Blowing Up the Crypto Cartel https://thebaffler.com/outbursts/blowing-up-the-crypto-cartel-silverman <https://thebaffler.com/outbursts/blowing-up-the-crypto-cartel-silverman
How FTX’s collapse broke an omerta by Jacob Silverman, The Baffler, July 2023
Despite claims of “decentralization,” the cryptocurrency industry is controlled by a powerful cartel of wealthy figures who, with time, have evolved to incorporate many of the same institutions tied to the existing centralized financial system they supposedly set out to replace.
As long as crypto is run by offshore operators using a parallel financial system that is only partly visible to regulators, law enforcement, and the general public, there will always be incentives for insiders to collaborate, exchange privileged information, and work to their mutual advantage.
there are many people in crypto, maybe even the bulk of participants, who are in it for honest reasons: they like the technology, they appreciate the novelty, they have libertarian ideas about the separation of the state and money, or perhaps they just want to gamble and try to get rich. But these people, the ones who actually bring much-needed fiat dollars into the system, are playing a different game. They are at a severe disadvantage, buying tokens at artificially inflated prices from venture capitalists and exchange CEOs who got them at friends-and-family discounts from their colleagues. As crypto critics like to say, these retail traders are the exit liquidity for the tech billionaires promising economic emancipation. They are the means by which the people running the cartel cash out. They are the marks. And they can’t be allowed to get away.