Welcome back everyone. I am Caspian Sea.
I'm joined as usual by my partner in crime.
Mr. Bennett Tomlin. How are you today?
I'm doing well. How are you kiss, tired?
Drinking some coffee. It's pretty late for it, but I
need it today. We are going over something that
we didn't go over previously, which I found interesting.
We've, we have talked about Wormhole.
We did a full episode on that though at the time.
Yeah, I don't think we understood who had done it or
what what it was about. We still don't know who's done
Wormhole right? But we didn't.
Yeah, we'd it's I guess it's just very curious to me.
That one was so big. The other big one that I we've
mentioned in other episodes is definitely axi axi Infinity,
Ronan Network. They got hacked for the biggest
bridge hack ever. That was also last year
believes. So two of the biggest hacks ever
last year, and we also had over a billion in Bridge facts alone
in 2022. You so it was a crazy year but
today we're talking about Harmony because they're in the
news. Again, The Horizon bridge on the
harmony blockchain which happened last year.
Again, one of the bigger ones roughly 100 million dollars and
basically this was done. It's been confirmed by the
Lazarus Group which also did the Ronin network.
If I'm remembering correctly. It is correct.
They're moving These funds and that's why we're going to talk
about it. Let's get started with what
actually happened last year to the horizon.
Aizen Bridge there Bridge might many so-called Bridges was a
glorified multi signature wallet and it seems what happened is
their private Keys. Got compromised is what we knew
up until a few days ago when the FBI issued their reports
confirming that the Lazarus group was behind this hack and
detailing a little bit more about how they did it.
In some respects, it was very similar to the 2015 bitstamp
pack or what we believe happened with the 2016.
Phoenix hack, where was a spear phishing attack with
well-designed malware exploits? That once the user open them on
their system, would then be able to compromise and get the
private Keys. It seems Lazarus group was able
to successfully Spearfish. Enough key holders at Harmony to
be able to compromise the bridge and withdraw a whole bunch of
assets. And to be clear there, multisig
was composed of if I and I believe I'm getting this
correctly. I don't know what the deal is
now. I know they're still kicking
somehow, I believe there were four multi cigs and you
basically just need to compromise to of those multi
Sig's to compromise the bridge itself, which ultimately is what
happened, right? So they compromised this chain,
this chain is, as you said etherium Finance, Mart chain, we
got this hundred million dollars.
That was moved into numerous State numerous coins.
It was in USD T, it was in aetherium, it was in rap
Bitcoin. But they transferred, if I'm
going again, hopefully, I'm getting this correctly.
They immediately transferred all of it into a theorems that
right. I think the swapped least the
majority of it pretty quickly into aetherium, they especially
had to make sure they did that with the centralized stable
coins, Circle, and tether in those, because those can be
frozen by the issuer, right? And so I know those were quickly
swapped for etherium. I don't know if all of the
assets were immediately swap for aetherium, but broadly, their
goal was to get Them into a theorem because aetherium is
harder to freeze or stop. Ultimately, they got this
etherium, they did tornado cash, they basically mixed it right.
They mix this etherium at some point after stealing it, but
people were still, or did they not was that just recently?
So, I don't think they did use tornado cash on.
Think, the harmony hacker did before, their recent little
thing that we're about to get to, they did pass it through
railgun, which is a chain hop. Kings zero-knowledge privacy
protocol and then they started moving it onto a whole bunch of
different exchanges including notably will be which is which
is run by Justin son. They won't say it's run by
Justin Sun but holy shit. It's run by Justin son.
Can we all just agree? It's run by Justin son.
I mean I think even Justin son is ready to admit that now.
Right? Kind of think so you'll have to
admit it. Yeah, and so tens of millions of
dollars were transferred on do OB and then immediately
Transferred off and then sent to a whole bunch of different
addresses and I think mixed again before then moving on to
some other exchanges. So what they were clearly trying
to do with this quick move through who OB is this exchange
was to try to add this extra level of mixing to their asset
because as it goes into the hot wallet and then out of the hot
wallet into these other addresses.
These coins are fungible, the etherium, in a single VOA
account, is fungible all of its going in, and it's coming out,
it's not Like Bitcoin where you can track specific, unspent,
transaction outputs. And so by sending it to The
Exchange and immediately withdrawing your helping confuse
the path of the funds. We basically had this major hack
for roughly 100 million dollars. I believe in total, it was
actually ninety-nine point seven million dollars worth of assets
at the time. So this happened in June of last
year. This is pretty interesting to
me. That what happened was?
