This story encapsulates a lot of why I have no patience for politicians who are cryptocurrency-curious:
Shan Hanes, the former CEO of the Kansas Heartland Tri-State Bank, was sentenced to 293 months (24 years, 5 months) imprisonment after pleading guilty to embezzlement by a bank officer. Hanes had fallen for a “pig butchering” scam, where he believed he could earn returns by “investing” funds under the bank’s control into a cryptocurrency scheme.
Between May and July of 2023, Hanes transferred $47.1 million of the bank’s funds to the fraudulent scheme. This ultimately led to the bank collapsing, with equity investors losing $9 million and the FDIC footing the bill. “There were people who lost 70, 80% of their retirement” as a result of their investment losses, stated a community member.
Hanes had also taken money from a local church, an investment club, and his daughter’s college savings. These funds were reportedly used to buy cryptocurrency after those running the scheme told him they needed more money to “unlock” the returns on his investments — a common tactic with these scams.
Elkhart, Kansas, where this bank was located, is a community of 1,888 as of the last census. This NBC News story on Hanes’ crime has a lot of detail on how he lied to friends, neighbors and co-workers to enable the almost $50 million transfer of funds. Also, this guy is in his mid-50s and that’s federal time, so he’ll be an old man before he’s out.
A “pig butchering” scam is apparently one where the “pig” (mark) makes an initial crypto investment and is then enticed to make others to “unfreeze” or “unlock” the initial investment (this is the “butchering”).
Anyway, the key point here: because it was all cryptocurrency, the funds were never recovered and the scammers were never caught.
Democrats should leave cryptocurrency and its bastard cousin, NFTs, to the Trumpers, but since the crypto-bros can throw around so much money, the temptation will always be there.
(This story is from Molly White’s site, which is a just chock-full of crypto fail.)
Baud
HinTN
There’s a fool born every minute but that bank should have had far better protection against one person’s perfidy.
cain
Hedge funds are getting into the act as well.
These folks are looking to increase their wealth at the expense of everyone else.
HinTN
@Baud: Not surprising. Folks should notice that they pay in good old legal tender send not crypto.
HinTN
@cain:
In other news, the sun rose again in the east this morning.
Anoniminous
Crypto is just another product from SillyCon Valley, grifting money from the rubes.
AI also too ditto.
Mr. Bemused Senior
Chump change.
Cryptocurrency is a scam. Period.
Machine learning is not a scam, but the hype is excessive.
lowtechcyclist
Fuck Citizens United, and fuck John Roberts and the rest of his gang who ruled the way they did.
ETA: In reply to Baud @1.
Gvg
This is why I was a hard no on Nikki Fried for Democratic candidate for Governor in 2022 and went with Christ. She was somewhat of a crypto supporter. I hope she has wised up because a lot of people like her. Haven’t heard her say anything about it in a long time.
rikyrah
@Mr. Bemused Senior:
Scam
Scam
SCAM
SCAM
S-C-A-M
😡😡😡
Anoniminous
Looks like fun. Not as a LARP ‘tho. Of course: YMMV.
BR
I was unhappy that the crypto PAC spent so much money here in CA attacking Porter and helping Schiff in the senate primary — they were the single biggest spenders in the primary, and they got what they wanted.
Albatrossity
Crypto is an ideal way to launder and/or hide money. That’s why it is beloved by criminals such as the modern GOP.
Ruviana
Excellent description of pig butchering in the completely excellent book Number Go Up.
chris green
Every large scale “ransomware” attack is the fault of kleptocurrency. It solved the “problem” for extortion – how do you collect the money without getting caught.
David 🐝KHive🐝 Koch
he should have invested in something solid like tulips or credit default swaps
Phylllis
@Ruviana: Agreed on Number Go Up. Incisive takedown of Sam Bankman Fried and his grifting, lying parents as well.
Amy!
Is that the “before” picture from that Tenth Doctor in the Library (on the Library planet, I guess, more accurately) episode? Because I’d rather see “after”. I mean, I’d even do a thumbs up and grin, for that.
MattF
@Ruviana: By Zeke Faux. Recommend highly.
Redshift
@Mr. Bemused Senior:
Machine learning in general isn’t, but most of the LLM craze is, in that there’s no indication it will ever make the tech business model transition from “giving it away for free to build a user base” to “selling it to make a profit,” since the operating costs are so high.
Harrison Wesley
Kansas Heartland Tri-State Bank? Isn’t that from one of the really early Firesign Theater albums?
TBone
Relatedly, fElon Skum to be in the new Dept. of Government Efficiency (DOGE), deciding what programs can be cut (facepalm):
https://digbysblog.net/2024/09/02/its-not-just-project-2025/
Tony Jay
@Amy!:
I think it’s Stench modelling the ‘Rings of Uranus’ man-girdle. What you can’t see are the M C Hammer sized leg-balloons where his clotted bulk has been squeezed down.
Math Guy
Investing in crypto = paying good money for waste heat.
Soprano2
Crypto is only good for committing crimes. I feel badly for those people who lost their money in what sounds like an affinity scam. In a small town like that you know everyone. People probably trusted him automatically.
I just got a message from a childhood friend that her mother passed away today. 😥 She was in her late ’80’s, or maybe even 90, so not unexpected, but still sad. She and my mother were pregnant at the same time; my sister and her sister were born 4 days apart. Talk about friends who were thick as thieves, that was her sister and my sister.
trollhattan
@TBone: He’s now got his hands full with Brazil and France (by extension of their Telegram dude arrest.)
