Wait, disregard my earlier post, I wasn’t thinking straight. I saw SBF say “F— regulators” and instantly wanted to give him all my money. A day later I realized AH, that’s his schtick! Say some politically expedient words, signal that you’re in the in-group, and My god how the money rolls in!

Remember that time Bitfinex suffered a $60 million hack, issued BFX tokens as placeholders for customer deposits, and eventually paid it all back? It was hailed as a triumph of the FREE MARKETS. And remember that time Poloniex did the same thing? Even Ponzi schemes get lucky sometimes.

Bitfinex lost 120,000 BTC in the 2016 hack. That would be worth over $2 billion today.

In theory FTX could pull off the same stunt. Replace the vanished funds with tokens of a different stripe and let the trading continue. $8 billion sounds like a huge hole to fill, but FTX only misappropriated 70,000 BTC. The rest of consists of shitcoins. Do casino patrons care if their gambling chips change color?

Arguably, a one-time hack is different from profligate political spending. Speaking of which — Remember that time Citigroup, Bank of America, JP Morgan Chase, Goldman Sachs received a $700 billion bailout from the Fed, and paid it all back? Do you think they suspended political contributions during that time? Do you think they refrained from using bailout money for banker bonuses? Hahahaha.

Here’s the highly esteemed Interfluidity with my favorite description of the 2008 bailout and subsequent repayment:

Suppose my kid’s meth habit got the best of him. He needs to come up with $100K quick or his dealer’s gonna whack him. But he’s a good kid, really! Coulda happened to anyone. So I “lend” him the money, even though he has no visible means of support and the sketchiest loan sharks in town wouldn’t give him the time of day. Now I believe in bootstraps and hard work, individualism and self-reliance. So I tell my son. “Son, you are going to pay me back every penny of that loan. You are going to work it off. I have arranged with one of my golf buddies, a guy who owes me a favor or three, a job that pays $200K a year. You’d better show up every day at 9 a.m. and sit behind that desk, and get me back my money!” And he does! After a year, he’s made me whole. What a good kid.
…
After assuming the banking system’s downside risk, the US government engineered a wide variety of favorable circumstances that helped banks “earn” their way back to quasi-health.

Free markets involve a good deal of engineering. Did Bitfinex “engineer” (through wash trades and Willybots) the bull market that enabled debt repayment? Or did Bitfinex provide such a valuable service to the industry that a bull market naturally ensued. Either way, bitcoin HODLers end up being the biggest beneficiaries. It’s a tremendous act of altruism that Maximalists keep railing against the shitcoins.