Part two: MAGA Opportunism and the FTX collapse
The already flimsy right-wing narratives manufactured after the collapse of FTX now include federal agents, drug cartels and the CIA. Allow me to explain the point of all this.
Last week, I discussed the opportunistic right-wing narratives that were manufactured after the collapse of the cryptocurrency exchange FTX. The blame, according to MAGA media figures, needed to be directed at the Democrats who accepted large amounts of campaign contributions from the founder of FTX, Sam Bankman-Fried (commonly referred to as SBF). Part one and this subsequent follow-up are in no way an apology for SBF’s shady practices, nor do I wish to argue the mainstream media’s coverage of the FTX has been particularly commendable. There have been puff pieces in multiple outlets that continue to cast SBF in too positive a light. Billions of dollars are missing, and the rightful owners of that money vary from massive hedge funds to retirement funds to the average person with a crypto hobby. These people are angry and rightfully so. SBF’s comments to the media have done nothing to alleviate concerns that he simply lost the money on a plethora of risky bets he never should’ve taken.
However, all of this can be true, and the right-wing narratives which have emerged and continue to evolve related to FTX can also be false, politically charged hit pieces meant to misdirect and mislead their readers. Yes, Democrats received around $40 million from FTX, but Republicans also received around $24 million. MAGA media figures—at first ignoring this fact and now reluctantly addressing this—are attempting to pin the blame away from pro-Trump figures onto more establishment figures like Mitch McConnell and Kevin McCarthy. Regardless, the far-right political figures want to stay as far away from this story as possible, and it’s not simply because they want to tear down the GOP and rebuild it in Donald Trump’s image starting with a win in the 2024 election. No, the purpose goes deeper than that. The narrative tentacles vary from claiming SBF is a federal agent to claiming FTX may have been involved in an elaborate money laundering scheme not just in Ukraine (as previously dissected in part one), but something even bigger. Why are they doing this? What are they hoping to accomplish with this?
Allow me to explain what they’re arguing and the purpose MAGA hopes these talking points will serve.
How the narrative is evolving
There is no unified narrative in terms of what happened to cause FTX to collapse, what purpose the company served before it collapsed or who benefited. However, there are some strains of the right-wing narrative that appear to share many of the same or similar talking points. One such case is the argument that Sam Bankman-Fried is a fed (federal agent). The idea here is that SBF was working with federal agents and presumably the federal government (a/k/a the Biden White House) to bring about some sort of desirable outcome for the Democrats. Now, is there any evidence proving or disproving the idea that SBF worked for the federal government? No, there’s no tangible evidence for or against, but the idea that this is happening is purely a guess based on limited circumstantial evidence.
However, this is an important point to focus on because as Jack Posobiec put it, he believes this is not just a money laundering operation but an intelligence operation. Whose intelligence operation? The U.S. government’s.
Why would they claim SBF is a fed?
Because the federal government—with support from the Biden White House—wants to regulate cryptocurrencies, and neither right-wing domestic actors in Western countries or pro-Kremlin forces want this to happen. However, the collapse of FTX make it easier for those who wish to regulate crypto to point to the loss of potentially billions of dollars from investors into FTX as a justification for more regulations. It makes plenty of logical sense, doesn’t it? Lack of regulation of crypto is causing people to lose money again and again. There are no real safeguards in place, and the “backing” of FTX really comes down to whether or not you take the operators at their word: “It’s safe to put your money here. We promise.” There’s a fairly long list of scams involving collapsed cryptocurrency exchanges (Mt. Gox, BTC-e and now FTX) and failed coin projects (Terra-Luna, OneCoin, BitConnect etc.). There are also numerous security concerns when it comes to maintaining crypto, as various hacks over the years have resulted in hundreds of millions of dollars being stolen from multiple crypto platforms such as Bitfinex, Coincheck, Ronin, Wormhole and Poly Network. Time and time again, we’ve seen evidence of the dangers inherent to crypto. If the government doesn’t get involved, more scams will happen.
As much as folks in the Bannonsphere like Jack Posobiec and Darren Beattie claim to be concerned about corruption, let's not forget that Bannon was charged with money laundering and conspiracy only two months ago. Also recall what happened with the unregistered securities that belonged to Steve Bannon’s backer Guo Wengui?.
Nevertheless, Bannon has ventured into crypto of late with a coin he called $FJB, the “Fuck Joe Biden” coin.
