Bitcoin maximalists confirmed

Long before Bitcoin (BTC), Bernie Madoff presided over the longest running, biggest fraud in history. The rise and fall of Sam “SBF” Bankman-Fried, the former CEO of cryptocurrency exchange FTX, has been accelerated in comparison. While the similarities are deep, the storyline is not: Create organizations under false pretenses, develop relationships with people in positions of authority, deceive customers, survive as long as possible and try not to get caught.

Madoff’s advisers experienced a “liquidity” problem in 2008, from about late November to early December, where the fund was unable to meet client repayment requests. On the surface, the timing of Madoff’s Q4 collapse more than a decade ago is similar to FTX’s 2022 implosion. Bitcoin holders who hold their keys will never experience a “liquidity problem” because their Bitcoins are not being used to leverage anything else. As long as it remains in the control of the rightful owner, it is the hardest money.

Even near collapse, Madoff planned to pay $173 million in early bonuses to family and friends. On December 9, 2008, when questioned by his sons, Madoff admitted to the massive fraud. The numbers are, in many cases, fractions of fraudsters accused in the FTX. Bitcoin maximalists continue to remind their community that revenue, third-party custodians, and humans cannot be trusted. Satoshi Nakamoto’s white paper stands.

Madoff’s sons contacted an attorney almost immediately and were advised to contact federal authorities. Madoff was arrested on December 11, a day after federal agencies became aware of the fraud.

Related: The outcome of your SBF prosecution may determine how the IRS treats your FTX losses

On November 8th, Binance CEO Changpeng Zhao announced on Twitter that he initially intended to buy FTX, but he quickly reversed his decision and FTX had a “liquidity” problem. Bitcoin maximalists either stared blankly, shook their heads in disbelief — knowing it was only a matter of time — or simply moved on with their lives. Many maximalists believe that Mt., which held about 80% of all BTC in circulation at the time of its breach. Gox could be part of it. The “wake-up call” is a ritual of inauspicious initiation for some bitcoiners. FTX will spawn many new Bitcoin maximalists.

In December, SBF was arrested in the Bahamas. As authors and researchers, we are confident that the connection to the timing of Madoff’s arrest on December 11, 2008 will be immediately identified and investigated.

Because SBF faces extradition to the United States based on the “Treaty between the United States and the Bahamas,” it faces sentencing terms that could mirror those of Madoff, who faced 150 years in prison for his arsenal of convictions. Those convicts include:

  • 40 years twice for international money laundering
  • 20 years for one count of securities fraud
  • 20 years for one count of mail fraud
  • 20 years for one count of wire fraud
  • 20 years on one count of falsifying documents to the Securities and Exchange Commission
  • 10 years for one count of money laundering
  • Five years for one count of investment adviser fraud
  • Five years for one count of perjury
  • Five years for one perjury
  • Five years for one count of theft from an employee benefit plan

To provide some perspective, the longest sentences for recent financial scams include:

  • Shalom Weiss (845 years)
  • Norman Schmidt (330 years)
  • Bernie Madoff (150 years)
  • Frederick Brandau (age 55)
  • A tie for fifth place between Charles Lewis, Eduardo Masferrer, Chalana McFarland and Lance Poulsen, who received 30 years in prison.

Based on the limited edition documents at the time of publication, SBF could place its name in the top five listed above – potentially even above or close to it. Given that, among other allegations, his political donations influenced or may have influenced political elections in the United States.

Related: It’s time for cryptocurrency enthusiasts to stop supporting identity fans

Madoff’s inmate number was 61727-054. Note that these oddly hyphenated eight digits did not represent an account number, SEC filings, or some secret financial code; Those numbers were Madoff’s former inmate numbers at the Butner Federal Correctional Complex.

If and/or when the time comes, SBF may be remembered with a similar numerical value instead of a cheeky three-letter nickname (“SBF”). Time will tell. Remember, Madoff pleaded guilty and still got 150 years in prison, eventually dying in prison.

Bitcoin > bribery

Let’s be clear: not your keys, not your coins.

Stop giving your hard earned money and Bitcoin to “trusted” third parties. Whether SBF spends a day in jail or several lifetimes, the future of SBF means nothing to Bitcoin maximalists. In truth, if SBF is free to roam, the event will confirm the larger Ponzi scheme that Bitcoiners are well aware of.

Bitcoin continues to promote maximalists, and events such as the collapse of FTX (among many other exchanges) remind us of Nakamoto’s words at the beginning of the presentation of Bitcoin’s white paper: “Trade on the Internet has come to rely almost exclusively on financial institutions. serves as a trusted third party. […] While the system works well enough for most transactions, it still suffers from the inherent weaknesses of a trust-based model.

There have been and will be many lessons to be learned when examining the greed, lack of empathy and overall corruption that people have witnessed throughout history; and as events of this magnitude unfold, trust, or the lack of it, is at the root of every failure.

Bitcoin market capitalization from 2013 to 2023. Source: CoinMarketCap

Bitcoin’s proof-of-work model – including but not limited to how transactions happen, timestamps are recorded, hash rates are regulated, network nodes broadcast, incentives are awarded, validation occurs, and privacy is encoded – is the solution many bitcoiners have adopted. convenience. Trust is based on protocol, not individuals. Time and time again, a broken world and unscrupulous actors make the case for an unreliable system.

Related: From the NY Times to the WaPo, the media hates Bankman-Fried

No matter how well-regulated, designed, or engineered future financial systems, exchanges, or “cryptocurrencies” are, they all have the same failing point: human nature and greed.

Bitcoiners realize this and many are aware of financial fraud – whether directly or indirectly affected – Bitcoin continues to appear as the most obvious solution. SBF can teach a new generation of “investors” the same hard lesson their parents learned: When something is too good to be true, it often is.

The failure of the FTX is not a surprise, nor are the potential connections between the SBF and high-ranking officials. It should also come as no surprise that the punishments do not fit the crime(s). In fact, maximalists understand that Bitcoin will exist long after the SBF dust settles. Bring on the next Ponzi scheme – Bitcoin maximalists are immune.

Kenneth Minesinger He is a professor of law at California Baptist University. He received his JD from Western State University College of Law after completing his undergraduate career at California State University, San Bernardino.

Dr. Riste Simnjanovski He is a professor of public administration at California Baptist University. He received his doctorate from the University of La Verne.

This article is for general information purposes and should not and should not be construed as legal or investment advice. The views, opinions and opinions expressed herein are solely those of the author and do not reflect or represent the views and opinions of Cointelegraph.

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