Citizens United and the FTX meltdown

The Keating Five were amateurs.

Cory Doctorow

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A vintage trustbuster cartoon depicting John D Rockefeller holding the Treasury building in the palm of his hand, peering at it through a watchmaker’s loupe. Rockefeller’s head has been replaced with Sam Bankman-Fried’s. His collar bears the Alameda Research wordmark. Image: Cointelegraph (modified) https://commons.wikimedia.org/wiki/File:Sam_Bankman-Fried.png CC BY 3.0 https://creativecommons.org/licenses/by/3.0/deed.en

The collapse of the FTX cryptocurrency exchange and its affiliated businesses has left a million creditors holding the bag for a chaotically managed, corrupt enterprise that created vast personal fortunes for the conspirators who ran it, even as it stole the life’s savings of retail investors who bought into its lies.

Could the unsuspecting public have been shielded from the FTX Ponzi scheme? Hindsight is 20/20, but there’s good reason to believe that FTX could have been brought down in a controlled glide, rather than a nose-first crash landing and ensuing fireball.

Earlier this year, the SEC sent a letter to FTX seeking answers about its business practices — a letter that sought to determine whether FTX was as scammy as it appeared. The SEC never got the answers it sought, thanks to the intervention of eight Members of Congress — the “Blockchain Eight,” four Dems and four Republicans — who wrote to Chairman Gary Gensler demanding that he back off:

https://emmer.house.gov/_cache/files/0/c/0c7fc863-7916-4b19-bc44-52bef772287e/9B0B9D1CA9B3C215DDC762DF5B0F6864.3.16.22.emmer.sec.letter.pdf

Five of Blockchain Eight received substantial cash contributions from FTX founder Sam Bankman-Fried (SBF) or his employees or affiliated businesses and PACs. Bankman-Fried is widely characterized as a Democratic super-donor, but his political spending is basically 50–50:

https://www.opensecrets.org/orgs/recipients?id=D000073694&cycle=2022

SBF held himself out as a philosopher king, a devotee to esoteric ethical precepts and a concerned billionaire who was committed to saving the world from ugly political currents; after the collapse, he confessed that this was all marketing nonsense (“this dumb game we woke westerners play”):

https://www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy

SBF and his co-conspirators gave money to politicians to further their own ends, not to save the world. They understood that if they gave money to politicians, that politicians would intercede to keep regulators from keeping them honest.

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