But it’s not just Bannon. Richard Spencer once called bitcoin the currency of the Alt-Right, and that’s proven to be true even today. Despite the lawsuits and judgements from the Sandy Hook defamation trials against him amounting to nearly $1.5 billion in fines, Alex Jones remains on air. He’s still paying his lawyers and contesting the lawsuits. He’s still putting himself and his other hosts on Infowars and his new video platform. In part, this is possible because of the millions of dollars in anonymous crypto donations Jones, but he’s one of many far-right figures relying on crypto to stay online. The Neo-Nazi website The Daily Stormer operates hundreds of different bitcoin addresses and has received at least over $1 million in crypto donations. White nationalist Nick Fuentes received roughly $400,000 in bitcoin donations in late 2020 at the height of Fuentes’s involvement in the “Stop the Steal” movement.
There’s similarly a long history of Russian hackers using bitcoin and Russian malware campaigns holding company data hostage until their ransoms are paid in—you guessed it—cryptocurrency. Whether the MAGA folks are intentionally and knowingly aiding the Kremlin or not in this scenario doesn’t really matter. Their goals are aligned. Many of their operations run on bitcoin and other cryptocurrencies.
“It wasn’t just money laundering, it was an intelligence operation”
On Tucker Carlson’s show last Thursday, he made a reference to the anti-vaccine trucker convoys which made headlines in Canada earlier this year. These unprecedented protests went on for weeks and caused significant disruptions in Ottawa, and the Canadian government struggled to respond to them. The protests shut down highways, disrupting supply chains and regular commuter traffic in the process. While the protests were organized and coordinated on social media sites like Telegram, they involved ordinary Canadian citizens. What kept the protests going were first the crowdfunding efforts of right-wing figures both in the United States and Canada, but after those campaigns got shut down and those receiving the funds had their bank accounts frozen, the organizers and its supporters increasingly relied on bitcoin donations. These proved significantly more difficult to seize, even after Canadian Prime Minister Justin Trudeau invoked the Emergencies Act to "restore order" in the country. Shutting off this money became a national security concern for the Canadian government, and it threatened to become one for the United States as well. Therefore, it can be reasonably argued that regulating cryptocurrency and preventing these anonymous donations will make it easier to shut down future protests that may turn out to be quite similar to what we’ve already witnessed with the trucker convoys.
Tucker Carlson and the rest of the right-wing MAGAsphere don’t want this to happen. Surely, the Russian government doesn’t either. Protests that shut down Western cities lead to more domestic chaos and infighting, which is always a preferred outcome in Moscow. Again, we see their interests align, and rather than accepting the misfortune of FTX’s collapse painting crypto in an even darker light, these groups prefer to claim “SBF is a fed.” In this telling, SBF was propped up by the federal government to fail, so the government could then use that failure to advance their desired outcome—regulating crypto.
It may not be the simplest or most logical explanation as to what happened to FTX, but it’s much better for them than admitting cryptocurrency is a recurring fraud used by fraudsters to repeatedly defraud people.
But how does this point back to the already established FTX / Ukraine / Democrat money laundering scandal they’ve been talking about?
The right-wing talking points are making some connections between the FTX / Ukraine / Democrats “money laundering operation” in Ukraine and tying it to their theory of the CIA’s involvement in Ukraine. The Kremlin and right-wing US domestic actors have long claimed the post-Euromaidan Ukrainian governments are puppets of the U.S. government under the direction of the CIA. For those who buy into this narrative, the idea that FTX, Ukraine and the Democrats are working together is a natural conclusion to draw because they’ve already been told this is happening for years now from a variety of sources. So, the next extension of this narrative is the CIA (a/k/a the “Deep State”) were either overseeing or directing the “money laundering operation” that was moving through FTX via Ukraine and ultimately ending up in Democratic Party campaigns in the midterms. It works on multiple levels because it highlights “corruption in Ukraine” which the right hopes to point back to Hunter and Joe Biden in their upcoming investigations revolving around “Hunter Biden’s laptop” by which they mean Hunter Biden’s supposed “hard drive”. Tucker also claimed that the war goals in Ukraine are nothing less than regime change in Moscow, and Putin believes this to be as well. In this framing, the FTX “money laundering operation” helps facilitate the ongoing “intelligence operations” which are not favorable to MAGA or the Kremlin, both of which hope to shut off U.S. aid to Ukraine and paint U.S. support to Zelensky in the worst possible light.
