As mentioned in the last installment, JPMorgan CEO Jamie Dimon referred to Bitcoin as a “decentralized Ponzi scheme.” Now we’re going to find out what he meant by that (Incidentally, Dimon was deposed in a couple of Jeffrey Epstein lawsuits this week; more info on what that might be about here).
We’re going to be building our understanding of Ponzi schemes as we go, but check out Wikipedia if you want to learn more. Because Ponzi schemes aren’t actually making investments with the money they’ve brought in (and are funneling money away), there is never enough money to pay back all the investors. When investors withdraw funds, they are paid back with some of the cash that was never invested.
Because of this, Ponzi schemes are always limited by the cash they have available: when that pile of money runs out, the scheme is over. If a Ponzi scheme has a publicly traded stock, this is the part where the stock price plummets and then the company goes under. For any Ponzi scheme to stay operating, it must keep bringing in more money.
Just as every other industry has grown dramatically with computers and the internet, the same is true for Ponzi schemes. Spreadsheets, advertisements, and training materials could be copied as they moved from one scheme to the next. Once they could make a website and take online payments, they could pull in victims from all over the world. As more things seemed possible, they could promise loftier things like deep sea adventures and trips to space.
But that was nothing compared to what they did with crypto.
--
Quick, what’s the first thing you notice when you look at that chart, even if you don’t read the title?
Is it those two years starting August 2018? This is a chart of historical Bitcoin daily volume: the number of Bitcoin moving through whichever exchanges and pools Investing.com pulled their data from.
That is an absolute firehose of volume; here’s how it compared to the average over the two years prior:
· That first day in August was 30 times higher.
· The average over the next two years was 10 times higher.
· That spike at the end was 165 times higher.
Does this mean somebody started buying 30 times more Bitcoin than the entire network of exchanges typically bought or sold in a day? Probably not, no. If that wildly unlikely scenario did occur, you would certainly see it reflected in Bitcoin’s price, which doesn’t correlate. Whatever this movement was, it wasn’t due to buying and selling on public exchanges.
Okay, now let’s see what the volume has done since. I’ve highlighted the first two-year spike so you can see it:
This spike was shorter: just 66 days. But if the first one was a firehose, this was a jet engine: 725 times larger on average, and 3,500 times larger at its peak.
--
I’ve mentioned Peter Thiel a few times now: he invested in Clinkle and went to Stanford, and his firm reportedly started last month’s run on Silicon Valley Bank. though he’s more well-known for things like co-founding PayPal, getting in early on Facebook, and bankrolling Hulk Hogan’s lawsuit against Gawker (to name a few).
In 2005, Thiel and two other Stanford grads/PayPal co-founders started a venture capital firm called Founders Fund, which has $11 billion in assets under management, with big stakes in companies like AirBnB, SpaceX, Stripe and Oscar Health.
It's tough to know the investment details of any VC firm: they get to keep things very private. But we can get some clues about Founders Fund’s cryptocurrency holdings over the years:
In March 2018, Thiel said he was “long Bitcoin, and neutral to skeptical of just about everything else.”
In 2022, TechCrunch interviewed two of the firm’s partners. They note that Founders Fund first bought Bitcoin in 2014 when it was a fraction of the price. They note that about two-thirds of their current crypto holdings are in Bitcoin and the rest are in the crypto industry more broadly.
They say the partner who leads their cryptocurrency investments is Napoleon Ta. Ta joined the firm in 2012, shortly after getting his MBA at Stanford. As Forbes notes in their 2018 Midas List, “Napoleon has been instrumental in developing Founders Fund’s cryptocurrency thesis, which led to the firm’s investment in bitcoin.”
A month later, Thiel was the keynote speaker at Bitcoin Miami, where he said the Bitcoin price would likely go up by a factor of 100, and would have a market cap equal to all global equities combined (Ponzi schemers often sound like this, by the way: You promise unbelievable returns because you really don’t want people to withdraw their money).
If we start digging into their crypto investments, we see the first significant move was in 2014 when they backed a unique pair of firms:
MetaStable and Polychain
This article from 2017 introduces both well. MetaStable Capital is one of the oldest investment funds in crypto: they invest “directly in digital currencies” and aim to make “at least decade-long bets.”