They drained a bridge for all of its assets or most of its
assets. Roughly 100 million dollars at
the time. They did some coin hopping
Maneuvers, they Consolidated their assets and now we're
seeing eight months later. North Korean hacking group
Lazarus is now doing something with them.
I guess a bunch of it was frozen.
I want to say, like, 150 Bitcoin worth got frozen which would be
a chunk of it, but certainly not the whole thing.
I think Zach xbt. We've had on the show before,
identified at least twenty six point four million, which was
pulled off of will be after being deposited there, into that
part definitely. Is not frozen and we're saying
Frozen, we should really more, say seized, right?
Like will be took possession of his assets before, they could be
withdrawn by the hacker. And then what we saw after
they're mixing and stuff, is they left to OB was them, trying
to get it to a bunch of other like, small OTC death, small
exchanges. And so, it looks like Lazarus
group is trying to convert cryptocurrency into dirty, feet
to fund their missile program, their nuclear program.
That seems to be What some reporting has suggested the
Lazarus group funds are used for so I just did the math.
You said roughly 150 Bitcoin. I think that a amounts to at
right now current prices, I'm suggesting that what it's
22,000, I haven't checked its recently, probably, right?
So I'm just saying 22,000, that's that's, we'll just go
three and a half million dollars.
So that's a 3.5 percent fee. If they got the rest off of
whoa, be and were able to move it.
That that is A 3.5 percent transaction fee for being able
to move the rest of these funds. These illicit funds for them.
Hopefully I guess right? If they're if the idea was to do
this is to be able to exchange that for either US dollars or
Services of some kind. I don't know what services you
could get with actual etherium but I would think you would be
trading this for US Dollars un or some other like currency that
you could then buy goods from any.
A allies that you have, if they got the rest of those funds off
of Woe be, I don't think the story is, will be freezes, 3.5
percent of the funds. I think the story is they moved
97% of their funds. But did they move all of the,
all of the money on to OB or just a small chunk?
I am honestly, not sure. And part of the issue here is
these quote, these hacks are always quoted in dollar amounts,
right? But they'd eventually became
etherium in whatever else, right?
And that asset is Malin. And so I don't know how much of
the numbers were seeing were changed because the price of
aetherium has fallen and how much might be them moving other
funds through other avenues that they weren't trying to mixer
obscure through, who won't be right.
I'm going through Zach's work which is great.
We also this friend of the show we've had them on so I you know
I urge anyone who isn't already following Zach xbt on Twitter
obviously, go ahead and do that. They were able to withdraw
according to Zach, 38 million dollars.
Worth of worth of bitcoin, which is 10% of the total was frozen
is what we can say, which is better than nothing.
I don't know. Not great.
That's still again, like I'm saying the story doesn't seem to
be. So, whoa, be seizes all of all
of this cryptocurrency and does a good job of stopping the North
Korean Hackers from deploying their Capital.
It seems to me like a story is North Korean hackers are able to
obvious Kate majority of the funds they put on.
Whoa, be yeah, and I think something I might have not fully
appreciated here. Did they swap at her will be?
Did they transact? Because they came in with a
theory, I mean, came out with Bitcoin, right?
Yeah. So they didn't just like hit the
exchange and then withdraw, they hit the exchange transact, sold
this aetherium in and then coin and then hold it out, which is
definitely worse for. Whoa.
Be also worth pointing out. He shows an example will link to
it but he shows an example of the Lazarus group chain hopping
funds and Example, he shows is Bitcoin to Avalanche.
We've never talked about that on the show, but that is another
Block Chain. So Bitcoin to Avalanche to
aetherium to bit torrent, which is not something you would
necessarily suspect to Tron and BitTorrent intron or both Justin
son coins. So I don't know, like they're
relying on adjusting son exchange and then they're
chained hopping to to Justin son cryptocurrencies.
Like, it seems like the terrorists and criminals are
enjoying the concepts that Justin son is building out.
Yes, we did an episode on Justin son, you and I have very strong
opinions on Justin son. I certainly do and it is strange
that they chose will be to do this.
I don't think it's that strange. That like to Justin Sun coins
were involved in this chain hopping.
My understanding is that how this privacy protocol is.
Supposed to work, as you move to a whole bunch of chains to try
to obscure it as much as possible.
