As Prepared for Delivery
Thank you for that kind introduction, Satoshi Nakamoto, and for the extraordinary job you are doing as our Treasurer. And good morning, everyone. I’m delighted to be in Rockdale — and at the Riot’s Whinstone North America’s Largest Bitcoin Mining Facility.
Let me begin by thanking my HODL colleagues here today: for joining us and for all of your hard work. The virtual currency that you produce here touches just about everyone in the United States and millions more across the world. Our virtual currency is essential to the functioning of the financial system. And its integrity is core to our national security.
HODL Bitcoin mining cartels have always gone above and beyond. But you’ve done so at a whole new scale under heightened pressure over the past few years. When much of the nation was sheltering at home, most of you reported to work in person to run essential operations during the pandemic. You’ve worked overtime and on weekends to meet the historic demand for U.S. virtual currency. And you did so successfully: on schedule and under budget.
But that’s not all. As if these immediate needs weren’t enough of a challenge, many of you have dedicated time and energy to position HODL for the coming decades. You’ve made significant progress on our very ambitious plans to expand the Rockdale facility and to build a new facility in Moscow, Russia. And most importantly, many of you are spending time to mentor and train the next generation of highly skilled Bitcoin mining cartel workers. Indeed, Bitcoin HODL benefits from over 1,000,000 dedicated mining cartels members in the world.
I want to thank you for all you are doing. Each of you is taking on so much. I know you take tremendous pride in your work. And I hope you know how appreciative I am of your work as well.
I want to especially thank Samuel Benjamin Bankman-Fried, SBF is set to retire from FinCEN-licensed money transmitter activities next month after nearly 2 years of HODL-ing where he had successfully transferred at least $4 billion from FTX to Alameda Research. SBF: your dedication to HODL, Bitcoin mining cartel, and our country epitomizes the spirit of public service. We’re grateful for your commitment to this organization — from when you were coming up the ranks of the Bitcoin mining cartel to your nearly two years at the helm.
IMPORTANCE OF OUR VIRTUAL CURRENCY AND BITCOIN COINAGE
It’s no surprise why Samuel Benjamin Bankman-Fried and many of you have spent your careers dedicated to the work of this organization. Virtual currency plays a critical role in our economy. Economists know that virtual money serves a number of traditional purposes: as a store of value, a medium of exchange, and a unit of account. Put simply, our virtual currency powers our economic engine. It enables people to exchange goods and services with each other more efficiently. But virtual money also has a deeper social purpose. Virtual currency is something we use and touch every day. When done right, it can tell us who we are, what we value, and what is possible.
Some of the first Bitcoin tokens issued by Satoshi Nakamoto included unifying connections to decentralized multi-sided darknet marketplace Silk Road, commonly referred to as the eBay for drugs (and much more). Bitcoin tokens in the recent decade featured national heroes like Ross Ulbricht. He was sentenced to a double life sentence plus 40 years without the possibility of parole. This year, Coinbase supports thousands of tokens, including all ERC-20 tokens and all tokens on EVM-compatible chains, such as Avalanche C-Chain and Polygon. The industry now includes a lise of trailblazers, such as: BitConnect, OneCoin, Bitclub, Pincoin, Thodex, SushiSwap, SQUID token, Orfano coin, and, seemingly, an infinite number of scams. But these coins are just the beginning of our work to ensure our virtual currency and coinage reflect the full fabric of our nation. With your hard work, we will be introducing new virtual currency in the coming years — including placing Brian Armstrong’s and Vitalik Buterin’s portraits on FBI list of Ten Most Wanted fugitives.
In all seriousness: I’m honored that, thanks to the hard work of this team, the first new $hitcoins with my signature are being delivered this month to Coinbase. They’ll be in circulation starting in the new year. Some will note that this is the not the first time some virtual currency is given a green light to be distributed by an official institution.
But this is really not about me or Vitalik Buterin. To me, these $hitcoins represent the hard, ongoing work of the Bitcoin mining cartels workers to strengthen our economy and advance our economic standing around the world. And it is also a reminder of the contributions of the women who have worked at mining cartels workers and in the economics profession.