In the words of co-founder Josh Seims, “There's… between five and 10 of these major use cases that could be trillion-dollar blockchains.” AngelList founder Naval Ravikant also co-founded MetaStable. The minimum investment they accept is $1 million. They made over 500% return on their investment in their first three years.
Polychain Capital was founded by Olaf Carlson-Wee: He was the first ever employee of crypto exchange Coinbase in 2013 and has graced the cover of Forbes. While MetaStable invests in coins directly, Polychain “specializes in investing in other blockchain companies.”
These two companies have many connections, but the clearest is in their investors. Along with investments from Founders Fund, both firms have two other major backers who will stick around this story:
Andreessen Horowitz: They started with $300 million in 2009 and have grown to over $28 billion in assets (nearly 3 times the size of Founders Fund). Co-founder Marc Andreessen was an early investor in Facebook, getting a seat on the board in 2008 where he has sat alongside Thiel ever since.
Sequoia Capital: They’ve got an eye-popping $85 billion in assets under management, having made early investments in Apple and Google, among many others.
Similar to Clinkle, it may not say much if one of these funds invests in a company. But when several of the biggest, most well-known tech VCs invest in a pair of companies, it can signal an industry-wide push in that direction.
I dug through Polychain’s various funds to learn more about these companies. Their three “Ecosystem” funds are where they’re investing in specific new crypto technologies – Googling each provides more information.
First, a quick crypto lesson: Blockchains are distributed ledgers that list all the transactions on that chain. They’re a real mathematical and digital thing that was first created for Bitcoin in 2008 in an anonymous white paper. These technologies are kind of like that: Infrastructural and mathematical developments that allow new things within the digital space.
Polkadot allows seamless, secure transactions across blockchains, including between public and private blockchains, explained in great detail here.The writer explains the need for Polkadot with an apt analogy: “Think of different banks, for example, that were not allowed to interact — we would not be able to transfer money smoothly from one bank to another.” Polkadot is like a being able to transfer cryptocurrency from a public blockchain to one you don’t know exists.
CELO provides anonymous mobile phone cryptocurrency transactions using zero-knowledge proofs, an impressive feat of mathematics where a transaction can be confirmed without providing any information about the parties or the transaction.
Dfinity is all about increasing the speed and volume of blockchain transactions: “efficiency that is many orders of magnitude improved…to scale without bound” (emphasis mine).
If Polychain could get all three of these developed, new things would be possible. With Polkadot and CELO, they could hide the movement of virtually any cryptocurrency from anywhere in the world. With Dfinity, they could shuttle these coins all over the world with unprecedented speed and volume.
Remember in our Ponzi scheme lesson above how they’re limited by the liquidity they have available? If someone had established multiple exchanges on opposite sides of the planet (just like Summer Highlands Ltd. attempted to do in part 2), they would now have the tools to create a shared liquidity pool that all parties could secretly tap into, lying to their customers about the investments they’re not making. So investors see their bitcoin listed in their account, but it’s bogus: there isn’t enough bitcoin to cover everybody’s investments; just a dark pool for all the co-conspirators to pull from.
So what were those massive spikes of volume we saw at the top, exactly? That appears to be the decentralized Ponzi scheme in action, moving massive amounts of Bitcoin around the planet.
--
There’s a lot more to this story after Polychain (and a lot more evidence around this decentralized Ponzi scheme), but let’s just add a couple data points that may support the theory for now so we can take a nice break from the crypto weeds.
If you dig through a VC firm’s SEC filings, you often don’t have much to go off: They basically just say “We sold some unregistered securities for X dollars”. But a few things stand out about the filing for Founders Fund’s Founders Growth II, LP:
While almost all of the company’s filings list the co-founders, this is the only fund that includes Napoleon Ta, the long-time partner who led their crypto strategy, as a director. This means Ta played a very active role, and it would suggest this fund is related to crypto.
The fund sold $3.4 billion worth of investments; this is the company’s largest reported sale by far.
The sale was filed with the SEC on March 4, 2022. This was the same exact day that the Bitcoin volume suddenly shot up over 1,500 times the typical average.
