Tag: cryptocurrency
How Right-Wing Grifters Promote Online Sports And Crypto Gambling To Kids

How Right-Wing Grifters Promote Online Sports And Crypto Gambling To Kids

Right-wing influencer and Andrew Tate fanboy Adin Ross sits behind his computer and streams brightly colored slot games, blackjack, and roulette to his audience of loyal fans. Ross has blown through gargantuan sums of money while gambling on his livestreams and has won big jackpots.

“You have like tons of different emotions throughout your whole entire body,” Ross said about the euphoria of online gambling during an interview. “It’s just dopamine release.”

If Ross’ audience members are interested in following in his footsteps, he is setting them up to fail.

Ross is an example of influencers and right-wing figures who are promoting crypto gambling and sports betting ventures to their young audiences. Many of these figures, including Ross, have landed major sponsorship deals with gambling companies and are sometimes given house money to gamble with, removing the actual risk associated with online gambling.

Influencers are promoting these games to young viewers as gambling addiction rises among adolescents and horror stories about streamers and followers draining their bank accounts are popping up across the internet.

Meanwhile, a number of streamers have enormous and devoted followings across social media, and the lucrative industry is constantly evolving. Teens and young adults in particular have a fondness for watching livestreamers. According to a report in Wired, 21% of the users on Amazon-owned streaming platform Twitch are between 13 and 17 years old.

Twitch has had a complicated relationship with gambling and casino streamers on its platform and has placed limits on the kind of gambling that is allowed. Some influencers have spoken out about the unrealistic expectations that gambling streamers create for their fan bases.

Influencers promoting gambling and betting companies

High-profile streamers, influencers, and celebrities have aligned themselves with gaming organizations like Stake, a crypto gambling and sports betting website. These figures share videos and pictures of themselves using Stake, gamble while livestreaming, promote the website, and sometimes share gambling earnings on social media.

For instance, rapper Drake has become an official partner of Stake, and the site has sponsored a handful of other influencers.

One of the most high-profile Stake-sponsored streamers is Ross, who has a “huge, dedicated fanbase” and exclusively streams on Twitch rival Kick. Kick is a new streaming platform that is reportedly backed by Stake and is a safe haven for white nationalist-linked content creators. The website features various gambling categories that viewers can join and watch streamers play.

On Kick, Ross labels some livestreams with “#AD,” appearing to indicate that the gambling he is doing on his stream is part of a sponsorship deal. At one point, Ross was reportedly making nearly $1 million a week from his Stake sponsorship.

An 11-year-old Ross fan reportedly admitted to gambling on Stake after watching Ross’ streams.

Ross has publicly acknowledged that young kids watch his gambling streams and that past projects he has sponsored have been scams.

“By the way, that MILF token shit that I did a while back, I already told you guys, don't buy that shit,” Ross said during a livestream about a past crypto project he promoted. “I got paid a bag to do that shit. Like, I don't give a fuck. I hope none of you guys actually bought it."

During an interview on the H3 Podcast, Ross was told about the potential harms that could come from promoting crypto gambling.

“I’m learning a lot, bro,” Ross said after hearing about the potential harms gambling can have on his audience. “I’m honestly overwhelmed right now in my life. Because it’s just — it’s so new to me.”

“You make me rethink about it now, bro. …. It’s just something I — that just doesn’t click right for me,” Ross later added.

But following this interview, Ross did not stop working with Stake and airing gambling streams.

Some of Ross’ sponsored streams are bombarded with racist and antisemitic comments, which could also have a negative impact on young viewers.

Ross recently sat down with UFC president and Trump superfan Dana White for an in-person gambling event. Following their meeting, Ross claimed that White hopes to connect Ross with Trump for a stream closer to the 2024 election. (White’s UFC also has an official partnership with Stake as well.)

Jake Paul, a right-wing influencer and professional fighter who has a massive following on social media including many young fans, co-founded Betr, a “microbetting-focused gaming company” that allows users to make monetary bets on specific plays or events, rather than betting on a team losing or winning a game. Paul appears to be hoping that the instant gratification of making money on small bets drives his young audience to Betr. Additionally, Paul has previously been accused of promoting gambling to kids.

Betr also appears to be targeting users on social media platforms that are frequented by young people, including TikTok and Instagram. The company has large followings on both platforms.

