Trillions of Dollars!

January 5, 2023 10:55 AM

An investing rule of thumb like “if anyone pitching an investment ever uses the word ‘trillion,’ hang up” would probably serve most people reasonably well. Bloomberg's Matt Levine takes a close look at a wild scam. [ungated] [CW: crypto]
posted by chavenet (27 comments total)

Tired: footnotes
Wired: in-article links to footnotes.
Inspired: links from footnotes back to the original position in the article.
posted by Going To Maine at 11:03 AM on January 5, 2023 [15 favorites]

a unique blockchain technology that was on the verge of being sold for trillions of dollars to a group of reputable billionaire buyers

There are about 3300 billionaires who own about $11 trillion total, so that would have to be a group of more than 600 billionaires to buy something for multiple trillion dollars.
posted by straight at 11:08 AM on January 5, 2023 [5 favorites]

(or six 2021 Elon Musks or fifteen 2023 Elon Musks)
posted by straight at 11:14 AM on January 5, 2023 [11 favorites]

From the article: "This is so, so stupid. Nobody could have fallen for this, except that people allegedly did...."

It's fun to laugh at stupid people - and I agree, these appear to have been a particularly gullible bunch. Laughing at stupid people makes us feel smart, and laughing at stupid people who fell for a scam reassures us that, as smart people who wouldn't have fallen for that scam, we're safe from all scams. Aren't we?
posted by Mr.Know-it-some at 11:16 AM on January 5, 2023 [5 favorites]

My city threw millions of bucks at some crypto company that's obviously going out of business now. Money can buy a lot of things but it can't buy a less dumb ass.
posted by GoblinHoney at 11:35 AM on January 5, 2023 [6 favorites]

Laughing at stupid people makes us feel smart, and laughing at stupid people who fell for a scam reassures us that, as smart people who wouldn't have fallen for that scam, we're safe from all scams. Aren't we?

I... I don't like what you're implying, buddy. I have it on good authority that these beans are only referred to as "magic" because their superior stalk height and cloud-piercing capability were genetically engineered, and besides, cows are yesterday's tech anyway.
posted by Halloween Jack at 11:58 AM on January 5, 2023 [21 favorites]

It's fun to laugh at stupid people - and I agree, these appear to have been a particularly gullible bunch. Laughing at stupid people makes us feel smart, and laughing at stupid people who fell for a scam reassures us that, as smart people who wouldn't have fallen for that scam, we're safe from all scams. Aren't we?

Yes. Knock this false equivalence shit off.

At this point "crypto" is a synonym for "scam". If you get involved in crypto in any capacity you deserve what you get. This goes doubly so if you're vastly rich and can afford advisors to warn you about exactly things like this and you still get burned.
posted by star gentle uterus at 12:33 PM on January 5, 2023 [18 favorites]

It's fun to laugh at stupid people

increasingly I try to view the world as a single beehive.. and when some of my fellow bees are doing things that will ultimately damage the hive/population, I just find it concerning. I'm certainly not laughing at this point.
posted by elkevelvet at 12:55 PM on January 5, 2023 [12 favorites]

It's fun to laugh at stupid people - and I agree, these appear to have been a particularly gullible bunch. Laughing at stupid people makes us feel smart, and laughing at stupid people who fell for a scam reassures us that, as smart people who wouldn't have fallen for that scam, we're safe from all scams. Aren't we?

I don't think Levine is laughing at the victims here so much as highlighting how blatant and obvious these crypto scams have become, while drawing in an ever wider pool of marks. The whole system is built on a house of cards (tokens?) and there are likely many more big frauds still waiting to implode.
posted by sid at 12:58 PM on January 5, 2023 [7 favorites]

Davidson falsely stated, during a teleconference on March 6, 2021, that Billionaire 1 and Billionaire 2 were each under consideration as the potential CEO for the [sham] CoinDeal business enterprise. Billionaire 1 is the founder and executive chairman of a large online retailing company. Billionaire 2 is the CEO of an electric car company. During the same teleconference, Davidson falsely stated that CoinDeal had a market capitalization of $50 trillion.


To be fair, this sounds like the kind of thing that, uh, Billionaire 2 ("the CEO of an electric car company"), might be in on.
posted by The Bellman at 1:20 PM on January 5, 2023 [9 favorites]

The discussion further down in the article of the compliance officer dial that can be turned between Less Crime and More Crime was interesting.
posted by medusa at 1:44 PM on January 5, 2023 [4 favorites]

Yeah, the Ransomware Compliance Officer article was nuts (not least the implicit assumption that zero crime is unprofitable for legitimate banks)
posted by ivan ivanych samovar at 1:46 PM on January 5, 2023 [2 favorites]

CEO of an electric car company

They could've said "in the transportation sector." But they didn't.
posted by ZenMasterThis at 1:48 PM on January 5, 2023 [1 favorite]

I feel like Matt Levine is burying the lede here: ransomware is so big that they're effectively multinational corporate entities, and as such they've started feeling the pressures of a completely distinct market of mostly-black-hat actors who are somewhere between being investors and customers. You can scam private companies, and maybe some telcos, but now you're walking a very narrow tightrope: target something under the umbrella of federal law enforcement, and they'll get Interpol involved and bust down your door; go after the sick kids' hospital, the darkweb version of the Mos Eisley Cantina is gonna blacklist you and maybe shoot you for good measure.