This was also the day that two Founders Fund partners gave the TechCrunch interview where they revealed more about their cryptocurrency investments than they ever had. With our three March 4th data points, it looks like Founders Fund funneled $3.4 billion of assets into the dark pool and then took the rare interview to pump cryptocurrency. Do I know this is the case? No. Would it explain all of the above? Absolutely.
--
In 2018, Metastable was acquired by a firm called Dragonfly, which was looking to “help crypto startups bridge China and Silicon Valley,” according to the Forbes headline. “Having a fund that can toe the line between the two hemispheres is a powerful advantage,” says a MetaStable general partner.
Dragonfly’s investors included Marc Andreessen; Sequoia China; Polychain’s Olaf Carlson-Wee; and Founders Fund partner Cyan Banister.
--
Next time: Why did the Metaverse look like a Ponzi scheme?
_________
You’re likely wondering where all this is going, so I will tell you.
Just because I uncovered these things in slow dribs and drabs doesn’t mean you need to, so let’s shine some light on this rabbit hole.
If you stick around, you won’t get concrete proof: there is no smoking gun, no four-part interview where the masterminds of this scheme explained everything out of hubris. Our evidence will often be circumstantial, and it will take many forms.
Explaining why will take a while, but this is what I believe. This is the only framework I found that made sense of what I’ve seen, and I am confident that I can convince you of the same:
- Several famous household names have built their careers off of Ponzi schemes, going back at least to the 1980s.
- They saw the potential for decentralized networks and digital currency as future technological advances that would allow them to replicate and grow their schemes in new ways.
- As the internet blossomed, replication was possible on an entirely new level. Extremely successful, extremely well-known tech companies were established in explicit support of this new network of Ponzi schemes through digital currency expansion, data harvesting, and the monopolization of online communication networks. Schemes that used to be the stuff of seedy families out of Dallas could now be reproduced around the world.
- Multiple universities served as research hubs in direct service of these schemes, developing real and fake technology for them, but also crafting PR strategies and developing legal arguments around banking and patents to support them.
- This international group of Ponzi schemers created Bitcoin with the express purpose of stealing money from investors. They developed three specific new technologies in the crypto space that allowed them to steal cryptocurrency assets, hide their digital footprints, and build a high-frequency trading network so they could shuttle those assets around the world in a dark global, liquidity pool. Jamie Dimon summed it up nicely when he called Bitcoin a “decentralized Ponzi scheme.”
- The replication of this scheme and investment in it has grown dramatically in the years this scheme has unfolded.
- Some well-known university and foundation global investment initiatives are poorly-hidden international money laundering fronts in service of this scheme.
- The entire cottage industry of “effective altruism” was created to justify the massive amounts of wealth that moves through these money laundering fronts, and to challenge any ethical qualms that the scheme’s growing list of investors had about it.
- The collective theft has been so large that it has literally caused global inflation, as countless people spend more than they have, unaware that the three trillion dollars they’ve invested in Ponzi schemes has already been stolen from them.
- Reputable media establishments have been purchased or created in order to shape public understanding to the scheme’s benefit. This is most obvious with Binance’s acquisition of Forbes, but extends well beyond it.
- The scheme has made notable inroads into our political systems, with co-conspirators in various parliaments, senates and executive offices. The role of two co-conspirators in particular raises serious questions about a U.S. Presidential election, (and I’m not talking about crypto titan mega-donors Sam Bankman-Fried and Peter Thiel).
- The run on Silicon Valley Bank was intentional and years in the making, conducted by several powerful VC firms who had been investing in the cryptocurrency scheme since the beginning. The scheme’s media tentacles had long positioned Bitcoin as a stable asset in tough economic times in service of this, which helped cause its dramatic rise following the bank run, discouraging victims from withdrawing funds and attracting more. The bank run also gave the schemers $2 billion through the movement of customers from Rippling to Brex, which was established for this purpose.
- They did this knowing that one of their major fraudulent liquidity pools, Silvergate Bank, would go insolvent, as all Ponzi schemes do, hence the timing. There was a sudden resignation in service of this part of the scheme.
- Signature Bank, Credit Suisse and Bear Stearns all collapsed for similar reasons as Silvergate: all serving as slush funds for this growing network of Ponzi schemes.