Other right-leaning influencers, including professional poker player Dan Bilzerian and gambling streamer Trainwreck (real name Tyler Niknam), have worked as sponsors for gambling companies in the past.

Major media companies are getting in on the sports betting action

Other outlets and platforms in the right-wing media ecosystem have aligned themselves with the gambling and sports betting industry.

Fox Corp., the parent company of Fox News and Fox Sports, is associated with Fox Bet, a mobile app and website that allows users to make monetary bets on professional sport competitions and play casino games.

Fox Corp. CEO Lachlan Murdoch has boasted about Fox’s foray into the sports betting world, describing the venture as “a huge opportunity” for Fox Sports’ portfolio.

And in 2021, Fox acquired right-wing sports website Outkick, which includes sports wagering and betting infrastructure. During a 2021 quarterly meeting with investors, Murdoch celebrated Outkick as an outlet that “will deepen our investment in the sports wagering ecosystem.”

The right-leaning media company Barstool Sports, founded by misogynist Dave Portnoy, operates Barstool Sportsbook, a sports betting platform and mobile app that is associated with Hollywood Casino.

Adolescent gambling addiction on the rise

Reports indicate that gambling addictions are increasing among teens and children, and experts are sounding the alarm.

The legal age to gamble in the United States is 18 or 21 years old depending on the state. This has not stopped influencers and gambling and sports betting companies from promoting their products and games to adolescents.

The earlier kids are exposed to gambling, the more likely they are to become addicted to the practice, according to a gambling treatment organization. Gambling addiction has the potential to “completely derail a person’s life,” cause mental health complications, and become a “gateway drug” to other adrenaline-inducing and potentially dangerous activities like drug use.

According to research from the International Centre for Youth Gambling Problems and High-Risk Behaviors, four to six percent of high school students are addicted to gambling. Compared to the one percent of adults addicted to the activity, this is a worrisome trend.

Researchers point to adolescents' underdeveloped brain functioning and emotionally driven decision making to understand why teens and children fall victim to gambling addiction.

Some sports betting and gambling groups have been fined for targeting their offerings to people under the legal gambling age.

While speaking with ABC News, Gary Schneider, a national board member of Stop Predatory Gambling, explained that these companies are targeting young users. “They want the next generation. They label it gaming,” Schneider said. “It's really gambling."

Reprinted with permission from Media Matters.


How Crypto-Backed Ponzi Schemes Endanger Our Banking System

The collapse of Silicon Valley Bank (SVB) last week raises serious issues far more significant than the obvious ones cited by the financial press and a broad range of Washington politicians.

Chief among these are bank loans against dubious assets. That’s not getting much if any attention in the news or from Washington and is likely to soon be swept under the rug, allowing needlessly risky banking practices to continue.

Before its collapse last week, SVB made loans against Bitcoin and other cryptocurrencies.

The question: why is any bank anywhere allowed to accept crypto as collateral for loans?

Why do banking regulators allow our federally insured and regulated banks make loans using magic internet money as collateral? That’s a crazy policy, no different than allowing banks to accept buckets of ice cubes in winter as collateral, even though they melt come spring and evaporate in summer.

Bitcoin and its imitators are not money. They are not currency. They’re hardly used to buy and sell, an unsurprising fact given that by design the Bitcoin system can process only seven transactions per second compared to many thousands of transactions per second for credit cards.

Indeed, except for laundering proceeds from drug trafficking as well as hiding assets from creditors, estranged spouses, and the tax police, cryptocurrencies have no use.

High-tech Ponzi Scheme

Cryptocurrencies and their cousins, Non-Fungible Tokens or NFTs—are just a high-tech Ponzi scheme. Instead of Charlie Ponzi or Bernie Madoff personally running the con, the crypto scam relies on decentralized computer blockchain and “mining” of mathematical solutions.

Bitcoin’s supposed inventor, who went by the pseudonym Satoshi Nakamoto, has never been identified. He or she has since vanished, leaving holders with a digital string worth only as much as the next fool, or crook, will pay for this imaginary asset.

Early participants in Ponzi schemes profit mightily if they cash out while the gullible souls who get sucked in later wipe out. That is what happened to SVB, America’s 16th largest bank, which was big on crypto loans.

Many Bitcoin “investors” have already been wiped out as the “market cap” of Bitcoin plummeted from nearly $1.3 trillion in 2021 to about $389 billion on Friday, down almost 70 percent.

