This week, as the UK swelters through a heatwave, I picked up a sickness bug. Not recommended on any level, and I mean any, but it did give me little other option than to quietly read something. I went with a title I'd been meaning to get around to since July - Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud by Jacob Silverman, a freelance tech and crypto journalist based in Brooklyn, and Ben McKenzie, the blond guy from The O.C. (aka the one that didn't have Chad Michael Murray).
I jest but that's kind of the angle Easy Money very successfully hinges on, being written first person from McKenzie's point of view. Here's a bloke who goes in relatively clueless, becomes concerned by what he finds, and takes the reader on a journey through the smoke and mirrors that make up the crypto world.
On Twitter (fine, 'X') I dashed off a quick overview: while, obvs, heavily US focused it's an incredibly *accessible* delve into the sometimes seemingly impenetrable world of cryptobollocks. More than that it's a spotlight on the frankly dangerous economic illiteracy of this govt. Sunak has always been a crypto evangelist, claiming he'll turn the UK into the global cryptohub and, despite the crash, is still pushing to make stablecoins legal tender...
It stayed on my mind though, particularly the links between crypto, Brexit, and all the usual characters who go along with that - the Tory Party, the anti-woke brigade, the Tufton Street climate change deniers, etc. So here are some expanded thoughts on the book itself and some of the influences behind contemporary UK policy making.
Regular readers (poor souls) will know I do a lot of work on referral/affiliate programmes and the kind of hybrid MLMs that exist alongside them. So crypto, or perhaps more accurately, crypto marketing has been on my radar for a long time but never really proved itself as a serious contender for further exploration. Crypto remains largely separate to the referral world for the same reasons regular stock trading and even matched betting have made so little crossover: the innate reluctance of the cheapskate to speculate. As the nation's favourite financial guru, Martin Lewis, has said on the subject:
Technically, it's arguable whether Bitcoin is investing or just speculation – as investing usually includes the chance to generate income or accumulate, while speculation is a straight bet on the price of something. Yet that's splitting hairs, either way it is a big risk. There's no protection with Bitcoin, there's no guarantee it will be worth money. ... The Financial Conduct Authority, has issued a warning saying that investing in cryptoassets, such as Bitcoin, or investments and lending linked to them, generally involves taking very high risks and that you "should be prepared to lose all your money."
Like all gambling it boils down to that old maxim: don't bet more than you can afford to lose. And, frankly, after over a decade of Tory misrule I couldn't afford to lose anything.
What Easy Money does exceptionally well, then, is ground you in some basic economics, introduce you to the wider world of crypto, and guide you through the jargon and the technical explanations, some of the key players and how they're connected to each other. Where it's experiencing backlash is in claims that crypto is essentially a giant ponzi scheme. The thing is, maybe in its pure, idealistic form, it really does have merit. The way it is actually operating relies entirely on money being funnelled in by the many for the benefit of the few. In other words, Crypto Bros are so keen for you to buy into the latest scheme for the same reason Instagram affiliate marketers are so keen for you to pay for their super secret marketing tutorials. It's going to benefit them.
Here in the UK, Andrew Bailey, governor of the independent Bank of England - a bastion of what Liz Truss would term 'the left wing economic establishment' - has called cryptocurrencies "the new front line" for criminal scams and has warned that they have "no intrinsic value." In a union supposedly so well served by 'good British common sense' you would think the government would be advising its citizens to steer well clear.
In fact Sunak has repeatedly stated his aim is to make the UK the global hub of crypto. In support of this, back when Sunak was Chancellor, the Treasury tasked the Royal Mint with creating its own NFT for a summer 2022 release. This went as successfully as any other UK government tech project and was quietly scrapped in March.
