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Balaji Profile picture
@balajis
Nov 15, 2022 • 11 tweets • 7 min read • Read on X
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The net result of FTX is that billions of dollars was stolen from crypto investors to give to Democrat-aligned politicians, nonprofits, and journalists.

This is why there may be no prosecution.
Why is SBF so protected?

Why is everyone from SEC to NYT running interference for him?

He was basically Soros junior — just with stolen customer money — and evidently bought off the entire media, nonprofit, political, and regulatory establishment.
archive.ph/HYdcM
The author is a born-rich journo. So he knows Bankman-Fried’s milieu.

And the overall picture you get is of rats scurrying around now that SBF’s money has been cut off — and very much not wanting defrauded crypto investors to clawback those stolen funds.
archive.ph/HYdcM
The stage is set for an absolutely insane zero-sum match.

On one side, one million crypto investors robbed of ten billion dollars by SBF.

On the other side, a network of dark money Democrats who will fight to keep as much of those stolen funds as possible.

The fur will fly.
The bankruptcy case may play out on social media.

Crypto investors seeking to get FTX funds back may hire lawyers like Irving Picard, who clawed back ~75 cents on the dollar for Madoff victims.

And who would they claw it back from? The groups SBF funded.
archive.ph/Uzsos
The fundamental question is: when did SBF start stealing from customers, and how much did he steal?

This can only be answered by forensic accounting.

The headline amount given to Democrat politicians of $37M+ understates it. FTX Foundation alone was $190M.

How much was stolen?
We need a list of all the “donations” SBF made, potentially with stolen money. Here are at least four:

- $69M in political donations, mostly to Democrats, some to Republicans via his subordinate
- $190M to a foundation
- $128M to a PAC
- Undisclosed amount (!)

There’s more…
All kinds of obfuscation games have been played here. Donations made with possibly stolen funds. Numbers that are publicly known may just be the tip of the iceberg.

Where did the ten billion go? How much was stolen? And when was it stolen?
The Crypto Clawback

Anyone with money on FTX may want to learn the following terms:

- clawback
- lookback
- fraudulent conveyance
- unjust enrichment
- voidable preference

Ask a lawyer. You may be able to recover funds by pursuing the organizations SBF “donated” your money to.
This is why the establishment has been so muted on SBF!

It’s because one million crypto investors might clawback billions of dollars, by pursuing the many nonprofits, politicians, and media corporations SBF “donated” their money to.
Ask a lawyer. If FTX stole your money, you may be able to sell your bankruptcy claim.

An investor might buy claims for X cents on the dollar, taking on the risk of getting Y>X at a future date.

For $10B, many groups SBF “donated” to could be pursued. lowenstein.com/media/6418/nat…

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More from @balajis

Balaji Profile picture
Jan 24
After America, China vs the Internet.
After DC, Xi vs Satoshi.
China is moving into Canada.
Tech is moving out of California.
And the world is moving out of the dollar.
What that adds up to is Communist vs Maximalist.

Because after the dollar ends, DC is out of money.
So: Carney, Newsom, Walz, Mamdani turn to Xi.
And MAGA, Elon, Texas, Miami turn to Satoshi.Image
I agree that places like Alberta will be a battleground (and indeed are already battlegrounds; see Bessent's recent comments).

This was an alternate map:
Image
Read 7 tweets
Balaji Profile picture
Jan 18
WHO LOST CANADA?
It was obvious that China/Canada would happen. Here's how it happened, and what may happen next.

(1) First, in early 2025 it looked like Canadian conservative Pierre Poilievre was a straight shot to win Canada. Instead, all the MAGA posts about annexing Canada undercut Pierre, boosted left nationalism, and turned what looked like a sure thing into an epic defeat. The result was Mark Carney:

(2) Carney is on the left but is far more intelligent than his predecessor, Justin Trudeau. He's also the former governor of the Bank of Canada, and understands that the G7 (including Canada) is in the midst of sovereign debt crisis. And the Canadian dollar is going the way of the US dollar, which is to say that it's going to zero. Canada needs access to hard goods and will trade natural resources to get that. Hence, China. Carney's Canada may become a sort of North American Russia, trading oil and lumber to China for cars and electronics.