Why do banking regulators allow our federally insured and regulated banks to make loans using magic internet money as collateral? That’s a crazy policy, no different than allowing banks to accept buckets of ice cubes in winter as collateral, even though they melt come spring and evaporate in summer

Silicon Valley Bank is just one of many federally insured financial institutions that accept crypto currency as collateral for loans. Some banks will loan you 90 percent of the seeming value of your crypto, though 50 percent loan-to-value is more common and that appears to be the standard at SVB based on its web pages.

Zero Interest Crypto Loans

All sorts of financial news outlets offer advice on borrowing against crypto. These include NerdWallet, and the increasingly naïve and unreliable Forbes. People with crypto can even borrow at zero interest. Gadzooks!

For a sober look at the big risks of crypto loans read Investopedia’s essay.

In the wake of the second largest bank failure in history, you should be deeply concerned that for more than four decades we have failed miserably at regulating banks. That history contrasts with the period from 1935 until voters abandoned the moderating and successful New Deal banking rules in favor of Reaganomics.

We took a wrong turn when the prudent New Deal banking regulations in effect from 1935 were killed by Reaganomics, which re-regulated banks to reduce regulations and increase the risk of financial institutions failing. (There is no such thing as deregulation, only new regulation, which in our time on terms typically means regulations favoring corporations, including banks, over customers, financial prudence, and public safety.)

Congress’s Role Is Critical

What we need now are Congressional hearings to examine the reasons that cryptocurrencies can be collateral for bank loans.

Even if you don’t own Bitcoin or its growing list of alternatives, this story matters to you for multiple reasons.

Your money is only insured up to $250,000. Any money above that isn’t insured. That means if you’re a trustee of a nonprofit, for example, and it’s got $1 million in the bank, you or the organization you help lead is at risk of being wiped out in a bank failure.

The federal government is covering all deposits for SVB and at Signature Bank in New York, which failed Sunday. But that doesn’t mean it always will. During an earlier banking crisis nonprofits with more than the guarantee then in effect of $100,000 lost their deposits above that sum, which got very little news coverage at the time.

If people want to buy crypto, they should be free to do so. But they should not be allowed to put our bank deposits and investments at risk by using these digital tokens as collateral for loans. After all, it’s your, and my bank deposits, along with those of businesses, nonprofits, and our governments that the banks use to make loans, so it’s not like we don’t have a deep interest in blocking crypto of any kind as collateral for loans.

Reprinted with permission from DC Report.

As Cryptocurrency Crashes, It's Orange Jumpsuit Time For Fraudsters

As Cryptocurrency Crashes, It's Orange Jumpsuit Time For Fraudsters

I follow the crooks and criminals so you don't have to -- but I need support to continue covering their misdeeds, so please consider becoming a paid Substack subscriber to my columns.

Count ’em: eight counts over 14 pages in the dry yet chilling language of the federal prosecutors from the Southern District of New York, charging Sam Bankman-Fried (current residence: a jail cell on Grand Bahama Island) with two kinds of wire fraud, two kinds of conspiracy to commit wire fraud, commodities fraud, securities fraud, money laundering, and conspiracy to defraud the United States by violating campaign finance laws.

The title of Count One gives you an idea of the flavor of the thing: “Conspiracy to Commit Wire Fraud on Consumers.” There it is, in black and white, the gist of the entire business of Bankman-Fried’s FTX: to defraud consumers – that would be the suckers who invested in his cryptocurrency business by transferring their money into his accounts -- for which they were rewarded certificates, or account statements, or something anyway, stating that they were now the proud owners of FTT’s, the crypto-tokens representing their investments.

In the icy phrasing of the indictment, Bankman-Fried and others in on the conspiracy were engaged in “obtaining money and property by means of false and fraudulent pretenses, representations and promises,” and using that money and property to “pay expenses and debts of Alameda Research, Bankman-Fried’s proprietary crypto hedge fund, and to make investments.”

Breaking that down into plain English, Bankman-Fried was taking the money of his customers and using it to repay loans that had been made to his hedge fund and make investments in other companies, real estate, and in other ways, none of which had been disclosed to his customers or authorized by them. He was, in effect, stealing. The thing he was using to steal his customer’s money, his cryptocurrency, was advertised as a new way of investing your money that was outside of the control of the banking system and the U.S. government. Why investors would want to wire their money over to the Bahamas, or wherever else Bankman-Fried held the funds, is a subject for another column. But the fact that the customers’ money would be outside of the control of the U.S. government gives you a clue as to why people who take what ended up being in the tens of billions and turn it over to a 30-year-old man who had no previous experience in handling investments of that or any other size.