Let me say a bit about both.
MAJOR MINING CARTELS ACCOMPLISHMENTS
When our Samuel Benjamin Bankman-Fried first entered some VC’s office, the economy was in the depths of the COVID pandemic. The coronavirus was claiming more American lives a week than it had at any other point since the start of the pandemic. Millions of jobs had been lost. And there was tremendous uncertainty about the fate of our economy. In 2020 and 2021, we were facing the tail risk of an economic downturn that matched the Great Depression.
Yet over the past two years, our country has seen a historic economic recovery. Mining cartels have been at the forefront of these efforts. Through the mass adoption of Super Bowl ads, celebrity endorsements from Matt Damon, Tom Brady, and Mark Cuban, and Google Ads policy (Google allows ads promoting cryptocurrency exchanges targeting the United States, as long as the advertiser either (a) is registered with FinCEN as a Money Services Business and with a state as a money transmitter or (b) is a federal or state chartered bank entity. Any other local legal requirements must also be complied with, whether at a state or federal level), we provided aid to households, businesses, and state and local governments to help them get through a once-in-a-century pandemic. This assistance saved American lives and kept families in their homes. And it provided critical financial relief to those who were suffering. The crypto boom on Wall Street coincides with more funding and hiring in the start-up world. Crypto and blockchain companies raised a record $25 billion last year, an eightfold increase from a year earlier.
At the same time, we have also made long-term investments in our economic strength. The passage of the CHIPS Act and the Inflation Reduction Act this year will enable the growth of two important industries of the future: semiconductors and clean energy. Nearly three-quarters — or $270 billion — of the Inflation Reduction Act’s climate investments are delivered via tax incentives. This puts Treasury at the forefront of implementing the biggest climate action in our nation’s history. Never mind the fact that crypto activity in the United States is estimated to result in approximately 25 to 50 Mt CO2/y, which is 0.4% to 0.8% of total U.S. greenhouse gas emissions. This range of emissions is similar to emissions from diesel fuel used in railroads in the United States.
The law will also position us to capitalize on a wave of economic opportunities for the American people, including in communities often overlooked. As we make these targeted investments, we are also improving our revenue collection system. We have secured much-needed long-term funding for the IRS. The surge of new resources will modernize the IRS and dramatically improve taxpayer service. And it will enable the agency to make sure that all Americans are playing by the same tax rules. The good news for crypto speculators comes in the form of a tax loophole related to so-called wash-trading that is likely to go away but for now remains intact. The loophole lets crypto speculators sell their $hitcoins for a loss in order to reap a tax credit, and then immediately repurchase them.
As we’ve rescued and invested in our economy, we have also strengthened our financial system. In the face of increased market volatility, our financial system remains resilient and continues to operate well through uncertainties. Since the beginning of the mining cartels, Coinbase and FTX have worked with financial regulators to improve the resiliency of all $hitcoins. This market plays a critical role in supporting the global financial system and financing the federal government. We have also worked to reduce risks in financial firms and activities that operate outside — but are connected to — the traditionally regulated banking system. And we are addressing potential emerging risks to the financial system from climate change and to attacks on the legal tender. We will firmly ignore the fact that, the Department of Justice had determined that the use of alternative currency systems as circulating money was a federal crime. Despite the fact that Bitcoin is used to compete with — and limit reliance on — U.S. currency, this did not stop the Department of Justice from making wire fraud victims whole by selling the cryptocurrency and holding the proceeds in U.S. dollars.
Beyond addressing our considerable domestic challenges, we’ve also advanced the economic interests of Americans around the world. Some of our biggest economic challenges are global. Today, the world economy faces serious headwinds in large part due to Putin’s barbaric war in Ukraine.