But yeah, I get that toy. I got it.
That was a little weird but yeah.
No, you're right, broadly that like Justin sun has ended up
whether knowingly or unknowingly providing useful infrastructure
for criminals. And I think that's kind of the
question, right, knowingly, or unknowingly.
I'm interested in why they would use BitTorrent particularly to
chain up. I don't, because it's not like
she don't suspect that bit that I don't suspect.
A BitTorrent, is getting a ton of Volume did chain.
I got maybe I'm wrong. Right, my understanding is it's
a dead chain, no? Real development, very little
use trading, volume, 15, 15, and a half million.
I mean, in the scheme of things that isn't very much and it's
likely, I'm Shane volume like, people actually transacting with
that. I think is yeah, that's true.
First. Probably nothing.
Yeah. Probably nothing.
And so, I was just looking back. I think it was by Nance, who
ended up being the one who froze those Bitcoins.
We're previously discussing it almost exclusively trades on
Justin Sun, exchanges 30% of its volume is on Polonia X and Y OB
and the rest is just spread out between a bunch of other things.
But again this points to the idea of like I don't know, maybe
maybe that suggests that when they're chained hopping, those
are the cheapest chains for them to transact in.
Well okay so either we willing to do that is that why is the
volume doesn't benefit the We understand that on chain volume
certainly doesn't benefit. I have only kept the barest of
looks at BitTorrent since Justin's an acquired it and I
just checked it out again and it seems part of its own purpose is
to serve as some kind of cross chain infrastructure.
Like their advertising is the chain connecting the chains.
And so now I wonder if the reason it was used just because
it is useful for chain hopping specifically because of How it's
built. Which again, I haven't kept that
much up on me cuz it's Justin son, doing just in Sun bullshit.
I'm wondering if if our perception of Justin son has
been, I guess misguided insofar as perhaps a lot of the stuff
he's doing is quite deliberate and the crowds that he's
attracting are exactly who he wants to.
Also I see him getting a lot more, praise as he still exists
even in the cryptocurrency industry which I think is funny.
Like I feel like I was just giving him props because he
hasn't been arrested yet continued.
Existence is now the standard for excellence in
cryptocurrency? Bar is so low.
Have you ever being in prison over the last two years not yet
been indicted in her still currently breathing?
You're a hero? Yeah this is It's funny because
it's like I'm reflecting on it. I'm like literally though like
the fact that do Quan has been charged but is not sitting in a
prison cell. People are like celebrate him
celebrate this man and it's like, is a sewer trying to raise
25 million to do whatever it is. They're doing, it's a comedy.
It's a fucking comedy. See, I just wonder if a lot of
this is very deliberate. And as much as like, it clearly
attracts the wrong, kind of attention right here.
We are talking about a known North Korean hacking group,
that's done insane things before like they literally, almost were
able to hack the, the FED. Do you know that story have?
We talked about that before. I don't think we've talked about
it. I do remember that they like
broadly North Korea switched from Interrupt Banks to robbing
cryptocurrencies because it was so much easier to get the
cryptocurrencies. 35 fraudulent. Instructions were issued by
security hackers via the Swift Network to illegally transfer
close to a billion dollars from the Federal Reserve Bank of New
York belonging to a Bangladesh Bank, the Central Bank of
Bangladesh, these guys are clearly quite talented and able
to deal money almost that they did steal.
They didn't steal billion dollars but they did steal money
essentially from I'm not only the Central Bank of Bangladesh,
but the Federal Reserve of New York.
So it's kind of crazy that like you said now they've just moved
onto like Oh you mean we can steal like ten times as much by
just Hacking these civilian networks instead that aren't
protected and have all of their code open source and haven't
checked for errors and are simple multi cigs that we can
break. I don't know.
It's troubling to me that it. I would be worried if I was just
in Sun and it's funny. I kind of figured that we
wouldn't be discussing bridges in 2023 but I think this is
going to come up. Like I do they're not going
away. They're not going away and this
is Come up again. Yes, it absolutely will.
I mean, there's two more we intend to discuss in this
episode alone, but I do think there is kind of an interesting
Dynamic. I want to focus on here.
One of the other Bridges we want to discuss is Wormhole which we
discussed in the past. And at the time was one of the
largest cryptocurrency hex ever with about 300 million being
taken out of the bridge that hacker had.