The rest of the indictment lays out how the money Bankman-Fried took from others was misused. Some of the fraud was committed against banks or other investment firms or individuals who bought into the scam sufficiently that they were willing to lend billions of dollars to Alameda Research, which has been described variously as Bankman-Fried’s investment bank or hedge fund. Those lenders lost their money, too, alongside that of the individuals who gave Bankman-Fried their money and received cryptocurrency in return.

The commodities fraud charge simply represents another law broken by Bankman-Fried and others while doing the same thing – taking money with one hand and giving it to the other hand, Alameda Research, not to invest for the customers, but to pay expenses incurred by the hedge fund/investment bank and to make investments that had nothing to do with achieving a return on investment for the consumers but everything to do with misappropriating their money and using it for purposes beneficial to Bankman-Fried and the eponymous “others.”

The charge of money laundering refers to misusing money that “represented the proceeds of some form of illegal activity, to wit, the wire fraud alleged in Count Two.” So, he was taking his ill-gotten gains from committing one crime and using them to commit another.

In fact, as you read the indictment it becomes evident that the entirety of what Bankman-Fried and his two businesses, FTX and Alameda Research, were doing was committing crimes. The federal government is saying that it wasn’t a legitimate business endeavor, by which Bankman-Fried would solicit money from investors and then turn around and invest the money for them so they could achieve a gain from their investment, i.e., more money. The entire purpose of FTX and Alameda Research was to defraud “customers,” that would be the investors, out of their money so Bankman-Fried and “others” could use the money for their own purposes – none of which they had told the investors about. In fact, the indictment is filled with words like “misrepresented,” “conceal and disguise,” “deceitful and dishonest,” “manipulative and deceptive device and contrivance,” and “materially false information.”

The indictment, in short, lays out in eight separate violations of the federal laws how the businesses owned by Bankman-Fried (he owned 90 percent of Alameda Research and apparently all of FTX) were entirely based on lies and deceit. They weren’t real.

They took money that was real and converted it into a cryptocurrency they told people was real but wasn’t. Bankman-Fried was just moving money around for his own purposes and for his own gain. All his claims in the flurry of interviews he has given over the last month that he didn’t understand what had happened or where eight billion dollars had gone when it went poof were filled with lies. The federal indictment lays out the story that he knew exactly what he was doing.

Some amazement has been expressed by legal experts over the past 24 hours about how the Southern District was able to put this indictment together in such a rapid fashion, given that the collapse of FTX happened just a month ago. However, reading the indictment gives the answer: Bankman-Fried is just a thief. All he was doing was stealing other people’s money, and now an orange jumpsuit awaits him at the Manhattan Federal Correction Facility where he will stay upon being extradited from his jail cell in the Bahamas to the U.S. to answer for his crimes.

In act two of the crypto crash, Binance -- the world’s largest cryptocurrency exchange when it comes to volume -- announced on Tuesday that it is “pausing” withdrawals from its own USDC magic cryptocurrency accounts after more than $2 billion was withdrawn in the last 24 hours, with $1.14 billion of that coming today.

Changpeng Zhao, the founder of Binance, was the character who started the whole crypto snowball rolling down the proverbial hill when back in November, he announced in a Tweet — because of course he did — that he was selling his holdings in FTX’s digital currency, leading to a run on FTX’s accounts and the same sort of “pause” in withdrawals by FTX customers.

As noted above, FTX is now in bankruptcy and Sam Bankman-Fried is in jail in the Bahamas awaiting deportation to face charges in the Southern District of New York.

You’re going to love this one. In the world of cryptocurrency, which advertises itself as a place to put your money to get away from the prying eyes of banks and the government, the USDC cryptocurrency is known as a “stablecurrency” because its value is pegged to the U.S. dollar, according to The Observer. And of course what the customers of Binance have been doing over the last 24 hours is converting their holdings of this so-called “stablecurrency” into good old U.S. dollars because, well, U.S. dollars which need to be deposited in banks which are overseen and regulated by the boogeyman U.S. government, are turning out to be just a tad more stable than Binance’s so-called stablecurrency.