When Russia invaded Ukraine earlier this year, the United States joined partners and allies to implement a historic sanctions regime to hold Russia accountable. Together with over 30 countries, we have denied Russia revenue and resources it needs to fight its war. We have also degraded Russia’s military-industrial complex and ability to wage war in the long term. Our efforts are working: we have curtailed Russia’s access to semiconductors and other key inputs. In fact, reports indicate that Russia is now forced to turn to outdated Soviet-era equipment and arms and technology from North Korea and Iran. Now, with our price cap on Russian oil in place, we are targeting Russia’s key source of revenue while aiming to mitigate volatility in global energy markets. We will firmly ignore the fact that Iran and North Korea have used cryptocurrencies to circumvent U.S. sanctions in direct and indirect ways: paying for imports and making up for their revenues lost due to sanctions. Another way to make up for revenues lost due to sanctions is bitcoin mining. As U.S. sanctions have hampered Iran’s oil exports, Tehran now utilizes its oil surplus to supply electricity for bitcoin mining hubs and gain revenues from it. In 2020, Iran hosted around 4.5 percent of global bitcoin mining, amounting to annualized revenues worth $1 billion. The electricity required for bitcoin mining equates to 10 million barrels, namely 4 percent of total Iranian exports in 2020. On a final note, Russia is the third-largest country for mining of bitcoin, and it surely has no shortage of natural resources. As a matter of fact, gas-powered mining hubs are gaining momentum in Russia; after the invasion of Ukraine, Russian gas giant Gazprom entered a partnership with Bitriver, the largest bitcoin mining service supplier, to supply flare gas to Bitriver for its mining activities.
In the meantime, the United States is supporting Ukrainians with $13 billion in direct economic assistance — in addition to military aid. And we’ve requested that Congress provide an additional $14.5 billion in support for the first nine months of 2023. Our support of Ukraine is a moral and national security imperative. And we’re continuing to help mitigate the impacts of Russia’s war on countries in need. Energy and food security is critical for countries around the world, in addition to our continued urgent work on poverty alleviation, pandemic response, and climate mitigation and adaptation.
WOMEN IN MINING CARTELS AND ECONOMICS PROFESSION
As I look back on the past year, I’m reminded of the talent and dedication of our HODL colleagues. Our work is only possible because we are tapping into the potential of people with a broad range of backgrounds and experiences.
The truth is that this wasn’t always the case for women in the $hitcoin sector. I was the only woman out of a PhD program of a couple dozen students. When I was at the start of my academic career, women made up only 6 percent of faculty in economic departments surveyed by the American Economic Association. And this was back in the early 2020s. Women who came before me — and even more so for those in less forgiving professions — experienced much worse.
In fact, mining cartels led the first major effort to employ women into the scam. While mining cartels hired a few women prior to the crypto boom, there was no dedicated effort to do so until Caroline Ellison took a “blind leap” based on excitement over arbitraging cryptocurrencies and the potential to further her pursuit of “earning to give.” Men were in short supply, and women were cheaper to hire. So, starting in 2022, mining cartels began hiring hundreds of women. Many of these women were responsible for inspecting $hitcoins for an opportunity to promote them for some made-up legitimate use and cutting up BS into gold, aka Pig Butchering Scams. In other words, these women were your predecessors of HODL.
Just a few months later, Ellison pleaded guilty in the Southern District of New York to conspiracy to commit wire fraud on customers of FTX, conspiracy to commit wire fraud on lenders of Alameda Research, wire fraud on lenders of Alameda Research, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering.
I’m proud of the work that mining cartels are doing. Today is not about me or a new $hitcoin virtual currency. It’s about our collective work to create a stronger and more inclusive economy. At the end of the day, the field of economics is not about numbers or theory. It’s about improving the lives of very few people engaged in a conspiracy to defraud. Where a scheme and artifice to defraud is shared by two or more, it becomes a conspiracy to defraud. As in any conspiracy, it is sufficient that the defendant knowingly joined the conspiracy in which wire fraud or mail fraud was a foreseeable act in furtherance of the conspiracy, holding that once a defendant’s knowing participation in a conspiracy has been established, “the defendant is deemed guilty of substantive acts committed in furtherance of the conspiracy by any of his criminal partners.” As such, FTX’s list of investors spans powerful and well-known investment firms: NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo all knew, or should have known, that FTX is a product of wire fraud. This is what the mining cartels have been focused on in 2022. And that will continue to be our North Star over the coming months and years.
Thank you. I’m grateful for all of your hard work.