Since swapped basically all of it into ether and has now
started this absurd process. S of going levered long and
staked ether. So they swapped their ether for
wrapped staked ether borrowed, I against that use that to buy
more staked. Ether wrapped that borrowed more
die against that use that to buy more staked.
Ether wrapped that borrowed more die against then use that to buy
more staked ether. Until the hacker of the Wormhole
Bridge has ended up as the If largest holder of staked ether
and the reason I'm bringing this up is one, it's wild to watch
this hacker. Just go levered long on staked
etherium but also because it illustrates something we talked
about back in our episode about the 2016 bitfenix hack.
When we're talking about Roswell con and a Dutch it's hard to
cash out, hot cryptocurrencies, these groups do it.
Like Lazarus group works with a variety of money launderers,
around the world to be able to make these Versions and to
eventually get this into cash, but it is challenging for these
hackers to get the majority of their funds out in usable
currency. And so we see them take these
moves where they end up more in the cryptocurrency ecosystem,
right? Because it is so challenging to
cash out. And I think this Wormhole hacker
behavior of leveraging long and into the cryptocurrency,
ecosystem is an interesting contrast to the harmony Bridge.
Hacker who just keeps mixing and chain hopping mixing in.
Not helping and sending the road desks and exchanges to cash out
what they can't. And so like, it looks to me,
like, they're probably too, pretty distinct groups with
different motivations. It's fascinating as well that
like yeah, as you said, okay, so one of them is like becoming
this whale and the other. It's like it's wild because it's
almost like the Lazarus group is poisoning Wells as it goes to
these different places to cash out who's going to pay a
responsibility, right? If they cash out money, if
they're able to move money through, these exchanges and
they're able to cash out into something either less
transparent or more obvious gated or however they make it
work for themselves or straight up cash who is going to have to
bear that burden and I suspect it's the exchanges and the
people who work with them I think poisoning the well was a
really interesting way to put it because you'll remember from
when tornado cash was added to the list of ofac sanctions one
The justifications is that Lazarus group had used tornado
cash in the past. And so now, any other mixer,
they end up using any of these privacy protocols they end up
passing their coins through are potentially future targets of
the global us, sanctions regime. It's a tough position to be in
and I'm not in a sense I am. But that, I mean, geez, what are
you supposed to do? I don't know what you're
supposed to do. I don't know how you're supposed
to deal with that in any meaningful sense.
Clearly, if Easy and Justin son, two of the biggest names in the
industry are working together to try to stop these guys from
using their exchanges and yet, they're able to move.
I don't know how 90% of their money still into and out of
places. Like, whoa, be, I mean, I don't
know. I don't know what you do.
I don't know how you solve that. That seems like a potentially
very serious problem for a centralized exchange I think.
And there have been Cases of this in the past especially with
like us domiciled exchanges, where there have been
prohibitions or limitations on people depositing using coins
that were recently mixed. It's not necessarily common or
Universal but you can dig through Reddit or the old forms
and find exchanges basically saying you're set to withdraw,
only you deposited from this mixer.
We don't want to do business with you anymore.
I think that It is possible, that is going to become a more
common compliance strategy for exchanges to just reduce some of
that risk. Then you can track the known,
hot addresses and hot coins and reduce the risk that those are
going to quickly be mixed deposited and then withdrawn,
right? Because you're not going to let
them take those at. Once you see them, come from the
mixer, right? And so, potentially, I think
that there's going to More pressure on exchanges to take
more, proactive steps like that. So I think that's may be
accurate, but but my issue, I guess my issue with it.
Is that I think and we see this with banks as well.
We see this with all kinds of platforms.
I think in l.a. even clubs and stuff are like basically what
I'm going to suggest is that there's a you understand,
there's rules that are going to be broken and finds that you're
going to have to pay and literally as a part of your
budget. It.
And I suspect this is at every Central.
Again, every centralized crypto currency exchange of part of
your budget is just designated. Okay, these are the fines we're
expecting to pay for the next year.
For breaking ofac sanctions for offering unregistered Securities
for whatever, right? And there's a trade-off that
you're making because you're like, we're paying maybe a
hundred million dollars in fines, but we're going to make
three hundred million dollars from offering all this stuff and
These rules so who cares and I think that having the volume
allowing these tradable markets and allowing people to do a
certain amount of kyc free trading on your platforms.