On the hub front, against the advice of the Financial Conduct Authority and in spite of last year's spectacular crashes, the government is pushing ahead. Easy Money explores what happened in El Salvador when crypto was made legal currency. Suffice to say, it wasn't pretty. Back in London, the Treasury said "the government will introduce this legislation as part of an ambition to deliver a world-leading regulatory regime for stablecoins." This year the government reaffirmed its commitment to this, amending the existing Financial Services and Markets Act 2000 (FSMA) to "mitigate the most significant risks" of crypto technologies, while "harnessing their advantages."
Basically, while the EU is moving forward with its comprehensive MiCA legislation, the UK will be regulating some stablecoins as forms of payment and in future plans to licence crypto firms with minimum capital and liquidity requirements. Back in the present, Sunak claimed he was 'thrilled' to welcome a16z (Andreessen Horowitz) to the UK a few weeks ago, where they intend to launch a Crypto Startup School next year. Sinead O’Sullivan at the Financial Times was somewhat less enthusiastic:
With El Salvador having officially signalled a Game Over for crypto the day that its HODLer president, Nayib Bukele, removed bitcoin from his Twitter profile along with his laser eyes profile picture, a16z needed to scrape the barrel. They settled on one of the few remaining non-regulated crypto geographies in the modern world of business and finance:Singapore-upon-Thamesthe United Kingdom. And the timing actually works quite well here. Because just as the pesky SEC cracks down on crypto across the pond, the UK has managed to get rid of its own pesky regulatory overlords in the European Union (or, so we’re told) and pick (ok not really pick) a wannabe crypto bro, Rishi Sunak, as prime minister.
So how did we get here? Like so many problems in the Sunlit Uplands, we can trace this push for crypto back to Brexit. Outside of the strange enclave of #BringBackBoris fanatics I no longer think it much disputed that the chief objectives of the Brexit project by its shady financiers were twofold: 1. to destabalise Europe, and 2. the deregulation of the financial sector.
(The former was largely a failure; watching the self-inflicted stupidity of Brexit has raised approval ratings for the EU all across the continent although, in the boasting words of Russia's then ambassador to the UK, "We have crushed the British to the ground. They are on their knees, and they will not rise for a very long time." The latter, remember, was at least temporarily thwarted by the meddling left wing economic establishment during Truss's embarrassingly short premiership. Not before hiking up mortgage rates, of course - if you haven't one of your own I'm sure your friendly neighbourhood landlord has been only too happy to pass the cost onto you. Still, the 'bonfire of rights' due this December will wipe some 800 statutes off the books, put hundreds if not thousands under review, and promises to pave the way for greater deregulation across the board.)
Easy Money touches only briefly on crypto's influence in the UK, yet it manages to say a hell of a lot in just a very few lines:
Christopher Harborne - aka Chakrit Sakunkrit - was one of the biggest donors behind the entire Brexit movement; the New Statesman reported back in January how that money enabled the Leave campaign to spend freely in the run up to the referendum. In February 2022, shortly before the Treasury outlined its plans to turn the UK into that global crypto-hub, Harborne donated £500,000 to the Conservative Party.
Tulip Siddiq MP, Labour’s shadow economic secretary, described the donation as "a shocking revelation. Instead of protecting the public by properly regulating the crypto market, it appears the Conservatives have been looking after the interests of their wealthy donors. This Government’s Wild West approach to crypto has threatened the security of people's savings, and crypto-related crime such as fraud and money laundering has hit record levels." Naturally the government responded with the tried and tested: "Government policy is in no way influenced by Party donations – they are entirely separate."
After disgraced former Prime Minister Boris Johnson was finally (finally) removed from office last year, Harborne donated £1 million to him, the largest single donation ever made to a British MP. Coincidentally this donation came in just around the same time as it was announced Johnson would be delivering the keynote speech at the International Symposium on Blockchain Advancements in Singapore.