(3) Who lost Canada? The fundamental reason this happened is that MAGA ironically doesn't understand its own self-interest. Even the term "America First" is misconceived, because it groups a Blue American like Elizabeth Warren together with a Red American like JD Vance...when in reality the Red American and the Red Canadian (like Pierre Poilievre) have much more in common. All the "joke" posts on annexing Canada managed to needlessly put Red Americans at odds not just with Blue Americans and Blue Canadians, but also with Red Canadians.

The Greenland thing will have exactly the same effect, as it'll end up pushing Western Europeans to China. That's actually why most ultranationalist movements fail: they're just so shortsightedly tribal that they're terrible at building coalitions.

(4) Anyway, while Carney is the first to be this explicit about aligning with China, expect many other Western leftist leaders (like Newsom and Walz) to line up with China over time. The reason is that while Democrats really did fight Communists from ~2021-2024 over the question of who'd run the world's most powerful state, Democrats lost. All the chip sanctions and isolation tactics that somewhat worked on Russia, and frankly might have worked on almost any other country, just didn't work on China...because China had enough internal economic scale to essentially be their own autarkic civilization, and build whatever they needed.

(5) So: the anti-China Biden Democrats have been replaced by the China-curious Newsom Democrats. And now the China-aligned Carney Canadians. With Carney making the first move, you should expect many more blue state Democrats to align with China, particularly those on the West Coast like Newsom.

(6) It's simple coalitional math. Democrats are the ingroup, Republicans are the outgroup, and Communists are the fargroup. So, for Democrats: the enemy of their Republican enemy is their friend. And there is much for them to admire in the Chinese political system. After all, Democrats and Communists both built one-party states:

(7) Newsom in particular is likely the next shoe to drop, because even in 2023 he was reaching out to Xi. He's also spoken in Xinhua (Chinese state media) about becoming China's "long-term, stable, and strong partner." Newsom posts images of himself shaking Xi's hand, while also posting images of Trump in handcuffs. It's clear which President he's more comfortable with:

(8) The California wealth tax is also worth mentioning here. As M. Guimarin correctly pointed out, the net effect of the wealth tax is for blues to drive tech out of the state. That's not an unintended consequence: the purpose of the wealth tax was to either rob or deport the sole remaining political opposition to Democrats in California, namely technologists.

(Side note: Democrats are historically much better at mass deportations than Republicans, as they take a whole-of-society approach to it, and persist with it over decades, and do it silently and nonviolently. That's how Republicans were pushed out of university faculties, media companies, and California itself. It was once a dark red state, and now it's deep blue.)

(9) Anyway, with the technologists pushed out of California, Newsom's blues can welcome in the Chinese, who won't be subject to the same wealth taxes as they aren't US citizens.

(10) There is also an obvious geostrategic aspect to this: Chinese Canada is a bridge across all the blue states, from the West Coast to the Northeast. So as blue states like Minnesota and California engage in more "soft secession", they can all link up with Canada, and get supplied by China.

Decades ago, this map was made as a joke.
Perhaps it becomes all too real.Image
Image
Image
Image
See also this post from 2023.

Newsom has significant room to attempt left populism, by refusing to enforce tariffs on Chinese goods that land at Canadian ports. He's signaled willingness to do that, and that may be how this manifests.
balajis.com/p/only-newsom-…Image
See also this popular post on "soft secession" by blue states. Tim Walz' recent invocation of the 10th Amendment is in this vein.

Of course, this is an inversion from decades of Democrat rhetoric. But that doesn't matter. The ideologies of the past are breaking down, with blues now endorsing states' rights and federalism now that they've lost DC...and reds embracing federal power now that they have DC.

It's all just tribalism now.
The Disunited Tribes of North America.
cmarmitage.substack.com/p/its-time-for…Image
Read 5 tweets
Balaji Profile picture
Dec 3, 2025
If a country stay smalls to remain true to its roots, it eventually gets absorbed by an empire.