Is the right-wing addressing the fact that FTX was used to fund Republicans at all?
At first, the fact that nearly $24 million went to Republicans in the midterms was ignored by everyone on the right. Tucker even claimed on his show it didn’t happen!
But slowly the right has begun to admit this reality occurred, and instead of it changing their minds or making them reassess their previous assertions, they’ve simply pivoted to a different set of talking points. They are essentially saying, yes, some Republicans took money from SBF and other FTX executives, but it wasn’t Trump or MAGA Republicans. It was Kevin McCarthy. It was Mitch McConnell. It was a bunch of RINOs who voted to impeach Trump. They’re the guilty parties, not us!
This framing is another way for MAGA to isolate and attack the GOP establishment. Remember, moderate or establishment Republicans winning seats or gaining influence isn’t considered a win for the MAGA movement. It’s considered a setback. They want to tear down the Republican Party and “start something new” as Josh Hawley put it, himself a big proponent of more investigations into the downfall of FTX focused on the narrative I’ve discussed here in part one and two.
Putting the pieces together
As I’ve discussed, MAGA and the rest of the international far-right doesn’t want cryptocurrency regulated in any form. They use cryptocurrency to fund their operations. They’re going to try and prevent regulation from happening or do whatever they can to blunt the impact of any future oversights. The establishment in all its forms remains the enemy—whether it’s the “Deep State”, the “fake news media”, the Democrats or moderate Republicans. Politicians like Marjorie Taylor Greene are using the FTX scandal to attack Joe Biden and defend Donald Trump. This is part of the opening salvo of two years’ worth of investigations into any real or perceived enemy of the MAGA movement.
The FTX scandal isn’t going away, but the narrative will continue to evolve. The latest rumblings from Darren Beattie claim that Tether, another cryptocurrency which did have a close working relationship with FTX, may be the next thing to fall. Beattie’s article, titled ‘FTX on Steroids: Is “Tether” the Biden World’s Crypto BCCI?’, made one single mention of Ukraine. I’ll quote it here for context. Beattie writes:
Tether demand skyrocketed in Ukraine right after the Russian military operation began in February of this year. Ukrainian charities made appeals for Tether-based donations.
All of this was aided by Tether’s special advantage for use in money laundering…”
He then takes a Bloomberg quote out of context in an attempt to prove his point about “money laundering” (which is still unsubstantiated). But that’s it! That’s the only mention of Ukraine in Beattie’s article. Nevertheless, when Beattie’s story was repackaged and published by The Gateway Pundit, based on this single bit of information, the dots are already connected in the headline.
That’s it. That’s all they have to go on. Hoft links back to his junk news site’s “previous reporting” on the FTX / Ukraine / money laundering scandal I discussed in part one. They claim that part of the story is settled fact and then tack on Beattie’s speculation masquerading as reporting to add the next layer of the narrative. What’s the evidence that the cartels are involved in this supposed? Drug cartels have used Tether to launder money in the past, according to the Department of Justice. That’s true! But drug cartels also use bitcoin and other cryptocurrencies to launder money as well. This is not exclusive to Tether.
As to Beattie’s assertion of CIA involvement? During the Cold War, there were allegations of U.S. involvement in drug smuggling operations in Central and South America. Some of those allegations were credible. Some were not. Nevertheless, the Cold War ended over three decades ago.
The idea that FTX, Tether, drug cartels and Ukraine are somehow all part of a simultaneous money laundering operation orchestrated by the CIA is flimsy speculation at best. It’s Infowars level nonsense at worst.
How is this operation supposed to work anyway?
They haven’t gotten to that part yet, but they’ll come up with something eventually.
Where we go from here
It’s unclear today if Tether’s fall is likely, but the collapse of FTX has sent shockwaves throughout the crypto space. FTX may be an isolated incident, or it may be the first domino to fall. However, the threat of more collapse in the crypto space tells me that cryptocurrencies need to be regulated by the federal government. By framing the FTX collapse and the potential collapse of Tether through the “SBF is a fed” prism, the international far-right, MAGA and pro-Kremlin voices are priming their audience to maintain trust in crypto. The Bannonsphere wants their listeners to believe these collapses didn’t happen because crypto is a magnet for fraud, corruption and Ponzi schemes. No, no, no. This is culmination of the federal government’s efforts to take away your freedom.
“There’s a war on for your mind,” as Alex Jones says, but to buy this story, his audience has to ignore Occam’s razor.