And I'm not saying that crypto is Harborne's only political interest. Harborne is also the biggest single shareholder at QinetiQ, for instance, a company that secured a MOD contract worth £80 million earlier this year. In addition Harborne is Chief Exec of Sheriff Global Group (dealing in private planes) and owner of AML Global (seller of aviation fuel), through which he paid £2000 for vocal climate change sceptic Steve Baker MP to attend last year's Tory summer ball according to DeSmog.
It's just a real small world when it comes to lobbying for some interests. ¯\_(ツ)_/¯
The Tories aren't the only ones raking in the benefits of crypto. Nigel Farage has long been shilling the bit, claiming: "They cannot tell me what I can and cannot do with bitcoin and, in that sense, it is the ultimate freedom, it is the ultimate liberty." Though, as you'll recall from the recent 24/7 coverage of Nigel's 'debanking' at the cruel hands of Coutts, an exclusive bank for customers with at least a million in their accounts, even Farage cannot survive on bitcoin alone. The fallout of his crusade for justice saw the resignation of the CEOs of both Coutts and NatWest and promises by the government of a huge crackdown on denial of services by banks. It will be interesting to see whether the NatWest group's own crackdown on crypto transfers survives this overhaul...
Away from the media spotlight, the webs of influence can be more difficult to follow. There are the donations we know about, and then there are all the donations we don't. Byline Times (a hard left blog in the words of the infamous Dan Wootton) has been banging the drum for years about the UK's think-tank problem. That's without the cronyism and the corruption and the breakdown of public trust in our democratic institutions.
Because for all Easy Money focuses on the individual impact of cryptocurrency, the private tragedies of those who have lost everything, and the showy personas of those who claim to have gained it all, you can't help but think about the bigger picture. The supposedly noble purpose behind the basic idea - decentralised money that was private, free from any surveillance or control by the state - and the actual realities of such a system.
In 1997 James Dale Davidson and William Rees-Mogg (father of Jacob) co-authored The Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State, prophesying on the collapse of the nation state in response to an inability to collect taxes from funds held in cyberspace created "by mathematical algorithms that have no physical existence."
"Cyberspace is the ultimate offshore jurisdiction. An economy with no taxes. Bermuda in the sky with diamonds. When this greatest tax haven of them all is fully open for business, all funds will essentially be offshore funds at the discretion of their owner. The state has grown used to treating its taxpayers as a farmer treats his cows, keeping them in a field to be milked. Soon, the cows will have wings. Like an angry farmer, the state will no doubt take desperate measures at first to tether and hobble its escaping herd. It will employ covert and even violent means to restrict access to liberating technologies. Such expedients will work only temporarily, if at all. The twentieth-century nation-state, with all its pretensions, will starve to death as its tax revenues decline."
Or, as Alastair Campbell parsed it a few years back:
Of course Rees-Mogg Jr may not share every part of the Rees-Mogg Sr worldview. But we know from his own mouth that he shares much of it, and reading The Sovereign Individual, it is easy to see why he so loves Brexit, and the chaos and disorder, and opportunities for disaster capitalism and super-elitism, that it may provide. At least his father was honest in his depiction of that vision – the commercialisation of sovereignty, Bermuda in the sky with diamonds – as a good one for people of wealth who can put their assets wherever they like, so that taxes and inflation are for the ‘left-behinds’ not the Sovereign Individuals born to rule, but freed from all rules themselves. Lord Mogg would be very proud of his son’s role in trying to get Britain to the hardest Brexit of all, whatever the impact on the ‘left-behinds’ whose votes were just a necessary support on the journey, but whose needs will be forgotten as soon as the vision of Bermuda in the sky with diamonds is upon us.
Brexit might seem anathema to the idea of crypto but it isn't. Brexit ideology sits hand in hand with it. While John and Jane Bloggs are trapped in their nation state, paying more for less, the welfare support net and our public institutions stripped to the bone, the select few, the winners, do what they like, when and where they like, free from regulatory interference. "Only the poor will be victims of inflation," in Rees-Mogg's vision of the future.
In some ways, tomorrow really is today.