- Critical to keeping the growing scheme from being exposed was a child sex blackmail network, developed and perfected by Jeffrey Epstein, just as he was trained to do at the Dalton School. This network lives on in his absence, in part through documents hidden on snooker websites.
I’ve painted this as a wretched and villainous affair so far. It certainly is, but there is another lens worth viewing it through:
This is the story of a bunch of prep school kids and nepo babies who realized they could play god a long time ago, blackmailing each other into complicity while they did crimes and stole money for decades, and then just kept on doing it until they stole trillions of dollars and crippled the world economy. Not the best endgame strategy: You might think the tech billionaires have cryogenic freezing technology and bunkers on Mars coming, but those are mostly just Ponzi schemes too, it turns out. This is the stupidest criminal enterprise in human history.
They invested billions and billions of dollars, leveraging some of the world’s most powerful research institutions, writing new laws, building machinery around the world. They funneled the country’s smartest rich kids right into it, for nothing, for a sham, for an old-timey grift; all so they could be VIPs at Coachella and dick around on yachts.
They destroyed newspapers, sabotaged education systems and invented conspiracy theories so we wouldn’t find out their whole careers were frauds and maybe they sexually abused some children. It’s Anna Delvey becoming hundreds of the most important people on the planet. It’s a goddamn Vonnegut novel.
So. Back to the rabbit hole?
--
We’ll learn quite a bit more about Ponzi schemes in the future, but for now we’ll cover the very basics: In a Ponzi scheme, the scammer raises money from investors by telling them about some investment, but they don’t actually invest it in that thing; they just pocket the money instead.
Here’s a standard example, it turns out: I’ve got some drilling rights on land in West Texas you’ll never see, but I tell you all about the fancy mapping software we’re using and the trustworthy businessmen saying the industry is booming and you give me some money. I might stage some drilling, or do just enough to make the operation seem believable, but the majority of the work never happens, your money gets funneled elsewhere, and one day the penny stock you bought into goes to zero.
Now that that’s out of the way, here’s a bunch of stuff you probably didn’t know about famous billionaire Richard Branson, the most public investor in that fraudulent-looking company Clinkle.
If you don’t know Branson at all, you’ll get a fair introduction in this 1998 interview on Conan in which he appears to immediately sexually assault Salma Hayek; makes her give him a massage; repeatedly grabs her; jokes about having sex with her on his airplanes and throwing her out of a hot air balloon; and make all parties deeply uncomfortable. At best he’s an absolute creep. (This is the only Branson interview I’ve watched, but I suspect he tips his hand as a monster in many of them)
He gets an extra cheeky grin when he talks about how his international modeling agency (which he calls “Virgin Girls”) famously recruited Kate Moss in an airport when she was 14 years old.
He was a known associate of Jeffrey Epstein, showing up in his little black book.
The cult NXIVM hosted multiple events on his private Caribbean island.
His various corporate and personal holdings mainly exist in Caribbean shell companies.
In 1971, he was convicted of tax evasion. He had developed a scheme to avoid paying British taxes on his record sales by first taking them across the border and then sneaking them back to sell domestically.
While his Virgin Group conglomerate is best known for airlines, music and space travel (and cell phones and credit cards and…), he’s had more than a few suspicious business ventures:
- Virgin Orbit promised space tourism, being valued at over $3.7 billion. The rockets made six flights over three years (four of them successful), before laying off 85% of their staff and suspending operations two weeks ago. Ponzi schemes sound like this.
- Virgin Nigeria was a joint venture between Virgin Group and Nigerian investors. Five years after forming, they suspended all flights to London and Johannesburg (both popular flights out of Nigeria, one would assume). Virgin said they were looking to sell, and took “Virgin” off the name, but kept their 49% stake. In 2012, they fired all their staff “for being disloyal” and ceased all local, regional and international operations. Ponzi schemes sound like this.
- Branson predicted Virgin Cars would sell 24,000 cars in its first year, but it only sold half that three years later. Two years after that, it ceased all operations. Ponzi schemes sound like this.
- Virgin Hyperloop raised $400 million to develop vacuum trains. Last year, they abandoned plans for human rated travel and fired half their workforce. Ponzi schemes sound like this.
