TD Bank & Fentanyl
The American Dream
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Today’s edition is part of My Stories where I share vulnerable thoughts around my opinions in Finance.
Charts & Chit Chat will be the next edition coming out within a few days where I share Financial Data/Charts alongside quick takeaways that get right to the point.
After that is a weekly Video Post you can think of as a coaching call where I chat about whatever is most relevant over the last week.
For now, let’s get vulnerable.
The American Dream
What does TD Bank have in common with Drug Cartels?
Money, of course. Lots of money.
A couple weeks ago it was announced TD Bank will pay $3 Billion Dollars to settle fines related to money laundering.
Apparently the US Justice Department doesn’t want TD Bank working with Fentanyl Drug Dealers from across the border. Whoda thunk!?
Not TD Bank CEO Bharat Masrani I guess. He let it go down like Diddy at a freak-off.
It was reported that $670 Million Dollars was laundered through TD Bank Accounts. That’s only since 2018 though, and that’s only the number that was reported.
You know how that goes.
This $3 Billion Dollar fine is estimated to be around 25% of the company’s profit for the year.
Apparently there has been a small reduction in pay for the head executives at TD Bank, but all that will do is downgrade their 74 foot yacht down to a 72 foot yacht instead.
The agony.
Rumor has it there was internal communication with clear indication that these executives understood they were laundering drug money through their bank.
You only live once though, right?
These executives did not lose their jobs, and they did not get any prison time.
Suit and tie guys rarely get into big trouble. They just get a slap on the wrist and they solve the problem by throwing money at the situation.
The suit and tie wins again.
A suit and tie is a clean look but it’s not really my style. I’ve always gravitated towards dressing like I’m in the comfort of my own home.
I like my privacy.
Crypto Dreams
Alexey Pertsev is another man who values privacy. He is (was?) a Tornado Cash developer.
Tornado Cash is a tool that helps enhance privacy when sending cryptocurrency transactions. When you use it, your crypto money gets mixed with other people’s crypto money, and it creates a big smoothie filled with bits and pieces of everyone’s crypto money.
For example, if you put 1 Bitcoin in you will get credit for taking 1 (different) Bitcoin out at any time, and you can send that Bitcoin to anyone or anything. It’s like a big mixer that’s constantly spinning and mixing the crypto money around.
Depositing and withdrawing from this mixer makes the crypto transactions harder to track across the blockchain, which therefore enhances privacy for the user.
Further depth on how the technology works and the pros and cons is beyond the scope of this article.
The point is, Alexey and the rest of the developers working on Tornado Cash were working to solve the issue of privacy on public blockchains.
Despite popular belief, transactions on the Bitcoin blockchain (and most) are not private. They are very easy to trace, and if you’re a criminal it’s very stupid to use Bitcoin to launder your money.
Pubic blockchains have public ledgers, that’s kind of the point of them.
Your Bitcoin is linked to some type of digital wallet, which is linked to some other type of digital identity for you based on what else your digital wallet has interacted with.
Maybe you sent money from your Bitcoin wallet to your Crypto Brokerage so you can cash out all the money you made. There's no name linked to your Bitcoin wallet, but you have a name and a bank account linked on file with that Crypto Broker though.
Criminal Dreams
Criminals don’t want their names linked to anything.
Criminals want to use Dollars, and institutions like TD Bank to help them hold those dollars with no questions asked.
You can’t trace where the Dollar came from in the bank either. $1 is $1, whether in the bank’s vault or on the computer screen in LaLa Land.
When you take money out of the ATM, it very well could be money that a drug cartel deposited with the bank. Those are drug dealing dollars you are holding in your wallet, sir.
If you think about it, a bank is nothing more than a Tornado Cash protocol for fiat Dollars.
We deposit money into the bank, and the bank takes it and mixes it up with all the other people’s money. At some point you eventually go back to the bank to get money, but they don’t give you the same Dollars that you brought them last time.
Heck, most times you don’t bring them Dollars. You bring them numbers on the screen from LaLa Land.
They mix all the Dollars and numbers together and they get randomly redistributed, the same exact way Tornado Cash mixes all the crypto money together and randomly redistributes it.
The Double Standard
Alexey from Tornado Cash wasn’t as lucky as Bharat from TD Bank though.
Alexey was arrested in August 2022 in the Netherlands on charges related to money laundering, specifically for his role in developing Tornado Cash.
This year he was sentenced to 64 months in prison.
Tornada Cash lives on with or without Alexey though. That’s how a decentralized protocol works. No 1 person or institution has control over it. The protocol is governed by code.
Alexey got 64 months in prison for writing computer code, but they called it money laundering.
Alexey’s punishment for money laundering is 5 years in prison, while Bharat’s punishment for money laundering is settling for a yacht that is 2 feet smaller than what he wanted.
