Binance, OpenAI, and an Anarcho-Capitalist in Argentina
If this hasn't been an interesting enough week for news, just wait 15 minutes.
What a time to be alive. When you’re on Day 5 of flat out bonkers crazy, where does one even begin? Maybe I’ll stick with what is more in my own wheelhouse - crypto and blockchain networks. Remember a year ago when Sam Bankman-Fried’s paper empire collapsed because his frenemy Changpeng “CZ” Zhao decided to light a match?
Well now CZ is the one on the outs. Yesterday, Binance settled a years long investigation with the DOJ. As part of that deal, CZ steps down as the company’s CEO and Binance will pay a $4.3 billion fine - that “b” was not a typo. If one believes the proof of reserves statements, Binance could probably handle paying this today if it absolutely had to.
Just in stablecoin reserves alone, Binance has $3.2 billion in net surplus. But again, this is assuming there are no liens of any sort on Binance assets that we don’t know about. Time will tell there. The biggest winner here in the short term is likely Coinbase COIN 0.00%↑ in my view. But longer term, DEX activity will continue eating centralized exchange volume if we do crypto right:
We’ll see where we are a few months from now, but the immediate reaction from the blue chip cryptos seems to be that this Binance/DOJ problem has been somewhat priced in already:
The most important thing that makes CZ’s fall at Binance different from Sam Bankman-Fried’s at FTX is Binance was playing fast and loose with US user access while Sam was spinning plates on poles. Binance’s balance sheet doesn’t seem to be nearly as reliant on assets that the CEO created out of thin air like FTX/Alameda’s was last year. So that’s the good news.
Speaking of guys named Sam who have created shitcoins, the last 5 days at Artificial Intelligence behemoth OpenAI will serve as a case study in corporate governance for years to come.
A Weekend For the Ages
Long story short, OpenAI CEO Sam Altman was fired by OpenAI’s board of directors. The board, which had no real skin in the game and which was suffering from a litany of conflicts of interest, has since reversed the decision amid threats of an employee exodus that would have seen OpenAI investor Microsoft MSFT 0.00%↑ scooping up defectors. I could get into more detail on all of this but I can’t do it better than Mike Solana over at
did it this morning.
On OpenAI board member Helen Toner:
According to the New York Times, after she helped coordinate Sam’s corporate assassination, she told OpenAI’s Chief Strategy officer the destruction of the company would fulfill her mission as a board member.
Very fucked up crazy person!
But from where does this crazy come?
Gather round, friends, it’s time to talk about Effective Altruism (just say no).
Ah effective altruism, where have we heard that before? Oh right…
I don’t know a lot about “effective altruism,” but all I can say is the high profile people who are championing it don’t seem to have much in the way of a moral compass. This top down “by any means necessary” approach to shaping the world in their desired image is as dangerous as it is narcissistic. These are not the type of people I’d give the keys to the batmobile. And that brings us to what just happened in Argentina.
A Libertarian Moment?
At a time when the wannabe-gods in regulatory hierarchies, major corporations, and Swiss bug-flour organizations want to decide everything for the people, there’s something refreshing about a person publicly advocating for a reboot where the people get to choose how things will work.
Over the weekend the people of Argentina elected a self-described anarcho-capitalist to the presidency. Faced with a status quo candidate or a strip-it-to-the-studs candidate, the people finally had enough. After suffering through years of preposterous inflation and government corruption/incompetence, Argentina is attempting to take it down to the studs by electing Javier Milei.
So if we think that stealing is wrong, one of the biggest thieves in the history of humanity is the central bank. - Javier Milei
If, and this is admittedly a big if, he can find support in the Argentinian establishment, Milei’s advertised embrace of a truly free market would be a good thing. That said, I’m going to stop short of calling Milei a “big L” Libertarian given some of his other views.
Furthermore, despite his rightfully placed distrust for central banks, it’s surprising to me that Milei wants to dollarize the country rather than use a currency that doesn’t require trust in central actors as we’ve seen from Nayib Bukele in El Salvador. But I won’t play the party pooper role mere hours before Thanksgiving. I have no idea how this experiment is going to end. But I’m obviously rooting for the success of Argentina.