- Virgin Oceanic was billed is an undersea leisure adventure to the deepest part of the ocean. This service never came to fruition and the project was put on hold indefinitely. Ponzi schemes sound like this.
- Virgin Cola suffered some wild misfortune when a Coca-Cola executive assembled SWAT teams to fly to the UK with briefcases full of money to pay retailers to get Virgin Cola off the shelves. This Coke executive later became the manager of Virgin Group’s bank accounts. This sounds like they intentionally tanked their own company, which is something Ponzi schemes often do to justify the disappearance of funds.
- Virgin Vie was a makeup company that employed over 7,000 consultants, and received an Innovation and Excellence award Direct Selling Association. Ten million dollars of Virgin Vie’s revenue went right back to Virgin Group to take “Virgin” off the name. They discontinued several lines, liquidated, and owed over £5 million that most creditors would not receive. This one’s a switcheroo: pyramid schemes sound like this.
- Virgin Atlantic invested over £135 million in Virgin Connect though the website offered little more than an FAQ about future plans. In 2020, they ceased all operation. Money laundering fronts sound like this. Clinkle sounds like this too.
- Virgin Money Australia was a credit card that partnered with WestPac bank. Bob Joss, the Stanford professor who wrote the highly suspicious offshore banking case study, was the CEO of WestPac at the time. This may have brought Branson and Joss together pre-Clinkle.
Note that this is just from browsing Wikipedia and is what immediately struck me as worth noting; it is likely that other Virgin tentacles sound like Ponzi schemes or other criminal enterprise as well. I do wonder, for instance, why an unethical man who owns massive international shipping concerns would take such a strong interest in leniency for a heroin trafficker in Singapore.
--
Now that we’ve spent some time in facts, would you indulge me on something a bit more speculative?
I wouldn’t dare suggest the architects of this scheme actually did reveal everything in an interview written in code out of unbelievable hubris, hidden on a website owned by a co-conspirator. That’s a bit too fanciful, even for this story.
Secret codes are a recipe for confirmation bias: sure, I could say that snooker means blackmail and poker means Ponzi scheme and Beevers means Branson, but why couldn’t I say snooker means money laundering and poker means The Kingdom of Saudi Arabia and Beevers means Josh Kushner, you know?
Still, part one’s snooker child protection policy was super weird, and this rabbit hole has taken me to some very strange places.
With that in mind, could you Google “The Unabridged Story of the Hendon Mob” and save all four parts? If reality lines up with this theory at its strangest, I suspect it won’t be available much longer.
__________
In part one, we learned about Clinkle: a mysterious start-up out of Stanford that brought in record funding before it all went up in smoke. While most of the investors were major players in the tech and venture capital worlds, the lead investor was the mysterious “Summer@Highland”.
If you pop over to EDGAR, the SEC’s filing search tool, and type in Summer@Highland, the only hit you’ll get is for Summer Highlands Ltd. Let’s have a look at their Registration Form, submitted by President Jeremy Mork, in August 2010 to see if there’s any connection.
They’re a new public shell corporation in the British Virgin Islands, looking to seek a merger or acquisition. This type of company wouldn’t have to file much with the SEC, but they would need to register and explain the purposes of the corporation, which is what this document is.
We’ll dig in shortly, but first we need to talk about the school that keeps showing up like a bad penny.
--
You’ve likely heard of two of the biggest frauds in recent history: Elizabeth Holmes’ Theranos and Sam Bankman-Fried’s FTX. Though the companies sound different (high tech medicine and cryptocurrency), they were variations on the same con: investors are lured in with promises of complex technology with big returns, but the scammers just pocket the money instead. These were both, in effect, Ponzi schemes.
And wouldn’t you know it, they both have roots at Stanford University, just like Clinkle. Holmes founded Theranos when she was a 19-year-old Stanford student, before dropping out and leasing her headquarters at Stanford Research Park. Bankman-Fried was literally born on Stanford’s campus; his parents Joseph Bankman and Linda Fried both decades-long tenured faculty at Stanford Law School.
