumps good fortune. Swell.
Awesome, love Molly!
Molly is top notch! Good pickup, @timodc.
Molly is fantastic—surely the best and most thorough reporter on the crypto beat. So great to see her on the Bulwark. I hope she becomes a regular guest. (Everyone should sign up for her newsletter.)
Jimmy Carter sold his damned peanut farm. This is wild.
Still has the feel of mob money to me.
Remember how the Republicans spent 4 full years talking about the "Biden Crime Family" because Hunter and Biden's brother had some Chinese business deals? What's happening now? Trump took a $75 million bribe from a Chinese business man to get an SEC investigation quashed. Trump is violating both the domestic Emolument Clause and the foreign Emolument Clause with the tens or hundreds of millions of dollars he's laundering through his meme coin. The Republican hypocrisy is monstrous.
Another piece of evidence that every Republican attack is a confession.
Not hypocrisy. Envy and admiration. And hope that they will be invited to partake of the scraps snd leftovers.
All that bleating about the Biden crime family was only because Republicans were jealous. What they wanted was a real crime family, one of their very own that they could be proud of. So they went out and got one.
You might not remember that the too-clever-by-half argument in 2016, that the emoluments clause doesn't apply to the President (of all people).
Deregulating and suppressing regulatory authority is going to benefit Trump. It’s going to benefit a few players.
Ultimately others will jump on the ship, knowing they can do anything.
And then it will be 2008 all over again, when they will all fall down, because they are fraudulent to begin with.
Which all means that those companies and holders who are legitimate will be screwed, royally.