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Hello and welcome to your weekly Dark Markets fraud-news roundup. I’m David Z. Morris, a veteran journalist, investigator, and PhD historian of technology.
We are just over one month out from the release of my book, Stealing the Future: Sam Bankman-Fried, Elite Fraud, and the Cult of Techno-Utopia. Please consider pre-ordering, and if you’re in New York City, come out for our release event on November 11 at Powerhouse Arena.
In this week’s edition: A massive pile of Ziz, LLMs lose their rizz, Mary Kay gets even shadier, SWIFT puts XRP in the friendzone, Catholics want to censor Bitcoin, and Jump Crypto is back on their bullshit.

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I’ve just been hipped to zizians.co, a website hosting a *45 part* recounting of the “Zizian” Rationalist splinter group alleged to have killed four people earlier this year. I make no endorsement, as I’ve seen some allegations that this site and its admins invented the term “Zizian” to unfairly “cult-jacket” the group. At the very least, its the idiosyncratic and definitely non-objective take of people who seems very close to the topic. But it looks incredibly in-depth, so possibly useful as I revisit/follow that story.

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Jan 28
Richard Sutton’s 2019 paper “The Bitter Lesson” argued that building rules and knowledge-based AI systems had proven far less effective than “methods that leverage computing.” That focus on compute, alongside the refinement of the transformer/LLM model for machine learning, are effectively the basis for everything OpenAI has ever done.
But now Sutton, this year’s Turing Award winner, has (arguably) changed his mind, declaring that scaling-based LLMs are a dead end for artifical intelligence development. More specifically, he discusses learning as a product of experience, which pretty well annihilates the entire premise of OpenAI’s development approach.
“Reinforcement learning is about understanding your world, whereas large language models are about mimicking people, doing what people say you should do. They’re not about figuring out what to do,” Sutton says.
“To be a prior for something, there has to be a real thing,” Sutton continues. “A prior bit of knowledge should be the basis for actual knowledge. What is actual knowledge? There’s no definition of actual knowledge in that large-language framework.”
In other words, LLMs aren’t even a *little bit* intelligent. More important than that rather nebulous labelling, as long as a model is “doing what people say you should do,” they will never solve a problem human’s haven’t already solved.
Gary Marcus does a deserved victory lap, running down all the figures who have now followed him to the understanding that LLMs will never actually become intelligent.

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March 21, 2023
I’ve been lurking in the subreddit r/antimlm, a community for exposing businesses resembling pyramid schemes. That’s how I learned that venerable makeup MLM Mary Kay has announced that it will be fulfilling all orders placed via its website directly at the corporate level, rather than letting their “independent contractor” sales force send inventory directly.
That matters a lot because, of course, the unfortunate souls that make up the Mary Kay sales force have often been cajoled or persuaded into buying huge amounts of Mary Kay inventory to keep on hand - and they will now move significantly less of that existing inventory. Mary Kay isn’t just stealing its sales force’s contacts, but making already-sold inventory worthless - in some cases, tens of thousands of dollars’ worth.
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One of the most subtle and long-running shell games in crypto is Ripple/XRP, a private token whose corporate controllers have spent close to a decade promising that it will become some sort of new banking transfer medium. Specifically, people like Brad Garlinghouse have spent years vaguely suggesting that someday SWIFT, the international banking transfer system, would adopt the token for interbank transfers.
Well, it sucks to suck, because SWIFT has now launched a blockchain project … and it’s not going to use XRP, but instead deploying on the Ethereum-adjecent Linea blockchain. This was pretty predictable years ago because Ripple’s promises never actually made logical sense - XRP is a floating token, so it would be absurd to use it to transfer dollars - as Ripple co-founder David Schwartz helpfully explains here.
There’s no denying this is a blow, and XRP has significantly underperformed the market over the past week. You can smell the flopsweat: Compare Garlinghouse in June claiming XRP could “capture 14% of SWIFT volume,” then last week dismissing the Linea deal as a “prototype” and publicity stunt that doesn’t matter because Ripple has out-innovated SWIFT.
Pivoting that fast, I’m not sure how Garlinghouse keeps his head from coming off.
A powerful quote from actress and filmmaker Justine Bateman, given to The Guardian, has been making the rounds:
“They’re trying to convince people they can’t do the things they’ve been doing easily for years – to write emails, to write a presentation … You will essentially become just a skin bag of organs and bones, nothing else. You won’t know anything and you will be told repeatedly that you can’t do it, which is the opposite of what life has to offer. Capitulating all kinds of decisions like where to go on vacation, what to wear today, who to date, what to eat …
“You won’t have to process grief, because you’ll have uploaded photos and voice messages from your mother who just died, and then she can talk to you via AI video call every day. One of the ways it’s going to destroy humans, long before there’s a nuclear disaster, is going to be the emotional hollowing-out of people.”
While I think the idea that a machine can become intelligent is a huge delusional threat to human thriving, machine learning and LLMs can obviously do a lot of things that don’t require real decision-making, like generating images and video from prompts. And those are even bigger threats than the mythology Sam Altman is using to pump his stock.
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In an episode that reads like a lower-budget, far stupider version of The Blocksize War, a longtime Bitcoin developer known by LukeDashJr is trying to get miners to censor non-monetary information on the network using his own client, called Knots. This has become a huge dust-up, which in itself doesn’t speak well of the Bitcoin community in 2025, because it’s an incredibly stupid fucking idea in its own right.
It becomes even more mystifying that anyone is taking Luke seriously when you learn, in an excellent rundown by actual cypherpunk Jameson Lopp, that LukeDashJr is a micro-sectarian fundamentalist Catholic who believes that breaking any law - even Jim Crow laws in the 1950s - is a “sin.” He also seems to have no idea how to secure a computer, which is a bit of an additional problem.
Jump Crypto, the cryptocurrency arm of established hedge fund Jump Trading, has over time proven itself to be one of the worst actors in crypto. I was one of the first to publicly flag, in my Crypto Crooks series, that they were likely in a corrupt agreement with Do Kwon for “market making” (read: fraudulently manipulating) the price of his Terra/Luna tokens. That was seemingly confirmed by a whistleblower in April of 2024, and then-head Kanav Karya was shitcanned a few months later.
But it’s increasingly clear that Kanav Kariya was more a fall guy than an animating force of grift at Jump Crypto. Not only do we have that whistleblower placing “secretive” Jump Trading cofounder Bill DiSomma at the center of the Luna fraud, but Jump are now back in the shitcoin pump-and-dump game without Kariya. This time Jump’s vehicle is allegedly a token called Double Zero.
I don’t know what it is, it doesn’t really matter, what really matters is Jump got a huge token allotment with no f*$%(@g lockup. As analyst 0xSisyphus put it on October 2, “It took Double Zero nine months to go from an idea to a token with some of the worst tokenomics we have seen since the FTX era. A crime throwback … Jump has 30% of the total supply and has around $400 million of value of tokens to sell on launch day.”
October 2 was in fact the token’s launch day. And indeed, the Double Zero chart since then is perhaps literally evidence of a crime.

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