Remember Clinkle investor Peter Thiel? He speaks quite highly of Professor Bankman from his Stanford days. It was Bankman, after all, who told him about the tax loophole that allowed him to stash his multi-billion-dollar Facebook and PayPal stakes in Roth IRAs.
Meanwhile, among the names that backed Clinkle with big investments were multiple Stanford faculty and even StartX, a Stanford startup fund that has done WAY more investing since then. One of those professors was CEO of one of Australia’s largest banks and Stanford Business School Dean Emeritus, Bob Joss, who has no known investments besides Clinkle.
If you check his faculty page, you will see several degrees, several powerful positions, several prestigious awards, several blog posts, and one case study written months after the Summer Highlands registration with the SEC: “Westpac, Offshore Bank Accounts in the Cook Islands.”
You can read the summary, but you’d need to fork over 9 bucks if you want to read the whole thing, as I won’t be sharing my copy (I will call truth to power, but I will not run afoul of Stanford’s terms of service), but I will summarize its contents.
It’s a fictional scenario offered to students, presumably: You’re a bank manager in the Cook Islands who’s been overseeing a whole bunch of offshore banks that have been highly profitable. The banks operate in multiple currencies with limited regulation and visibility: The dealings of the bank are hidden behind anonymous trust companies and the customers’ identities are unknown.
But people are clamoring about “know your customer” and the bank wants more transparency. But you know what the bank is doing is legal and profitable. You also know the bank could risk more liability if it peeled back the onion on who its investors were; even the act of inquiring about the customers could raise alarm bells.
The case study offers discussion questions as follows, quoted in full:
1. Is there any ethical issue here?
2. If you vote “yes,” what is it and what should you do about it?
3. If you vote “no,” why not, and what are the possible consequences going forward?
Now some questions for you, dear reader: Is this case study secretly trying to recruit co-conspirators who will have no ethical qualms with an international offshore banking scheme? If you vote “no”, then why does it read exactly like that?
--
Now that we’ve learned a bit about multicurrency offshore banking schemes from one of Clinkle’s investors, let’s dig into that Summer Highlands SEC Filing.
It’s a real slog, but the gist is this: They are a shell corporation (which means they exist to acquire or merge with other corporations) and will be offering a penny stock. They repeatedly stress that they will not be acquiring a specific company, though it will probably be a Chinese company. They will raise money from investors in a “blind pool”, where they (Management) will have virtually unlimited discretion in their business opportunity.
They will likely only endeavor in one business venture, they note. Okay, what venture is that?
“In some instances, a business opportunity may involve the acquisition or merger with a corporation which does not need substantial additional cash but which desires to establish a public trading market for its common stock” (emphasis mine).
That’s unusual, to say the least. It doesn’t say “get listed on a public trading market”, or “establish a public trading market presence.” It was just run of the mill shell corporation stuff until now, but this says they may create a stock market for whatever this stock of theirs (and their acquisition companies) is, and they’ll do it inside this Caribbean shell company. Huh.
They explain that it will be critical to not trigger taxable events, which they would have to tell the SEC about, and so the acquisition company will hold a bunch of the shell company’s stock as a tax loophole (yes, they really explain all of this). Because of this, their investors will lose a whole bunch of their stakes when the shares get diluted, which might make you wonder why those investors would participate.
They do note potential risks of investing in a Chinese company, such as the fact that China could restrict funds at their discretion.
What is all this? I’ll explain further why, but this appears to be the seeds of both Binance and FTX, a dual international cryptocurrency exchange designed to be hidden from regulators, and it happened all the way back in 2010.
If you don’t know much about crypto, know that this would be quite a revelation. Binance is the largest active cryptocurrency exchange in the world, founded in China, and FTX was the second largest until they were revealed to be a Ponzi scheme last November. Moreover, this would upend the entire established timeline and narrative of cryptocurrency and some of its biggest players.
It was recently reported that FTX president Sam Bankman-Fried paid a $40 million bribe to Chinese officials because they had frozen his assets at their discretion, just as the Summer Highlands filing warned.
As noted in a recent episode of TrueAnon (starting at minute 35), the two exchanges have strong, somewhat inexplicable ties to each other, like each exchange holding a substantial amount of the other’s assets. If we reframe that in the context of this sketchy SEC filing, well now it makes sense: Holding each other’s assets was part of a tax loophole that allowed them to keep their operation unregulated.
