Welcome to The Node. This is Daniel Kuhn and Prachi Vashisht, here to take you through the latest in crypto news and why it matters. In today’s newsletter:
Addresses tied to the $200 million Euler Finance exploit have sent 100 ether ($170,515) to wallets associated with Lazarus Group, the North Korean-affiliated hacking group, according to data from the on-chain analysis tool Look on Chain. However, it is unclear if Lazarus, the group thought to be behind the $625 million Ronin hack last year, has any affiliation with Euler’s exploit.
Closing Time
Popular NFT project Doodles doesn’t want to be called an NFT project anymore. Doodles founder Jordan Castro, aka Poopie, explained in a tweet the brand is “growing into a company with the goal of becoming a leading media franchise” adding later he wanted the project to “go beyond” the “vicious speculative cycles” of crypto. Doodles is not the only crypto project to distance itself from the industry, Reddit, for instance, chose to call its user rewards system “digital collectibles” rather than non-fungible tokens. Meanwhile, Playboy’s parent company, PLBY Group, recorded an impairment loss of $4.9 million on the ETH it accepted as payment for its “Rabbitars” NFT series. The company holds $327,000 worth of digital assets as of December.
Trademark Dispute
Lightning Labs, the company behind the eponymous Bitcoin scaling system, is being forced to stop development on its latest tool Taro until it is rebranded, following a court injunction in a trademark case filed by Tari Labs. Tari Labs, a Bitcoin software company, sued Lightning Labs in December for trademark infringement.
Sound Bites
“I don’t believe that the decision to shut down Signature Bank was because it banked crypto clients … the decision was based upon whatever the data was with respect to the withdrawals by customers.”
– Former NYDFS superintendent Maria Vullo, on CoinDesk TV’s “First Mover”
Of the other participants that were actively involved in the conference, no other made an impact quiet like Near Protocol. Until recently, Near was a super-charged, proof-of-stake platform designed for speed, security, and scalability. Building on such a strong platform, people too often view Near as a competitor to Ethereum. However, Near’s presence at ETHDenver showed that the blockchain is not out to compete against Ethereum, but instead compliment the blockchain and support Ethereum for its shortfalls. Continue reading.
*This is sponsored content from Near Protocol.
The Takeaway: Moral Cover
The leading so-called philosophers of the Effective Altruism movement were warned as early as 2018 that Sam Bankman-Fried was a liar who slept with multiple subordinates, according to new reporting from Time. They reportedly responded in part by threatening those warning the golden boy wasn’t all he seemed.
Despite formal attempts by Alameda Research staff to push Bankman-Fried out at the time, figures including Oxford professor William McCaskill continued publicly burnishing the FTX founder’s image as he built one of the largest financial frauds of all time. McCaskill and others were ultimately rewarded for their defense of Bankman-Fried’s behavior in the form of funding and prestige as FTX appeared to succeed in later years.
This was not a matter of dismissed rumors and personal grudges, but of well-documented corporate processes detailed in part by people whose entire careers are premised on cultivating moral action. In April 2018, four top Alameda managers called a meeting to offer Bankman-Fried a buyout to leave the hedge fund, based on already-extensive concerns about his disdain for basic corporate processes and accounting.
Documents for the meeting described Bankman-Fried as indulging in “gross negligence,” being “unethical” and “misreporting numbers.” Among other actions leading to the intervention, Time reports Bankman-Fried reneged on a deal to share ownership of Alameda, and illicitly registered himself as the sole owner.
According to Time, McCaskill was warned about Bankman-Fried’s behavior and the plan to oust him. So were Nick Beckstead, an EA-aligned moral philosopher, and Holden Karnofsky, co-CEO of EA-centric funding platform OpenPhilanthropy.
McCaskill didn’t just dismiss the allegations against Bankman-Fried but “basically threatened” those raising the concerns, according to Naia Bouscal, a former software engineer at Alameda.
Because McCaskill was so powerful within the Effective Altruism movement, and so many early Alameda staffers were also part of the movement, his opposition discouraged and blocked those at Alameda who tried to hold Bankman-Fried accountable early on. McCaskill, according to one involved person, had the power to influence employment options across the constellation of EA-linked nonprofits.
Bankman-Fried reportedly wielded his connection to McCaskill as a cudgel within Alameda. “[Bankman-Fried] was like, ‘I could destroy you,’” one person characterized the then-Alameda CEO’s behavior to Time. “’Will [McCaskill] and Holden [Karnofsy] would believe me over you. No one is going to believe you.’”
Seemingly, in part, thanks to McCaskill’s defense, Bankman-Fried was not forced to resign after the April 2018 meeting. Instead, the four executives who initially raised the concerns left, along with about half of Alameda’s employees at the time.
McCaskill, Karnofsky and Beckstead, then, seem to have played a direct and key role in enabling the FTX fraud – and they were richly rewarded by their pet con man. After FTX’s explosive growth starting in 2020, McCaskill enjoyed a wave of interest generated by the supposed Effective Altruist billionaire he had spent years cultivating. Beckstead would be named head of the FTX Future Fund, a Potemkin nonprofit that helped build Bankman-Fried’s fluffy image – and attract more victims.
The revelations are damning for the individuals involved, and the Effective Altruism movement as a whole. While they may not have been aware of the details of Bankman-Fried’s misdeeds, they seem to have been well aware that his supposed moral stance was a fraud. Their alleged refusal to reckon with allegations of what amounts to workplace sexual abuse is particularly vile.
The ideas advanced by McCaskill and his cohort have long been lambasted as a convenient fig leaf helping rapacious capitalists distract others, and themselves, from their exploitative greed. FTX became the literal instantiation of that theoretical critique, demonstrating a profound rot at the heart of the Effective Altruism movement – or perhaps more accurately, a palsy-inducing tumor in its head.
Like all tumors, this one should be excised: McCaskill’s continued presence at Oxford, in particular, is a nasty, dripping blemish on the face of the entire field of academic philosophy. Unfortunately, the FTX story has become an object lesson in how rarely such ailments are actually addressed at the very top of our society – how freely the cancer of greed and self-dealing has been allowed to spread its tendrils from Oxford to Stanford to MIT to the U.S. Congress, destroying the lives of normal people at every step of the way.
Treasury Markets Are Drying Up, But Stablecoin Issuers Say They’re Still Liquid (Blockworks)
These ‘Knights’ Will Donate Samurai Sword to Met Museum—After Minting It as an NFT (Decrypt)
The show goes on: How Signature Bank’s bailout saved Broadway (Protos)
Crypto Is Finally Getting Its First Supreme Court Appearance (Bloomberg – Paywalled)
We know that the recent events with the U.S. banking system have put many in the crypto and Web3 community in a challenging situation. That’s why we have decided to extend our current prices for Consensus 2023. This means that you have a few more days to take advantage of these savings on your registration for the most important event in crypto and Web3.
Kudos for making it this far! On occasion, we’ll give our loyal Node readers the opportunity to claim DESK, our social token, which is a mechanism for returning the value of engagement directly to the users who create it.
