Post by Molly White - Takahē

192d

New filings in the FTX case, made after executive Ryan Salame pleaded guilty and was sentenced to 7.5 years, raise the possibility that something weird happened with respect to promises about an investigation into his partner, Michelle Bond.

#CitationNeeded #crypto #cryptocurrency

The government then filed their full response, reiterating their earlier descriptions of conversations between the prosecution team and Salame’s then legal team, and also raising some procedural objections to the petition. This time they attached copies of contemporaneous notes that — assuming they are accurate summaries of the conversationsb — seem to support their assertions that they were extremely clear to Salame’s former attorneys that Salame’s plea would not impact the status of Bond’s investigation. However, other notes put some doubt in my mind as to whether Salame’s lawyers actually heard what they were saying, and whether those lawyers properly communicated this to him. One email chain shows his legal team expressing surprise this spring over ongoing investigations into Bond, as though they didn’t recall the earlier conversation.

Email from Salame’s lawyers to the Bond’s prosecution team in April:
Sheb,
Thank you for the introduction. We are surprised to hear from you given our course of dealing with the FTX prosecution team, which led us to believe that this matter was not going to be pursued.
Best regards, Gina

Portion of a reply by Salame’s lawyers to Bond’s prosecution team:
On another note, to answer the question posed in your earlier-in-time email, we have reviewed our notes, and they do not reflect the statement that you recounted to us on our prior call, nor do they reflect the statement that you made below about a disposition with Mr. Salame not resolving

And to be clear, these were not budget bin, amateur hour lawyers. At the time, he was being represented by two ex-DOJ lawyers working for the white-shoe law firm Mayer Brown: Jason Linder and Gina Parlovecchio.

It seems to me that there are three possibilities here:

Salame is falsely claiming that prosecutors improperly induced him to plead guilty, and that promises about Bond never happened
Salame’s former team of bigshot lawyers royally screwed up by leading Salame to believe that Bond’s investigation would be terminated if he pleaded guilty even though the government had expressly told them it would not
Some of the most powerful prosecutors in the country did, in fact, make these verbal promises to Salame, but simultaneously laid a paper trail reflecting the exact opposite, and are now lying about it under penalty of perjury
The prosecutors’ argument currently lies somewhere between options 1 and 2. They maintain that such a promise was never made, and argue that the petition should be denied outright, suggesting option 1. However, their inclusion of the emails from Parlovecchio, and their request that if Kaplan does hold a hearing, that he also examine Salame’s attorney–client communications, tips things into option 2 territory somewhat.

It’s not clear to me yet which of options 2 or 3 Salame is going to argue. Given the emails from Parlovecchio, it definitely seems like it might be appropriate to dig into those attorney—client communications to get the other side of

story, particularly from such qualified lawyers, but perhaps they’re playing 3D chess. Who really knows what’s happening, at this stage, but that email from his former lawyer definitely makes me more inclined to give him some benefit of the doubt.

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192d

Your Honor, the Wu-Tang Clan ain't nothing to fuck with

#CitationNeeded #crypto #cryptocurrency

A judge has granted a preliminary injunction ordering “Pharma Bro” Martin Shkreli to forfeit any digital copies he made of the Wu-Tang Clan’s one-of-a-kind Once Upon a Time in Shaolin.9 In 2018, Shkreli was forced to forfeit the album, along with other assets, to fulfill the forfeiture order resulting from his securities fraud conviction. The art collecting PleasrDAO later purchased it from the federal government at auction for $4.75 million. PleasrDAO sued Shkreli in June of this year, after they found him livestreaming the album on Twitter Spaces and promising to share copies.10 They’ve alleged that although the album was supposed to be one-of-a-kind, Shkreli made digital copies that he has since released, or plans to release, in contravention of the legal agreements attached to the album. This lawsuit is amusing to me when considered in the context of the claims we used to hear a lot out of the crypto world around how blockchains could solve problems around digital uniqueness. If only the Wu-Tang Clan had released it as an NFT... the case would still be right where it is now, in the courts. My favorite part of the lawsuit thus far is that PleasrDAO has now formally argued in front of the court that Shkreli disrespected the Wu-Tang Clan:

E. Shkreli Other Displays of Contempt for PleasrDAO, Wu-Tang, and The Judicial System

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192d

The Trump family’s latest crypto scheme, “World Liberty Financial”, has the makings of the biggest clusterfuck in Web3 is Going Just Great history.

#CitationNeeded #crypto #cryptocurrency

What better time to launch a transparently grifty “high-yield” cryptocurrency business than two months before your presidential election? Donald Trump, and especially his sons, have been teasing an upcoming cryptocurrency project that seems to be rapidly shapeshifting. First, they were all teasing something called “The DeFiant Ones” (a play on decentralized finance, or defi), with hashtags #BeDeFiant and tweets warning people to not “get left behind”. Then Eric Trump said something about the project involving “digital real estate”, though its unclear if he was speaking metaphorically or was actually referring to the metaverse “land” fad that more or less came and went. He did immediately follow up this statement by saying “It’s equitable. It’s collateral anyone can get access to and do so instantly,” leaving me to wonder if anyone in the Trump family has ever set foot near an average person trying to buy a house these days. Now the flim-flam family is all talking about “World Liberty Financial”, with a website promising access to “high-yield crypto investments”, a statement that should immediately set off alarm bells in anyone’s head.

The project hasn’t even launched yet, and it’s off to a bumpy start. First, Donald Trump Jr. had to issue a statement to try to stop people from buying up all the fake tokens purporting to be associated with their murky project [I64]. Then, Twitter accounts for Lara and Tiffany Trump were both compromised and used to send tweets announcing a supposed token launch. “This is a scam!!!” tweeted Eric, himself retweeting the tweet from his wife’s account containing the scam token address. Now, CoinDesk has gotten hold of a white paper for this supposed World Liberty Financial, which they note appears to be a clone of Dough Finance, a crypto lending platform that was hacked for around $2 million just a month and a half ago [W3IGG]. The hack was not a sophisticated one, and instead exploited sloppiness on behalf of the development team. The four people who built Dough are all listed as members of the World Liberty Financial team, as are Trump’s sons (including 18-year-old Barron, who they list as a “DeFi visionary”). Zachary Folkman, a Dough Finance creator who is now listed as the head of operations for World Liberty Finance, previously ran a pick-up artist advice platform called “Date Hotter Girls”.25 You should really just read the piece by CoinDesk, they did some great reporting here.

The project is making even the Trumpiest people in crypto nervous. Nic Carter, a crypto venture capitalist and outspoken Trump supporter, tweeted:

is there something that we, as crypto twitter, can collectively do to stop the launch of world liberty coin? i think it genuinely damages trump's electoral prospects, especially if it gets hacked (it'll be the juiciest DeFi target ever and it's forked from a protocol that itself was hacked). it's also an obvious target for the SEC. at best it's an unnecessary distraction, at worst it's a huge embarrassment and source of (additional) legal trouble. so are we signing a petition or what?

Commenting on the hack of the two Trump family Twitter accounts, he added: “can't secure twitter accounts but i'm sure they'll be able to protect an (already hacked) defi protocol from hacks”.26

All I can say is that if he launches this before the election and it gets hacked, it’s a strong contender for biggest clusterfuck in the history of Web3 is Going Just Great.

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