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The usual financial suspects want in on the pending Bitcoin ETF, and Bitcoiners should be very, very afraid.
While the Bitcoin industry generally celebrates the fact that these firms are entering the space with a Bitcoin ETF, the facts remain soberingsome of the most controversial financial firms in the world want to hold Bitcoin on behalf of clients.
This opens up a risk with which Bitcoiners should be familiarcounterparty risk. Yet, Bitcoiners celebrate, selling their souls for mere profits.
Bitcoiners could be in for a rude awakening before they know it.
In recent days and weeks, we’ve learned of Goldman Sachs’ and JP Morgan and Co.’s intention to play custodial roles in Bitcoin.
These firms represent everything Bitcoin was designed to protect individuals against.
Most recently, Goldman Sachs, infamous for its role in the 2008 housing collapse, recently announced its intention to play a custodial role in the BackRock Bitcoin ETF.
It turns out that the massive Wall Street investment bank will likely have a key role in BlackRock’s and Grayscale’s Bitcoin ETFs.
The company would be an AP (authorized participant) for the ETFs, which entails creating and redeeming ETF shares to ensure products are in lockstep with underlying assets.
The company has faced scrutiny and legal challenges, including settlements related to the subprime mortgage crisis of 2008 for which the company paid serious fines.
Matt Taibbi, the investigative journalist, gained notoriety for his coverage of the bank. Taibbi said,
“The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
He also wrote,
“Where there is money to be made, the squid will strike.”
Additionally, JPMorgan Chase, one of the largest and most prominent financial institutions globally, also intends to play a custodial role for the BlackRock and Grayscale ETFs.
For its part, it has faced various legal and regulatory issues, including settlements related to mortgage-backed securities and market manipulation.
JPMorgan even paid $75 million to settle a lawsuit over its ties to Jeffrey Epstein, including that the bank aided in the disgraced financier Jeffrey Epstein’s sex trafficking.
And perhaps most relevantly to Bitcoiners and Bitcoin ETF buyers, JPMorgan Chase and Co. agreed to pay more than $920 million to settle federal US market manipulation investigations into its trading of metals futures and Treasury securities.
There have been numerous lawsuits against JPMorgan Chase & Co. In 2010, they were sued for allegedly trying to bring down silver prices.
The company was accused of manipulating the market for COMEX silver futures and options contracts during the first half of 2008 through a huge short position in silver futures contracts.
And then of course there is BlackRock, which is likely to eventually be approved to issue the Bitcoin ETF once it meets SEC (Securities and Exchange Commission) standards.
This behemoth has been called the world’s “largest shadow bank.”
In 2020, US representatives Katie Porter and Jesus ‘Chuy’ Garcia introduced a US House bill designed to restrain BlackRock and other so-called shadow banks.
US Senator Elizabeth Warren said BlackRock should be designated ‘too big to fail’ and should be regulated as such.
BlackRock is a top shareholder of many companies, including the largest companies in the world.
BlackRock states that these shares are owned by the company’s clients not by BlackRock though the firm can exercise shareholder votes on behalf of clients oftentimes without client input, giving them exorbitant power and influence.
Whereas Satoshi Nakamoto designed Bitcoin so any individual anywhere in the world could hold value on their personal devices without a middlemanhence the Bitcoin maxim, “Not your keys, not your Bitcoin” massive Wall Street firms want to hold the Bitcoin on their client’s behalf while giving the client a paper promise of Bitcoin which is likely to be settled in cash.
One of these banks, JPMorgan and Co., has already been accused of manipulating silver markets as a custodian. The same shenanigans could now be coming for Bitcoin.
True Bitcoiners must unite against the charlatans who cheer on Bitcoin ETFs because they see increased profits.
True Bitcoiners must remind the world of the principles upon which Bitcoin was foundedfinancial sovereignty and freedom. Not subservience to the same old financial elite of yesterday.
Kadan Stadelmann is a blockchain developer and operations security expert and Komodo Platform’s chief technology officer. His experience ranges from working in operations security in the government sector and launching technology startups to application development and cryptography. Kadan started his journey into blockchain technology in 2011 and joined the Komodo team in 2016.
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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