BANKMAN-FRAUD’S FTX BACKDOOR
For some years, ever since the phenomenon of the emergence of so-called "crypto-'currencies'" or "digital 'currencies'", I have been trying to warn about the dangers of the phenomenon. Others have raised their voices as well. Catherine Austin Fitts has been almost tireless in her efforts to awaken peoples to the real nature of these so-called "currencies", calling them "corporate coupons" (which means they're not currencies in any classical sense), and more generally trying to warn people about the dangers of cyber systems in general with her warning "no cyber system is secure."
My personal warnings have tended to be more obscure, but basically have been variations on her theme of the basic insecurity of cyber-systems. One of my pet peeves has been the argument that the blockchain technology - or more accurately, the blockchain technique - shares the same flaws of all such human claims: the impenetrable armor eventually meets a more potent projectile; the unhackable firewall or program eventually meets a program projectile that hacks it.
Recently, however, as if to underscore all these warnings, the FTX fraud scheme broke into the news, as the crypto-currency scheme of Sam Bankman-Fried, whom we refer to at this site by the apt nickname of Bankman-Fraud, was revealed to be nothing but a money laundering operation and form of electronic theft.
Gee, what a surprise...
But now there's yet another twist to the plot according to this article from the U.K.'s Daily Mail:
The article begins with a series of questions:
Where did this guy come from?
How did he become a multi-millionaire?
Was he a government asset?
Was he used by the elites to funnel money to fellow elites?
Was he used by the deep state to sabotage crypto currencies?
How much money did he ultimately funnel to Democrats and their causes?
The tentative answers thus far can be summarized as follows:
We don't really know.
It looks like graft, money laundering, and fraud were the principal methods.
It sure looks like he did.
Maybe so, to make room for the central bank version of the same thing.
A lot, but there were also Republican recipients of his fraudulent largesse, including Senator Mitch McConnell.
Now we're being told that a secret back door was also part of the operation:
A bombshell testimony has revealed that the co-founder of cryptocurrency exchange FTX was ordered by Sam Bankman-Fried to create a ‘secret’ backdoor to funnel money to Alameda Research.
Attorney for FTX Andrew Dietderich told the Delaware bankruptcy court on Wednesday that Gary Wang was told to create the secret line of credit of customer funds from FTX to the hedge fund.
Dietderich told the court that Wang ‘created this backdoor by inserting a single number into millions of lines of code for the exchange’ creating the line of credit, which ‘customers did not consent’ to.
The FTX attorney testified that the backdoor was a ‘secret way for Alameda to borrow from customers on the exchange without permission,’ Business Insider reported.
These revelations raise all sorts of questions, and sound the alarm, once again, about the dangers of any crypto- or digital-"currency", including a central bank digital currency: back doors can be placed into any computer program with administrative access, and I would aver that those willing to trust a central bank not to do so in an era when financial fraud has been at a premium are playing with fire. More to the point, how do we know that such back doors have not been placed into other crypto-"currencies" already? (PROMIS, anyone?) Answer: we really don't; what trust there is in cryptos has been built up largely and almost exclusively due to the claim that its blockchain technique is supposedly almost invulnerable to hacking. This in spite of stories of hacking to the contrary. See for example, the following:
And so on. With this sort of record, what is more amazing is how long it took for a Bankman-Fraud to come along and realize that the crypto-"currency" phenomenon was a perfect way to launder money.
Other questions swirl around the FTX scandal. Is there a connection to Communist China? Were any Chinese funds - Party or private - laundered through the FTX network to Democratic and Republican political candidates? What about the Delaware connection? Does that go any deeper?
While these questions continue to hover over the whole story, the backdoor is now a matter of record. I suspect, eventually, that the whole crypto-"currency" phenomenon will be revealed to have backdoors all over the place, that they are the rule, not the exception. Bankman-Fraud was merely the first one to reveal the inherent problem.
See you on the flip side...
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