We say that crypto protocols, crypto monies, and crypto developers like Alexey are bad, but we don’t say that banking institutions, fiat dollars, and bank CEO’s like Bharat are bad — even though there are a whole lot of similarities.
Not to mention, hard evidence that these bank executes are knowingly participating in money laundering schemes with criminals.
Alexey doesn’t know anything about anyone using the Tornado Cash protocol. He just knows how to write code and build software that people want. People use it as they please for what they please without Alexey's approval or denial.
So what’s the difference between Alexey and Bharat?
The difference is Bharat wears a suit and tie while walking into a top floor office in a skyscraper building a few days a week, and Alexey is just a nerd wearing glasses while on his computer for 18 hours a day from his home in the suburbs of Amsterdam.
The Suit And Tie Wins Again
The crazy thing is, just last year, TD Bank paid $1.2 billion to settle charges alleging its involvement in an infamous $7 Billion Dollar Ponzi scheme.
It was related to some guy named Allen Stanford from over a decade ago. He was selling CD’s from a bank in Antigua for several years, and TD Bank was the intermediary.
Typically bank accounts in Antigua should be a red flag to avoid, but banks don’t seem to care about red flags like that and I honestly can’t blame them.
I have a girl in my phone contacts right now named "My Lil Red Flag " and I pick up the phone every time she calls or texts.
I know I'm playing with fire and I don't care. Neither do the banks.
They more than likely know EXACTLY what’s going on, and they gamble on not getting caught because they know that even if they do get caught it will just be a slap on the wrist.
They pay a small “tax.”
It’s like when you do something wrong in the Mafia, like when one capo punches another capo in the face during a heated argument and wires his jaw shut. That’s a situation where the one capo might need to pay up some money to the other capo for his troubles.
These families have rules, and examples must be set. Show some respect and don’t embarrass the family — or be willing to pay up.
That’s exactly what all the banks are part of. They are one big family. One big Mafia type of familia.
The banks, the Justice Departments, the Treasuries, and the whole kit and caboodle.
It’s All One With Different Hierarchies
Most people like the idea of fitting in with the suit and ties, and I can kind of see the appeal. Who doesn’t want a little more money and a little more power?
This can be a slippery slope though, because too much money and power can hurt a man. Diddy can tell the bank CEO’s all about these slippery slopes of money and power.
Be careful who you sell your soul to, and what the real intentions of something might be.
Goldman Sachs has made headlines recently by predicting a 3% annualized return for the S&P 500 over the next decade, and it has caught the Finance troops by storm!
Will the suit and tie be right in 2034, or what do they have up their sleeve here?
What is the incentive of the bank analyst who wrote this research piece? How is that analyst positioned himself over the next 10 years?
Who knows.
I tend to like listening to traders telling me their actual positions rather than banksters telling me their theories and fairy tales.
Paul Tudor Jones is arguably one of the best traders/investors to ever live. For those of you living under a rock in this Finance industry, Paul Tudor Jones is one of these billionaire hedge fund managers that started in 1980.
He got more attention after predicting and making a killing in the crash of 1987.
Paul is known for his macro trading strategies, and this week he was on CNBC sharing some opinions.
When he talks, people tend to listen.
In the interview he mentioned, “I think all roads lead to inflation. I'm long gold, I'm long bitcoin, I think commodities are so ridiculously under-owned, so I'm long commodities. I think most young people find their inflation hedge via the Nasdaq, that’s also been great. I probably have some basket of gold, bitcoin, commodities and Nasdaq, something like that. And I own zero fixed income.”
Did he just say he owns Bitcoin!? And did he say it in the same sentence as he owns Gold!? And did he also mention that the Nasdaq is an inflation hedge!?
Omg.
I am finally starting to think like one of the best hedge fund managers of all time. That’s basically my thought process and long term investing framework.
There’s only one problem with it…
Paul was wearing a suit and tie when he said this.
I hope this doesn’t mean I’m gravitating closer to the suit and tie guys.
Maybe I can fall in the hybrid lane. Like a Mafia capo gangster.
They wear a suit, but the tie gets traded for gold jewelry.
So long to working from home in my underwear.
Time to put on some pants now.
I’ve graduated.
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Disclaimer: These are not recommendations and I am not a financial advisor. These are just my two cents, or two satoshis as the kids say. Remember to do your own homework before making any financial decisions. Also, keep in mind I usually have some personal investments in the things I discuss. Some things stated in this article could also be wrong.
Excellent piece. Banksters gonna bankster. Keep up the great work!
Sad fact of the world we live that we can’t prosecute banks for crimes in far too many cases. Wouldn’t want to take away their ability to bank. They just made a mistake and next time they know it will only be monetary so they won’t do it again. Duuuuhhh.