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Recluse was kind enough to invite me back to The Farm Podcast to discuss the parapolitical dimension of FTX, over two whole episodes.

AI, Cults, and Techno-Feudal Dreams (Part 1)

The first part of our conversation focuses directly on Sam Bankman-Fried and the FTX fraud.

AI, Cults, and Techno-Feudal Dreams (Part 2)

The second part ventures farther afield, including discussing the bizarre connections between $Libra scammer Hayden Davis and Evril LeBaron, a possibly U.S. Intelligence-aligned Mormon fundamentalist extremist often known as “The Mormon Manson.” Much more to come here on that subject.

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I’ve crossed paths with Anthony Pompliano a few times in a few different ways. He invited me to a small dinner maybe seven or eight years ago, so I can assure you that his eyes are just as dead in person as they look on TV when he’s assuring you Bitcoin is about to rally. I also worked for a short while with his now-wife, who used to be a journalist but now runs a cringingly worshipful newsletter about entrepreneurship.

In short, these are people without real moral values, who probably don’t even realize that about themselves. So no surprise that Pompliano’s Bitcoin Treasury company ProCap included clauses that could unduly enrich Pompliano personally at the expense of investors.

While Unchained compared it to Elon Musk’s recent Tesla pay package, that’s not quite accurate. While Musk’s package has performance benchmarks, Pomp’s payouts have limited or no benchmarks.

For instance, in exchange merely for launching the DAT, Pomp’s firm got stock worth close to $100m, a major pre-dilution against the firm’s Bitcoin purchases. All told the potential upside for Pomp totals $400m - but according to Unchained, even if ProShares tanks 50%, Pomp gets $50 million.

And with Bitcoin tanked and the DAT trade crumbling, it seems likely that Pompliano has profited while his own investors suffer intense pain. That makes Pomp’s maneuver less like Musk’s, and much more like Chamath Palihapitiya’s disastrous 2020 SPAC deals, which left Chamath a billionaire and his investors broke.

A new study highlighted by Sheel Mohnot makes a remarkable but very compelling claim: that “as households’ perceived probability of attaining homeownership falls, they systematically shift their behavior: they consume more relative to their wealth, reduce work effort, and take on riskier investments … producing substantially greater wealth dispersion between those who retain hope of homeownership and those who give up.”

This is ‘intersectional’ analysis at its finest. Pursuing long-term objectives in an environment of basic trust produces better outcomes for individuals and society as a whole. But as goals fade into implausibility, and trust in traditional assets and rewards for work gets shaky, people are baited into both short-run consumption and high-risk games that are relatively harmful for them individually, and collectively toxic.

I would guess a similar analysis could be teased out of corollated late-stage-capitalism factors like declining real returns on investment, but the symbolic and emotional stakes of homeownership are harder to argue with.

Read at SSRN: “‘Giving Up’: The Impact of Decreasing Housing Affordability on Consumption, Work Effort, and Investment”

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The Cardano blockchain network experienced a malicious fork thanks to someone partly following AI-generated instructions to recreate a known exploit. This appears to have been a white-hat penetration test gone horrifically wrong: the AI purportedly gave the perpetrator bad instructions for “how to block all traffic in/out of my Linux server,” so what was meant to be a simulated attack became a real one. The chain split required a major community scramble to fix, and the token tanked 16% in already-brutal conditions.

The aftermath, however, has been far more interesting than the breakdown itself. While many blockchain hacks and compromises are greeted with sympathy by the broader community, Cardano’s apparent semi-downfall was celebrated far and wide, for one simple reason: everyone except for his bagholders utterly loathes Charles Hoskinson, Cardano’s creepy, self-important, delusional liar of a founder.

In fact, nearly a decade after the infamous “Metamask support” interaction, Hoskinson just two days ago penned another immortal bit of ego-tripping delusion that has instantly been adopted as mocking copy-pasta across Crypto Twitter.

