The Lever - LEVER WEEKLY: Crypto’s “Useful Stooge”

Friends:

This is Lever Weekly, a recap of our work from the past week. If you only read one email from us all week, this should be it.

Below you will find a breakdown of our reporting, podcasts, videos, and live events — a feature now open to all subscribers. Following that, we are providing paid subscribers with an original column, written by a member of The Lever, connecting the dots on our coverage to deliver important takeaways.

In this week’s column, Julia Rock demystifies last week’s cryptocurrency collapse, exposing how the recent scandal reveals a much deeper problem with ties to longstanding institutions.

Stuff The Lever Reported This Week:

• Will Biden End An Illegal $50 Billion Tax Giveaway? — “Since 2018, state legislatures have been helping the richest Americans evade billions of dollars of taxes every year in flagrant violation of federal law — and the Internal Revenue Service (IRS) under both Presidents Donald Trump and Joe Biden has rubber-stamped the scheme.”

• Washington’s $32 Billion Crypto Scam — “The collapse underscores how the $849-billion crypto industry... has been protected by regulators who are asleep at the wheel, while hapless ordinary investors, suckered in with slick ads from prominent celebrities and athletes, lose their savings.”

• Wall Street Readies An Avalanche Of Lies — “Public pensions with investments in private equity are about to face a reckoning — but they have no way of knowing how bad it might get.”

• Does Post-Nazi Germany Hold The Secret To Climate Reparations? — “As COP27 officials grapple with how to address climate-related ‘loss and damage,’ wealthy countries dodging their financial responsibilities would do better to look to post-war Germany.”

• The Low-Profile Runoff That Could Change Louisiana’s Climate Trajectory — “The results could determine whether the state’s ambitious climate action plan comes to fruition, and play a key role in shaping how the Gulf South endures the climate crisis.”

• Biden Administration Caves To Pressure On Student Debt Bankruptcy — “The Justice Department announced Thursday that it would no longer fight the bankruptcy efforts of federal student loan borrowers if they are being crushed by debt.”

• YOU LOVE TO SEE IT: Health Care Becomes A Human Right — “Also: Dark money takes a hit in Arizona, undocumented students will finally receive financial assistance, and an Ohio city finds a novel way to wipe out medical debt.”

Stuff To Watch & Listen To:

• LEVER TIME: Tales From The Crypto — David is joined by journalist and crypto policy experts Jacob Silverman and Matt Stoller, who explain last week’s crypto debacle and what should be done to fix the problem.

• LEVER TIME PREMIUM: The Most Toxic Place In America — David interviews journalist and author Joshua Frank about his new book Atomic Days: The Untold Story of the Most Toxic Place in America, about the Hanford Nuclear Reservation in Washington state.

• Chapo Blue — The podcast Chapo Trap House digs into The Lever’s crypto coverage, the midterms, and Elon Musk’s Twitter takeover.

Crypto’s “Useful Stooge”

By Julia Rock

Within days, a Democratic megadonor’s cryptocurrency empire came crashing down. Sam Bankman-Fried’s crypto exchange platform FTX, once valued at $32 billion, filed for bankruptcy. Customer funds vanished from the exchange overnight, and all deposits have been frozen indefinitely.

Reports suggest that Bankman-Fried was using consumer deposits from FTX to make risky bets through his separate crypto research and trading firm, Alameda Research, and using digital tokens issued by FTX as leverage, despite them having little real value.

The unfolding story of Bankman-Fried and FTX is one of alleged fraud on the scale of Bernie Madoff’s notorious Ponzi scheme — a comparison being made by crypto executives and former regulators alike.

But like Madoff’s scheme, the problem is far bigger than one person.