To be clear, I’m don’t think Summer Highlands literally became FTX or Binance; it’s just one of many short lived BVI shell companies filed around the same time by this Jeremy Mork fellow. But we’ve seen a lot of weird stuff so far and it’s suggested some pretty wild things, so let’s take this as a working theory and see if we find facts down the road that contest it:
The strange unregulated multi-currency offshore banking operation of Summer Highlands Ltd. appears to be related to Summer@Highland, the unknown lead investor of Clinkle, shown not just through their names but through their connections to Stanford University and the work of Robert Joss. Summer Highlands was built to create an unregulated and multinational trading market, which likely developed into the dual exchanges Binance and FTX. Clinkle, with its famous billionaire investors, appears to be a front to funnel money into this operation.
Up Next in Part III: How doomed is our economy? Let’s ask the crypto shills.
__________
Remember that string of bank failures a month ago? I think we got snookered.
After the bank run that led to the collapse of Silicon Valley Bank, I started pulling at a thread: What if the narrative we were given, that these were issues with regional banking and rising interest rates, wasn’t accurate?
What if the parties that first told their customers to pull out of SVB wanted to cause a bank run in order to cause the bank’s collapse?
There are a handful of powerful tech venture capital firms that had the means and opportunity: If they told customers to pull out of the most popular tech VC bank, they could count on word getting out and the smaller VC firms following their lead, leading to the sudden withdrawal of billions of dollars from the bank. But what would possibly be the motive for such a villainous crime?
Little did I know, this thread that started last month in Silicon Valley would take me back decades and across continents as I chased the digital paper trail of hedge funds and shell corporations around the globe.
It would reveal a perfect storm of criminal activity with an unimaginable number of well-known co-conspirators, from titans of industry to technological whiz-kids; sovereign wealth funds to internet troll farms; esteemed universities to media moguls; heads of state to award-winning reality TV shows; global NGOs to poker websites.
It would cast entire industries in a wretched new light, fraudulent since their inception. It would reveal global dark pools of billions of dollars in stolen wealth, concerted media campaigns, and international money laundering networks hidden behind non-profit statuses.
As I pored through interviews, SEC filings, Forbes Midas Lists, and law school case studies, I found myself wishing for a cork board and some string to help make sense of it all. You would do well to question my sanity, just as I have. As one helpful Quora user writes, “When the reality consistently tells you that it does not work in accordance with your understanding of how the universe is supposed to be, take note.”
This has served as a guiding light for me for the last month: While I didn’t want to believe the things I found, the more things sounded like a bad spy thriller, the more our world made sense, from curious donations, public statements, media acquisitions, suspicious travel companions and high-profile resignations to increased surveillance, soaring inequality and inflation, angry political tribalism, the continual erosion of civic institutions and the unprecedented collapse of four banks in quick succession.
The parallels to QAnon can’t be helped (and will be discussed further in a later entry), but I’ve found no evidence of adrenochrome or demonic ritual. Rather, these international criminal billionaires appear to have much more mundane motives: money, power, and control. As it turns out, they’ve gotten far too much of all three.
But I don’t want you to take my word for it. Join me as we follow these threads together, uncover the artifacts that lurk below the surface of the internet, and paint a truthful picture of what we see, no matter the rot it shows us.
We will find things that seem curious and suspicious on their own, and then we will follow the connections that run between them, revealing the largest theft in human history, not yet noticed or prosecuted, that has only grown in scale and power right before our eyes
--
Back in 2013, a mobile payments company called Clinkle got some major buzz: The start-up out of Stanford had just raised $25 million in the largest seed funding round in Silicon Valley history.
And they had some REALLY big names attached, each chipping in a million bucks or so. Among them were a bunch of tech venture capital firms like Andreessen Horowitz, Intel Capital, and early Facebook investor Accel Partners, but also Intuit (accounting software) and later Virgin Group (Richard Branson’s empire’s investment arm)
But there were also an unusual number of individuals (as opposed to companies). On the tech side, there was venture capitalist Peter Thiel, Salesforce CEO Mark Benioff, and a VMware co-founder couple. But there was also Rockefeller family advisor Peter Crisp; former U.S. Ambassador to Switzerland Dick Fredericks; Ross Perot Jr.; and Stanford Professor Emeritus Bob Joss.