It's only January 5th, but I think we may have already reached Peak Cyberpunk for the year.
posted by Mayor West at 2:18 PM on January 5, 2023 [12 favorites]

Yeah, the Ransomware Compliance Officer article was nuts (not least the implicit assumption that zero crime is unprofitable for legitimate banks)

I believe the point here is that the further you turn the dial towards zero crime, the harder it is. Like, going from 0.1 % crime to 0.01% crime might cost you more than your company will ever make, and zero is likely impossible. People don't like or trust when paypal asks for photo ID before recieving money. Imagine how much less eager the public would be if they requested fingerprints. Heck, I wasn't a huge fan of getting printed when I started my previous job, and that was a state institution.
posted by pwnguin at 2:24 PM on January 5, 2023 [1 favorite]

My favorite quote:
“ Like, you check your bank balance, and it says $11,250,000,000, and then you go to the Subaru dealership and pick out a nice Forester in the top trim package and the salesperson is like ‘that one is $36,495, let me tell you about our financing options’ and you are like ‘actually I have a voucher?’”

I’m still laughing.
posted by ZakDaddy at 2:59 PM on January 5, 2023 [9 favorites]

I recently subscribed to Money Stuff so that I could snuggle into the footnotes in the comfort of my email client. No need for web site workarounds!
posted by maudlin at 3:04 PM on January 5, 2023 [2 favorites]

> ZenMasterThis:"They could've said "in the transportation sector." But they didn't."

For privacy's sake, let's call him Elon M. No, that's too obvious. Let's say E. Musk.
posted by mhum at 3:46 PM on January 5, 2023 [3 favorites]

It's the golden age of fool's gold,
posted by dances_with_sneetches at 4:30 PM on January 5, 2023 [1 favorite]

increasingly I try to view the world as a single beehive.. and when some of my fellow bees are doing things that will ultimately damage the hive/population, I just find it concerning. I'm certainly not laughing at this point.

Laughter is complicated! Every healthy human beehive has a lot of it, but every healthy human bee has been drummed out of some beehive with laughter.

Just last night, I was laughing with my partner about how anxious she was that I wouldn't enjoy our day at Disneyland. We both know that her anxiety about such things is something I take seriously, and definitely did not make fun of at the time. But last night our power was out, there were high winds, and it was funny to think about how much we had to talk through this Disneyland trip.

Same goes here....it's got to hurt to be sucked in to a scam like this, and the justice system has to take it seriously. If we couldn't laugh at stuff like this, it would be impossible to process how sad it is.
posted by billjings at 4:52 PM on January 5, 2023 [3 favorites]

where is the cleansing fire
posted by lalochezia at 4:57 PM on January 5, 2023 [2 favorites]

For privacy's sake, let's call him Elon M. No, that's too obvious. Let's say E. Musk.

I prefer Eel On Musk.
posted by Greg_Ace at 7:48 PM on January 5, 2023 [1 favorite]

Laughing at stupid people makes us feel smart, and laughing at stupid people who fell for a scam reassures us that, as smart people who wouldn't have fallen for that scam, we're safe from all scams.

If only someone had warned them.
posted by AlSweigart at 8:46 PM on January 5, 2023 [2 favorites]

I found the scam within the scam to be really fascinating, and also had the same thought the author posits in his footnote:

"Do you think it is more likely that Knott (1) believed CoinDeal’s promises, thought she was giving her investors a great investing opportunity, but also scammed them a little, or (2) did not believe CoinDeal’s promises and was like “this seems like a scam I could work with”? Which one would be worse?"

I'm inclined to believe that somehow Linda Knott was in camp (1) because why wouldn't she just take the full amount of money she raised for her scam within a scam?
posted by nikoniko at 11:58 PM on January 5, 2023 [2 favorites]

She raised $749,000 and only skimmed $79,000, kinda weird.
posted by nikoniko at 12:00 AM on January 6, 2023 [2 favorites]

She probably heard somewhere that pigs get slaughtered.
posted by praemunire at 2:28 PM on January 6, 2023 [1 favorite]

That's fair, but her scam within a scam consisted of lowering the buy in price to the original scam from $500, to just $27. We're talking about sums (per individual) which probably won't put you on a hit list...
posted by nikoniko at 3:37 PM on January 6, 2023 [1 favorite]