“You do understand what I do for a living? I literally make decentralized central banks and rebuilt Wallstreet on a blockchain”

Which is simply a crazy thing to say when your project holds a whopping $200 million in assets.

Cardano community members have worked frantically to counter the narrative that this was a “hack” that resulted in a “chain halt,” which are genuinely incorrect characterizations. And Hoskinson said that the FBI had been notified - which in the case of some blockchain exploits is actually defensible!

But on both points, the Cardano community has gotten no sympathy. Nobody gives a flying fuck about their attempt to distinguish a chain fork from a halt. All that matters is that one of the most loathed non-criminals in crypto is eating shit. I’ll be sharing a big example here soon.

There’s also a lot of genuinely dunk-worthy confusion on the Cardano side, where many supporters seem to have at best a vague sense of what blockchains actually are. It turns out having a megalomaniac as a founder attracts people with limited literacy and critical thinking skills.

The lesson here is a perverse one: while crypto is “trustless” in the sense that anyone can access these chains, the character of your leadership team still matters immensely. Charles has treated people poorly for nearly a decade now, and both he and his investors are facing the consequences.

In one of the more surreal stories in recent memory, a Chinese national who posed as Philipino has been sentenced to life in prison for her human trafficking, part of her apparent role orchestrating a “pig butchering” scam center that enslaved roughly 800 people.

Alice Guo ran for and won the mayoralty of the small Philipino town of Bamban in 2022. But by 2024, a ‘scam center’ was discovered on land she formerly owned, and it was discovered that she was not in fact Philipino, but Chinese by birth. She subsequently went on the lam and was discovered hiding in Indonesia.

“Pig butchering” or romance scams have proliferated wildly over the last decade, enabled in large part by Tether, the offshore crypto shadow bank/”stablecoin.” (Notably, a pig butchering victim played a controversial, disruptive role in the prosecution of Tornado Cash developer Roman Storm.)

Sadly, Guo isn’t really “the” mayor of pig butchering, but likely one of dozens or even hundreds running similar slave camps across southeast Asia.

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Unchained reports that the most prominent investor in alternate blockchain network Berachain made what amounted to a fake investment, thanks to a refund clause. Brevan Howard “invested” $25 million through a group called Nova, but were guaranteed the right to a refund in a “side letter” leaked to Unchained.

If true, this would amount to substantive fraud. But it seems just as plausible that the contract has been misinterpreted, and that Bera’s hapless response has aggravated a non-event.

First, to take the story at face value: if not disclosed to other investors, the sweetheart refund deal is securities fraud, because it concealed that the “lead” investor didn’t actually have skin in the game. It may also have amounted to corruption of Brevan Howard from within: Unchained reports that Brevan Howard’s Kevin Hu, who led digital investments, had taken a personal stake in Berachain’s seed round, meaning he stood to personally benefit from the firm’s (deceptive) public stake.

All of this matches broader discourses and suspicions around Berachain within crypto circles. While we’ve all really been enjoying the parties, experts have almost uniformly disparaged the project as a “VC chain” motivated by insider self-dealing and pump-and-dump logic.

In response to these implications, pseudonymous Berachain founder Smokey issued a really unfortunate rebuttal. Front-loaded with claims that the story’s “framing is incomplete” and that the sources were “disgruntled ex-team members.” Smokey alludes to Brevan’s “complex commercial agreements,” and disparaging the author of the report.

In short, it sounds like the oily corporate evasiveness of someone who is 100% guilty.

But Here’s the Thing: The story might actually not be fair!

One lawyer, admittedly pro-Berachain but not employed by Berachain (and whose thread I have temporarily lost) explained that the refund clause would only be exerciseable if, more or less, the tokens were never actually issued. We’ll see how this plays out, but a clear explanation from Smokey, rather than defensiveness, would have saved everyone a lot of heartache.

If you need advice with comms problems like this, remember, I do take private clients.

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👁️ A Cardano Rots From the Head

Of Chain Splits and Reputation. Also Pompliano's Payday, Berachain's Back Door Deal, and More.