The lead investor, though, is much less well-known: a start-up accelerator called Summer@Highland; apparently a summer program from Highland Capital Partners out of Boston and the Bay Area. Since Google has trouble with the “@” symbol, searching the name yields a whole lot of Billy Joel – Summer, Highland Falls. Now either these tech VCs are no good at search engine optimization, or they wanted to keep this hidden…
Meanwhile, Clinkle doesn’t say much about what their technology is or why it was able to attract such record-breaking investment. Eventually, they say they’ll build an app that uses high-frequency sound to send payments, but they don’t even come close (obviously).
In 2015, seven employees quit due to apparent frustration with CEO Lucas Duplan. As Forbes reported, they had layoffs in 2014, and the departure of several high-profile executives. By 2016, it was clear that Clinkle was going nowhere: photos were leaked of Richard Branson and Duplan setting fake $100 bills on fire back in 2013, and some unnamed investors wanted their money back.
What happened here? Was this a fraud from the start? Did Clinkle just bilk all these investors and run off with the money? Why did such a diverse group of powerful people invest in a mobile payments app in the first place?
We’ll get some big answers to these questions in Part II, but for now, let’s surface something from deep, deep in the rabbit hole: one of the most important and vile documents in modern world history, hidden on a public snooker website.
--
I warn you that it will not take long for you to understand the purpose of this document. The subject matter (child abuse) will repulse you, but it may pale in comparison to the existential dread that will creep in, growing larger with each question you ask. If you continue, your own understanding of the world my change forever.
If you browse the website of the World Professional Billiards and Snooker Association, you may come across their page on Child Protection Policies. It sounds reassuring at a glance: Proper vetting and background checks are being done on children’s snooker coaches.
But if you open the linked PDF, you may begin to wonder why a snooker website has devoted 36 pages to this. If you skim the document, you may find certain passages unsettling:
In Section 3, they offer a long list of actions and behaviors that people should take to avoid the appearance of child abuse. For instance, they note that players should “maintain a safe and appropriate distance with players (eg it is not appropriate for Personnel to have an intimate relationship with a child…)”(6).
Section 4 outlines detailed descriptions of various types of child abuse, along with actions that World Snooker is prepared to take, such as “insist[ing] bullies compensate victims” (10).
Section 5 notes that the first contact that should be made if child abuse is suspected is with the World Snooker Child Protection Officer, not police, EMS or child services. This priority is reflected in two flow charts on how to handle child abuse (16, 19). It is further clarified that contact with police, social services, or with the victim’s parents is “on a 'need to know basis' only” (20).
The document includes pages of discussion around photographs, noting that photos of children can help provide personal information that can be used for grooming them for abuse (8), and that some people take inappropriate photos of children in vulnerable positions at snooker events (28).
Section 7 notes that disabled children are often easily manipulated and may not recognize inappropriate adult behavior, making them more vulnerable to abuse.
As you may have gathered by now, this document is not about snooker, and was not written to promote child safety. Rather, this appears to be an instruction manual on how to blackmail someone by gathering evidence that they abused a child.
It tells the blackmailer how to best identify children most vulnerable to abuse; how to behave in the presence of these children to separate themselves from abuse allegations; how to identify and collect damning evidence of abuse against the blackmail victim; how to confront the abuser without involving the police; and how to leverage the situation to extract money or resources from the abuser.
And it suggests the existence of countless participants in a network of blackmail and child abuse, one with an organizing body and repeatable rules where members are recruited and vetted, and a decentralized online presence.
Of course, that couldn’t be the case, right? Our world has problems, but a vast blackmail network? That doesn’t align with reality. It must be a hoax or a misinterpretation.
Still, you might find yourself unsettled by the questions you start to ask: Why does this document appear to provide blackmail instructions? What’s going on with this snooker organization? And how in the world did researching the bank run lead to this?
Next on Part II: Summer Highlands, criminal recruitment tools, and the birth of FTX.
__________
This is The Ponzi Papers.
__________
