This is Not What Crypto Is For. And Yet It Is.

An ingenious way of escaping corruption in a developing economy turns out to be a foolproof way to engage in it as the President of the United States. It's one of many lessons technology has for us.

Programming note: I’m just back from my first-ever trip to Brazil, which I’m going to be discussing endlessly this week on my TikTok channel, and which I covered a bit for Don Lemon’s YouTube channel last week. Brazil turns out to be the kind of crossroads of geopolitics, surveillance technology, racist history, and the war between misinformation and journalism that gets me GOING, so you’re likely going to hear quite a bit about it, and if you have any suggestions for people I can speak to about the situation in that country, I’d be very grateful. Email me here! In the meantime, I couldn’t help but dig into the President’s digital bribery dinner last week, because WOW.

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Let me start here with the weed business. Because the home of a professional cannabis grower is a museum of creativity in the face of risk.

I once went to Humboldt County, in far Northern California, to interview long-time growers for a possible documentary about making the transition from a life spent planting their crops in hidden locations to one fighting for survival in an open, newly legal market. Their secrecy is legend — we met one grower whose cannabis was planted in hanging platforms in the redwoods, and everyone we met had their own fleet of backhoes, pavers, and cement trucks so they could maintain their miles of private roads without having to bring in outsiders — but it was the sheer quantity of cash in their lives that really grabbed me.

Weed being illegal for as long as it was, the large cash payments they received for their crops were undepositable in a bank, which meant having to conduct their lives, and their businesses, entirely in cash, and entirely in secret. How do you buy a backhoe with cash? I asked one of them. It’s simple, but expensive, he told me. Drive to Nevada (only a handful of airlines even take cash anymore), find a distressed construction company willing to sell you a used backhoe, and pay them $100,000 for a used piece of equipment they’ll report as selling for $50,000. "Every deal you’re over a barrel,” he told me. “And each dollar winds up being worth only half.”

So, back to the homes. Imagine the life of a pot farmer. Like any farmer, you’re in a business that requires constantly guarding or tending a crop, so you’re always at home. You’re awash in more cash than you can spend. You’re not exactly a go-out-and-join-a-choir kind of person anyway. And you’re a DIY genius. And so what do you do? You get way, way into a hobby.

I could have fixated on the safes everyone had, or the firearms and security systems for warding off would-be thieves. But it was the cash-amplified personal fixations that got me. One grower had a collection of dozens of vintage motorcycles and a full restoration garage, with original parts in from all over the world. Another had an entire recording studio stocked with every conceivable Western instrument. One particularly offbeat grower had built and mastered an array of pyrotechnic equipment that could have supplied the Super Bowl—machines that blasted columns of fire high into the sky, so hot they were painful to exposed skin from thirty feet away.

And again and again in this world of constant legal risk and vaults full of cash, I encountered business cards scattered across coffee tables and office desks from various crypto companies. Everyone was ruminating on the possible financial salvation that crypto represented. An untraceable way of turning suspicious quantities of cash into digital wealth, no bank involved? It’s just what these folks had always wanted.

I often interview technology people who are clearly creating something that will be misused. AI voice impersonators. Childcare robots. Drone networks designed to take air command of a city. And when I ask them, as I always do, whether creating this technology should also require of them that they create the rules and morals that go with it, I generally get the same response: that’s democracy’s job, not mine.

Palmer Luckey, founder of military contractor Anduril, once lamented to me that China was exporting its values through the vast surveillance systems it was selling to governments around the world, and that America had no answer. How would we sell an alternative, I asked him, one that embodied American ideals instead? He thought for a while.

“I think the way is not through technological control. It’s not to not have the technical capability. It’s to have the political wherewithal to say, ‘Yes, we know the tech exists to do this. But you can’t. We’re not going to accept that as a society.’”

The political wherewithal around cryptocurrency evaporated entirely last week, when President Trump’s businesses took in $148 million in digital bribery. For weeks, a crypto project tied to the president advertised a dinner at his Virginia golf club that promised access to the president for those who put the most money into his personal $TRUMP memecoin. On Friday, hundreds arrived in limousines and Lamborghinis to buy their way into time with the President.

The White House kept the guest list private, but a few people went ahead and outed themselves anyway. Justin Sun, a crypto mogul born in China, was, until recently facing fraud charges from the Securities and Exchange Commission. The agency recently paused his case. On Friday he admitted to having been the number-one $TRUMP buyer in attendance. “As the top holder of $TRUMP and proud supporter of President Trump, it was an honor to attend the Trump Gala Dinner…Thank you @POTUS for your unwavering support of our industry!” CNBC reports that Sun has put $22 million into $TRUMP, and another $75 million into World Liberty Financial’s coin.