Funny how the “inalienable human right to free speech” is hauled out by these billionaire autocrat worshipers.
trollhattan
@Math Guy: I would host a crypto/AI server farm in my basement from October through April, provided they paid my electricity bill. House would stay nice and toasty!
Jeffro
Crypto should be outlawed. It’s good for nothing but scams, money laundering, and making climate change even worse.
Chet Murthy
@Jeffro: You left out international espionage and subversion.
Michael Bersin
Things my parents/family friends/teachers/community taught me back in the stone age. Confirmed throughout my life.
1. We’re not wealthy. We never will be. Neither will you.
2. If it’s too good to be true, it isn’t.
3. If someone suddenly decides they’re your new best friend, put your hand on your wallet.
4. Treat others who have less than you with respect, kindness, and generosity. We were there once and we could easily be there again.
5. Republicans do not serve people like us. They never will.
6. If you’re not at the table, you’re on the menu. Vote. In. Every. Election.
Parfigliano
@Soprano2: Fools and their money…
Capri
The Youtube video essay – “Line Goes Up” by Folding Ideas is another great explanation of the whole crypto scam.
Snarki, child of Loki
@David 🐝KHive🐝 Koch: “he should have invested in something solid like tulips
or credit default swaps”That’s for investment purposes. For currency, my preference is GIANT STONE WHEELS.
At least you can crush MAGAts under them, so they they’re definitely valuable.
columbusqueen
@Jeffro: Agreed. You’d be better off trying to use Monopoly money.
PaulWartenberg
Can we just lock down our banking and investing firms and hedge funds for like a 8-month period while we send every Treasury and FBI agent on hand to hunt these cryptocrooks down?
West of the Rockies
Trump is a dead ringer of Moe Howard in some photos. I long for the day when every photo of him can be referred to as historical (as in past tense). Am I allowed to say that?
lowtechcyclist
@Harrison Wesley:
I have their first four albums (Electrician, How Can You Be…, Dwarf, Bozos) and I’m pretty sure it’s not on any of them. Maybe Dear Friends? Haven’t listened to that in forever. If it’s not on a Firesign album, it should have been.
Bill Arnold
Two things:
– Current cryptocurrencies are not untraceable; it’s just that there a fewer rules. Every transaction is recorded in a very public consensus ledger. The transactions can be done by anonymous parties; the conversion to real/generally accepted money is harder to do anonymously, though. But yeah, e.g. ransomware would be much harder to monetize without cryptocurrencies, coupled with crime-friendly governments, like the Russian Federation.
– Pre-bitcoin, there was vigorous discussion amongst digital money designers about actually cash-like digital money, that is (in theory) anonymous. Bitcoin and the other current cryptocurrencies ate that mind-space, but it’s coming back a bit, which is good, IMO. Societies need a way to perform anonymous financial transactions; a fishbowl economy is the opposite of “mind your own business”, the new motto of the Democratic party (yay!). There will always be activities which are good or neutral that societies/governments forbid; they need room. Methods like credit cards (or gift cards) bought with cash at a store are a poor substitute; e.g. there are cameras and archived surveillance videos.
–
John Finkbiner
I am not at all an expert here, but I have read some short articles and watched a video about pig butchering. As I understand it “pig butchering” is a type of long(ish) term affinity fraud. The metaphor is raising hogs — a piglet is barely a meal, but after a few months of careful nurturing, it is ready to be slaughtered for far more meat.
The scammer will initially try to bond with marks over texts or some other communication service. The scammer will pretend to have something in common with the mark. Initially, they will simply seem to a friend who has the same hobby or comes from the same place or is also new to the neighborhood or whatever. After a while they might bring up some investment they are making: “I just cashed in some of my Beetlecoins and bought a new car.” They won’t necessarily ask for money, but of course they will be very helpful in helping their friend set up his own investment.
Exactly how the scam ends depends on how the relationship develops.
catclub
@Ruviana: Also it is the scammers who enslave their ‘workers’ that support Tether. They are the use case.
As made horrifyingly clear in Number Go Up.
catclub
Douglas Adams in HHGTTG for the win.
artem1s
Speaking of suckers born every minute. VISA is offering a ‘conservative’ credit card call Coign – being advertised on the wrap up to the baseball game I’m listening to on a very conservative AM station feed on MLB.com.
Coign is America’s first credit card built by Conservatives for Conservatives. Coign was created to advance conservative values and embrace the American spirit. We align your dollars with your values. Unlike other leading credit cards, that give millions to the Left each year, Coign is helping Conservatives to align their dollars with their values. We’re proud that the dollars you spend are invested in Conservative causes.
As if the dollars being spent on their VISA isn’t co-mingled with Lie-iberal dollars. Suckers.
Ihop
Please forgive me, it might have been a bit of mustard or an under done potato, but didn’t the orange fuckbag say he wanted to put 47 quadrillion of federal funds (ours) into crypto recently?
Responsible government.
kindness
Cryptocurrency isn’t any kind of actual thing. Crypto is buying a belief. A belief that a made up something has value and can be bought and sold. Based on belief.
There are 20 suckers born every day.
Mr. Bemused Senior
@lowtechcyclist: I know of the Chemical Corn Exchange Bank.
Gloria DryGarden
@BR: I didn’t know this was why Katie porter may have lost. She has been a treasure, in congress. That sucks.
wjca
@Bill Arnold: Societies need a way to perform anonymous financial transactions
We have that already. It’s called cash.
H-Bob
@Mr. Bemused Senior: Chemical Corn Exhange Bank — do they distribute candycorn?
ANITA
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