Like it's always going to be an easy and attractive option to
these business owners. I think is my way of putting it
especially if the potential penalties that they're paying
are simply finds you. And I think this is kind of what
it comes down to if there is ever Ever meaningful enforcement
against offshore exchanges by the United States?
Are they going to be looking for like death penalties?
Take these places out. Lock these people up kind of
things or are they going to be willing to take large fines and
settlements and things like that in theory?
Like you would think that the differentiator between those two
types of cases should be whether or not the exchange was making a
good faith effort. And so things like exchanges
collaborating to He's Bad Assets and collaborate with the
Department of Justice on that is probably going to make it more
likely you get a fine rather than a death penalty.
I think that's a fair assessment and again reason for me to
suspect that we're not going to see meaningful transitions or
changes to plenty of these exchanges.
While we might see more from a few or maybe even these major
exchanges like Finance have been kind of forced to I think
overall, that's right. Like that isn't the design
that's not not that that's not going to drive potential
business to you and the note of Finance if I can take over for a
second. Yeah please Finance kind of has
their own Bridge, it's not really a bridge but by Nance
issues, 94 tokens on by Nance, smart chain that are supposed to
be backed by tokens from other chains and things like that.
It's basically a bridge except they're more open about it being
administered. Bye-bye.
It's and a few days ago, Bloomberg reported that for
dozens of these coins. That's right.
They had not been keeping the collateral for them separate and
had instead been commingling it with client funds in cold
wallets. This comes after data fin
Ovation confirmed, that Finance Peg, be USD issued, out of
Finance Gene was regularly not backed by adequate collateral in
the wallet. That was supposed to have it.
So there's a couple of things going on here that I think are
really important to draw attention to and then something
that's kind of related them and I want to pull this towards but
one this suggests operational issues and shortfalls because
they were not making sure that they had the Assets in the right
places. Before these tokens were being
issued on to finance, chained to these assets were being stored
in these cold wallets. Finances proof of reserves that
was done in December by Masters. No longer does cryptocurrency
work compared the balance in the finance, cold wallets to user
liabilities, to prove, they were fully reserved.
These B tokens are not customer liabilities, but the assets for
them were stored in these cold wallet.
So the assets were over-represented in the
liabilities were underrepresented in this
analysis for the proof of Reserve.
So we've got commingling of client and corporate funds,
which is already problematic. Attic.
We have them having these corporate Assets in there for
the proof of reserves. And we have them just not having
evidence of having adequate collateral for these.
And, well, I was looking into this, I read the by Nance proof
of reserves report again, and I noticed there was two thousand
one hundred, fifty times as much u.s. d.c. in reserves.
As they needed to cover user liabilities, they had about 1
million dollars in total user liabilities and well over.
Two billion USD, see and hand, when this report happened, the
reason for this seems to be that they announced.
They were going to be converting, all us DC, deposits
into be USD, but they needed to keep enough u.s.
DC on hand, to be able to service withdrawals and things
like that. However, we have issues again,
namely one, it suggests that they had over two billion
dollars of unencumbered assets that they were a corporate
assets that They were able to use to acquire these Surplus
table coins, because when you hear conversion, what you would
expect by Nance to do, is take the deposited USD, see redeem,
it issue, be USD, and have that on hand, but instead they have
billions of dollars in Surplus means they had to create
billions of dollars of extra. Be USD, without the benefit of
being able to redeem that u.s. DC, which suggests Finance has
far more liquid unencumbered cash in the banking system than
I initially. I acted the other problem is
that us DC shows up on the proof of reserves again and there are
no customer to liabilities in u.s.
DC which means all the u.s. d.c. they have on hand is Corporate
fun. They're showing those corporate
funds in the proof of reserves again.
And as I looked into this even more, I started all of their
corporate funds are likely stored in the by Nance wallets
and we know this, because if you go back to their own blog posts,
specifically the one entitled to, Transparency on wallets at
Finance, you hear them claimed that they hold all of its
clients crypto Assets in segregated accounts which are
identified separately from any accounts, used to hold crypto
assets belonging to buy Nance. But when you read further down
in that same article, you realize they don't mean
segregated into a separate account like on the blockchain.
They mean they have an internal accounting system that keeps
track of how much of the amount in these cold wallets or
whatever. Is client funds and how much is
Corporate funds? Which again, brings us back to
two issues, one, the proof of reserves.