Conversely, if a country plays for empire, and truly achieves world domination, it absorbs so many that its subjects eventually outnumber the imperial core. And thus the empire, too, loses touch with its roots.

Stay small and get conquered.
Get big and get diluted.
I like Switzerland and agree that it was arguably an exception to the rule. But it isn’t anymore and hasn’t been for some time.

It capitulated to Obama in 2009 on financial privacy, and so Swiss bank accounts don’t really exist. The Swiss (perhaps understandably) sanctioned Russia after 2022 and nuked the Credit Suisse bondholders, in violation of financial neutrality. That neutrality is now found only onchain.

The country is also de facto a member of NATO and the EU, even if not de jure. And is moving towards de jure. It’s a member of the Schengen zone and signatory to 100+ bilateral treaties, which means much of its law is already written in Brussels.

Basically, like all Western European countries, it’s already just a protectorate of the American Empire and no longer has real foreign or domestic policy independence.

And Switzerland now feels it needs to *formally* join the US/EU empire or get beaten by Russia, which is the dynamic I mentioned above: small countries get absorbed voluntarily into one empire, or involuntarily into another.Image
It’s still formally neutral, but it’s neutral in name only. The economic and military benefits of being part of a scaled empire were too great. See post above.

Unfortunately for Switzerland, it’s losing its neutrality at a bad moment in history, by being sucked into the gravitational black hole of the Western sovereign debt crisis. It’s getting pulled into a declining empire, instead of benefiting from a rising one. Maybe it suffers less damage than its neighbors due to legacy neutrality, but it won’t be unscathed.

That said, if you had to live in Western Europe, you’d likely live in Switzerland, as it may have the best financial position among its neighbors. Yields have actually gone negative there. It might be the cleanest dirty shirt in the region.Image
Read 4 tweets
Balaji Profile picture
Nov 7, 2025
Communism shatters economic relations, but ultranationalism breaks diplomatic relations.
If the far left’s failure mode is not understanding self-interest, the far right’s failure mode is not understanding other-interest.

That is to say: we know the far left doesn’t viscerally get the idea of capitalism, of building products, of sometimes just not having the money to do something. The far left fantasy is of total independence from needing to work at all. They don’t understand economic scarcity.

But the far right similarly doesn’t get the idea of diplomacy, of building coalitions, of sometimes just not having the votes to do something. The far right fantasy is of total independence from needing to work with others. They don’t understand political capital.

And that is also a failure mode. If you can only cooperate within your small tribe, you can’t even scale up. And then your tribe loses.

(The alternative is international capitalism, which is more practical than the socialist left and more scalable than the nationalist right.)Image
When you go *too* far to the nationalist right, you limit your coalition to only those who are both right-of-center and citizens of your country.

But only China has the scale to really do everything in one country. Everyone else needs allies.
Read 6 tweets
Balaji Profile picture
Oct 14, 2025
The AI flippening. Image
Crypto has also decentralized to Asia. Image
About 55% of unicorns are still in the US, but the trendline there is also towards decentralization. Image
Read 4 tweets
Balaji Profile picture
Oct 8, 2025
There's dark talent around the world, from the Midwest to the Middle East. Backing this talent is the right thing to do morally and the smart thing to do economically.
To be clear: I'm not talking about sending more tech talent to the US. Instead, I'm talking about backing dark talent around the world.

That includes the many white kids from places like the Midwest who've been unfairly quota'd out of Harvard. But it also includes those outside America whose societies were ravaged by war, socialism, or communism...and who are just now starting to become productive again.

The goal is global equality of opportunity. The Internet actually now provides the basis for uniform rule-of-law via rule-of-code, starting with Bitcoin and smart contracts. We just need to execute from here.
Yes. That's what the blockchain is: everyone worldwide gets access to their ideal monetary policy, payments, smart contracts, and entity formation. Enforced by incorruptible & transparent computer-based judges. And opted into on a purely voluntary basis.
Read 4 tweets

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