So all these cowboy investors who have been putting their money in crypto are running back to the banks and big-momma U.S. government to take care of them.

Meanwhile, Binance has announced that they are unpausing withdrawals of dollars from their USDC accounts because they have successfully done what’s called a “token swap,” which involved swapping one cryptocurrency for another.

Sound like three-card-monte to you? Which cup is the little ball under now, investors?

Lucian K. Truscott IV, a graduate of West Point, has had a 50-year career as a journalist, novelist, and screenwriter. He has covered Watergate, the Stonewall riots, and wars in Lebanon, Iraq, and Afghanistan. He is also the author of five bestselling novels. You can subscribe to his daily columns at luciantruscott.substack.com and follow him on Twitter @LucianKTruscott and on Facebook at Lucian K. Truscott IV.

Please consider subscribing to Lucian Truscott Newsletter, from which these columns are reprinted with permission.

Why Regulate Crypto When We Can Just Watch It Crash?

Why Regulate Crypto When We Can Just Watch It Crash?

Cryptocurrencies were born out of the libertarian dream of a financial system free from government regulation. Bitcoin's promoters peddle its ability to let us make transactions without dealing with regulated banks, which, they say, we are not supposed to trust.

What crypto players since stripped of their "investments" saw were some operators getting amazingly rich sitting in their shorts and running numbers on their laptops. The less savvy may not have quite understood how this thing worked, but they could bask in the flattery of being called "brave," per the Super Bowl ads.

The crypto markets crashed amid a sobering string of scandals, crimes and the growing evidence that much of this wealth was basically made-up money. Amid so much suffering, calls have been growing in Washington to impose government oversight on the industry.

The idea is insane.

Nonetheless, the chair of the Securities and Exchange Commission, Gary Gensler, wants to work with Congress to increase his agency's oversight of what he has accurately calls the "Wild West" of crypto. And Sen. Elizabeth Warren (D-MA) is predictably working on a big digital currency bill that, Politico reports, would cover "consumer protections, anti-money laundering rules and climate safeguards for crypto mining."

The climate part refers to the coal-fired power plants providing the obscene amount of electricity to mine bitcoin. And the money laundering (and assorted scams) is made possible by another of crypto's libertarian virtues, anonymity.

Most of the problems Warren cites are being fixed right now through the collapse in crypto values. Many financial experts say the crypto era is now over (although the associated blockchain technology may have good future uses).

When the government gets involved with overseeing investments and the entire category goes south, calls for government bailouts follow. Do the taxpayers really want to be on the hook for invented money? Besides, the biggest crypto selling point is that it isn't regulated by the government.

But aha, some crypto businesses are now saying, OK, as long as we help write the regs. If that happens, again, heaven help the taxpayers.

One such volunteer was Sam Bankman-Fried, whose $32 billion fortune has vanished along, apparently, with the holdings of depositors at his former crypto empire, FTX. Bankman-Fried cleverly broke with others in his industry by actively calling for regulations. That prompted would-be investors to think: A guy who wants his crypto business regulated is probably on the up-and-up, as opposed to other figures in this admittedly dark business.

Some have likened the crypto craze to the Beanie Baby bubble of the 1990s. Beanie Babies were nothing more than cloth dolls stuffed with beans. They originally sold for $5, but their creator, as Vox reports, "used the illusion of scarcity" to make many think they could be incredibly valuable. People lined up outside Hallmark stores to score a new Beanie Baby release. Especially desirable models traded for thousands of dollars. Naturally, a black market for counterfeit Beanie Babies quickly surfaced.

But step aside Beanie Babies, and make room for CryptoKitties. This is a blockchain-based game that works as follows: You turn over one of the cryptocurrencies in return for pictures of cute little cats. They are marketed as unique kitten pictures, and some have sold for over $100,000. But CryptoKitties are nothing more than digital artwork, which means they have no value other than what you think it is.

Agustin Carstens, a former director at the International Monetary Fund, has called crypto "a combination of a bubble, a Ponzi scheme, and an environmental disaster."

Cryptocurrencies were created to avoid government. Government should avoid cryptocurrencies. Let we who trust banks stroll past the smoking crypto ruins. Not our problem — or shouldn't be.

Reprinted with permission from Creators.