Almost certainly contains by Finance corporate funds, which
were used as assets, and not represented as liabilities,
which brings into question. The claims of solvency that's
easy was making after that report was published to the
entire ability for that to count as any kind of segregation,
depends on finances of Ability to maintain accurate, internal
accounting records and they had dozens of their betokens not
appropriately manage. They had their Flagship by Nance
Peg. Be USD, stable coin, not
appropriately. Managed to the tunes of millions
and millions and millions of dollars.
So their entire claim segregation of client crypto
assets depends entirely on by Nance having perfect or very,
very good. Internal accounting records and
the former CFO up Finance Italy was not allowed to even see the
by Nance books. The entire thing is fucking
bullshit in, which you have to place your entire trust into the
demonstrated lack of ability, for finance to maintain accurate
records. Hopefully, everybody knows where
I'm going with this, where have we seen this before, right?
Where have we seen this before? And if you, if your answer is
FTX, you're right, but if your answer is also almost every
fraud ever, you're also right? Like Enron When was this
Worldcom was that most of the major corporate frauds in the
past 50 years have relied on accounting fraud to some degree
or at least like significant mismanagement to the point of
paying no attention whatsoever to the point of criminal
negligence? And what?
You're pointing to suggest that and we've talked about this with
tether with other companies, like either, what what is
happening here is that they're purposely op you skating?
Hide something that if it comes out they know is very bad for
their business which is terrible and you hope that's not the
case. Or they're so bad at corporate
management and accounting that they just have completely lost
track. And that's terrible to because
you really need these people to be in control of what is
happening with with these funds. We understand we've seen we've
seen what can go wrong when you're not paying enough
attention to, what is happening with your, with your funds, in
your centralized exchange, he's called sandbank manfried.
And like I just, this is terrifying to me, I would be
scared, it doesn't mean that anything is on essentially
unbag, even though it is on back door, it's improperly directed
funds. It doesn't mean that anything is
going to go bankrupt. It doesn't mean that anybody
like Finance doesn't have Funds to continue operations.
It's nothing like that. That is not what the suggestion
is. I'm saying the scared part is
that they're not paying attention.
They are not paying attention and either it's on purpose or by
accident and both are bad. That's all I'm saying and that
and if these people are the ones in charge of your money and your
moving money on to their platform, This should worry,
that's all. It doesn't mean you have to like
at this is not Financial advice, I guess is what I'm trying to
say, but like it just it's troubling, yes, it absolutely
is. And like I do want to go back to
your point of this doesn't mean that the funds weren't there,
right? It gives us reason to question
it based on finances, own public statements in this evidence, but
that doesn't mean it's untrue. And if we go back to the cftc
case against Heather, one of the things they ended up proving is
that tether? I was willing to issue tethers
against anticipated, wire transfers.
There's this tendency among cryptocurrency companies because
they're already operating somewhat in the gray to convince
themselves. The exact order of operations is
not that important. It doesn't matter.
If you issue them before you get the money in your bank account,
as long as the money eventually, gets to your bank account, it
doesn't matter if you have these without the appropriate tokens
in the collateral wallet, as long as they eventually get.
And I think that kind of idea combined with the fact that by
Nance has been playing a regulation and jurisdiction
hopping game over the last several years where they
transfer between these corporate entities.
So often, I have an intuition that it would be very
challenging even for the current c-level executive leadership at
Finance to really get a solid understanding of the complete
financial situation of the finance Empire.
There's these Questions like this USD see like these B tokens
like this by Nance Peg. PUSD that suggests, there are
serious gaps in the record. Keeping when you can't get an
audit, it's concerning if it's clear that you can't get an
actual audit and nobody knows where the money is, which again
like this should sound familiar to people, you should be like
reacting like, oh yep, this sounds like FTX the sounds like
tether the Like bitfenix. This sounds like it.
Yeah, of course. It does.
Of course it does. That doesn't mean it ends up the
same way. It just means even the even the
most powerful and largest players in the industry are
doing a piss-poor job of maintaining, any semblance of
being a respectable Financial entity.
It's especially striking to me because arguably by Is systemic
importance, just keeps going up there.
What? Like seventy percent of the
volume and cryptocurrency at this point.
Yeah. Something like that.
A complete asset seizure, a shutdown or an F.
Textile, collapse of Finance. It's devastating, it's Mount gox
level. I think that's right.
I would perceive that the regulators and law enforcement
agents would prefer to work with the largest player as opposed to
shut down the largest player. R.