Federal law — Section 201 of Title 18 — defines two illegal ways someone might seek to buy favor from a public official:

If the connection is causally direct - if money was given essentially to purchase or ensure an official act, as a "quid pro quo" then the crime is bribery. If the connection is looser - if money was given after the fact, as "thanks" for an act but not in exchange for it, or if it was given with a nonspecific intent to "curry favor" with the public official to whom it was given -then it is a gratuity.

Both fall technically under a bribery statute, which Article II Section 4 of the U.S. Constitution, of course, specifically mentions as grounds for removing the President:

The President, Vice President and all civil Officers of the United States, shall be removed from Office on Impeachment for, and Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.

And a Bloomberg analysis of the digital IDs associated with each $TRUMP holder at the dinner suggests that the event blew right through the foreign emoluments clause of the Constitution, which prohibits federal office-holders from accepting money from foreign powers:

All but six of the top 25 holders who have registered on the website's leaderboard used foreign exchanges that say they exclude customers living in the US. More broadly, at least 56% of the leaderboard's top 220 holders used similar offshore exchanges. The prevalence of these likely foreign buyers echoes concerns that congressional Democrats have expressed about the ethics of marketing the coin with a promise of presidential access. And it raises questions about how attendees at the promotional dinner, who are publicly identified only by three- or four-letter usernames they've chosen, will be vetted.

So what of the political wherewithal that tech founders assume will ride herd on all of this? On Sunday CNN’s Jake Tapper asked Republican Speaker Mike Johnson about the crypto dinner.

TAPPER: I really have a difficult time imagining that if this was a Democratic president doing the exact same thing, you wouldn't be outraged.

JOHNSON: Look, I don't know anything about the dinner. I was a little busy this past week...so I'm not going to comment on something I haven't even heard about. I'm not sure who was there or what the purpose was.

Later, when asked to compare Trump’s business dealings with allegations about President Biden and his son, Johnson essentially said bribery isn’t bribery if it’s done in broad daylight.

JOHNSON: The Biden crime family, as they were named, earned that title. Why? Because they used shell companies, fake LLCs, in what appeared to be money laundering operations...President Trump does everything out in the open.

Democrats are doing what they can. Senator Richard Blumenthal, ranking member of the Permanent Subcommittee on Investigations, opened a preliminary inquiry into Trump’s crypto-dealings after the crypto dinner was first announced, writing that “$TRUMP allows, and even invites, anyone in the world, including foreign governments and unscrupulous individuals, to directly enrich the President, while hiding potential payoffs in the pseudonymity of the blockchain.”

Photo by Iwaria Inc. on Unsplash

A very smart and very moral friend of mine was, for several years, deeply committed to the democratizing ideals of cryptocurrency. He explained to me that it represented a way for people in unstable nations to find safe financial harbor, and could conceivably help entrepreneurs around the world break through the corrupt monetary policy of their own countries and establish a new path to financial prosperity and personal freedom.

The whole idea of doing away with central banks and regulatory oversight is central to this promise. Decentralized finance would, in theory, make it possible to save, earn interest, and buy insurance without having to rely on your own country’s broken banking system, and without having to deal with potentially corrupt financial institutions and financial agencies.

But of course the very things that make decentralized cryptocurrencies so appealing to entrepreneurs seeking less friction in their lives are the very same things that organizations like the United Nations have warned will make them so appealing to anyone looking to hide and launder money:

Cryptocurrencies are anonymous at their point of creation therefore the placement stage of the money laundering process is often absent.

It only takes a few seconds to create an account (“address”) and this is free of cost. It is only possible to use each account twice: to receive money and then transfer it elsewhere.

It is possible to create a large money laundering scheme with thousands of transfers at a low cost and to execute it using a computer script.

Due to rapid increases in exchange rates, with some cryptocurrencies showing 10,000% growth, it is very easy to justify unexpected wealth through cryptocurrencies.

Technology entrepreneurs are fiercely devoted to the idea that if you can create a marginal improvement in enough people’s lives — a little less friction, a little more profit — then that’s a product worth building. “Marginal utility” has led us to some of the most breakthrough technologies of the last two generations. But it has also cast aside the idea that the creator of that technology should in any way restrain her- or himself from going ahead and building it, even in the face of a real likelihood that in some cases it will bring new and real harms into our lives.

I’ve written before about how callous this seems when you compare it to how hard other businesses — like, say, a bakery — work to avoid any possible harm their products might do.

The Edge Case is What Matters

And I hope that at the end of this administration we have learned some sort of collective lesson about the painful, dissatisfying, money-losing restraint it’s going to take to keep this country on the rails. Because it turns out that neither good intentions, personal morals nor political wherewithal are going to do that job for us.