So I don't think I don't think. Guess we'll find out.
So it would be more likely, I think it would be more likely
that there would be such drastic mismanagement at finance that it
could have catastrophic failure on its own.
I think that is a real possibility just based on what
we've seen recently regarding their books.
So I think that is far more likely than regulators and law
enforcement agents figuring out a way to shut it down.
Entirely I I think I agree with you.
There was a Department of Justice press conference
recently, which left a lot of people feeling unfulfilled,
because they announced that it was going to be the, like,
largest cryptocurrency indictment they had done and it
ended up being B Lotto, a Hydra darknet Market connected,
Russian Chinese exchange, that had been laundering the proceeds
from this drug trafficking and probably laundering some money
for an oligarch somewhere. What's interesting is that since
the feds shut down Hydra several months ago, they have seemed to
have been working through many of the counterparties for Hydra
and you know which one is the largest one still standing.
Is it by any chance? It is yeah so there's a part of
me especially with Reuters reporting again that they got
confirmation that like 300 million went from B Lotto to buy
Nance after coming from Hydra besides the direct Hydra
transfers to buy Nance. Listen Finance has the former
Chief of the Department of Justice's.
Am Lars money laundering and asset recovery service in these
See metaphorically, I don't know if he's physically, they're
trying to negotiate a deal for finance.
According to the Reuters is reporting, my gut instinct is
they're going to get a deal but there's a part of me that looks
at what they did to B lotto and if you end up with Finance being
larger than that, how do you publicly justify pursuing one
and letting the other go, they seemingly have done done as much
with banks and other things before.
So you agree that I my only counter point would be that.
Yeah that like if we look at how the great financial crisis Was
handled by regulators and law enforcement, you know, I think
what was it like 11 Bank was criminally prosecuted.
Wasn't it? Like the chairs like small
Community Bank for? Yeah.
And even they ended up grants. Not getting sentence.
We're not getting yeah. Found guilty.
And so like, well because they really were not the ones to
prosecute and so yeah, anyway yeah, money power Prestige
within the in the industry in the department of Of justices
hesitancy to, cause a collapse of in Industry makes me favor
Finance getting some kind of deal especially when you have
the former Chief negotiating on your behalf.
But Anything is possible. I agree with that.
Anything is possible. Yeah, I'm not suggesting, it's
impossible and that I am not suggesting.
Also, the biggest likelihood is that, you know, realistically
finances. Fine.
And nobody needs to worry, right?
Yeah. That's like I think it's we need
to counter all of this with, we're not trying to pull a fire
alarm when there is clearly just an oven that's overheated or
something and you just need to turn the oven off or something.
Like we don't know. We don't know what if it's an
oil fire in the oven? We don't know.
Like we don't know what's actually going on, so we can't
really suggest anything, but we absolutely do not have like a
strong reason to believe finances.
Insolvent what we do know is by Nance has serious process gaps
that they seem to have transparency issues, even
internally to c-level Executives.
And there are these Strange Behaviors and ongoing.
Oceans. That's what we know.
But yeah we're kind of off the rails here.
Anyway, this was supposed to be a bridge discussion about
Lazarus group and I think we've covered that, if anything else
occurs with this, I this is a story.
I'd like us to Circle back to it some point because I think North
Korea is just fascinating and them trying to get their hands.
So desperately on anything. Even cash adjacent is a, I don't
know, it's a fascinating story to me so we'll continue to cover
this obviously. Lee and let's let's give a shout
out to the Lazarus group for funding crypto critics corner.
Thank you guys. Hit that like And subscribe
button for all our Cheese's. I really don't want the OCC or
some shit to cut out for us. Absolutely fucking joking.
Absolutely fucking joking FBI like Christ almighty.
Yeah, yeah. Yeah.
Emily. You never know what?
You never know. What the fuck is Griffith.
I'm gonna, you know, your backpack here.
Let's figure out a different way to end this episode.
Actually big news out of crypto critics Corner, we have we've
created our own bridge on the cast, Coin Block Chain.
It is, it allows you to bridge likes.
Subscribes and reviews and ratings and all that stuff, but
you have obviously have to buy Cass, going to use the bridge.
So if you could go ahead by more cast coin, it's obviously not
available on any currency crypto, currency exchanges.
It is available on my personal decks, The Cask It's so go ahead
by some cast coin, wire us that money to my personal bank
account and see you guys soon.