Business
Commentary: Crypto promoters saw Trump as their savior. Then reality set in
With Donald Trump’s election as president, the cryptocurrency community saw blue skies ahead.
The election sent the price of bitcoin to a record high, exceeding $75,000. After all, during the campaign Trump had vowed to make the U.S. the “crypto capital of the planet” and to create a “strategic reserve” of bitcoin. He and his family members formed World Liberty Financial, a crypto trading firm.
Within three days of his inauguration, Trump issued an executive order promoting the expansion of crypto in the U.S. He denigrated enforcement efforts by the Biden administration as reflecting a “war on cryptocurrency.”
Bitcoin and other crypto assets are once again demonstrating that they are among some of the first assets to decline among broader economic uncertainty.
— Molly White
On the second day of his presidency, he pardoned Ross Ulbricht, the boss of a notorious online black market in which transactions were conducted in crypto. Ulbricht, who had become something of a hero to crypto promoters, was serving two life sentences at the time. In July, Trump signed the so-called GENIUS Act, which dilutes consumer banking protections involving stablecoins, a crypto token.
Last year, the FBI labeled crypto a hive of “pervasive” criminality. Under Trump, things are likely to get worse. Since Trump took office, the Securities and Exchange Commission has closed or deferred 18 cases or investigations related to cryptocurrency firms.
Yet despite all these tailwinds from the White House, federal agencies and a compliant Congress, cryptocurrencies are having one terrible year. The price of bitcoin closed at a record $124,752 on Oct. 10 but has since fallen to about $87,845. That’s a stomach-churning loss of almost 30% in just six weeks.
Since Trump’s Jan. 20 inauguration, bitcoin has lost more than 11% of its value. In the same period, the stock market, as measured by the Standard & Poor’s 500 index, has gained nearly 12%. To the question of who is getting rich on crypto in the Trump era, the answer thus far is: Trump, his family, and their friends. Everyone else has been taken to the woodshed.
Why has this happened?
To a certain extent, it’s a confluence of factors, not all of which can be blamed on Trump. But his economic policies, including his on-and-off-again tariff announcements, have certainly accounted for some of the notable crypto downdrafts of the last 11 months. Other geopolitical developments haven’t been friendly to crypto.
Another important factor is the growth of leverage in crypto accounts — users borrowing against their crypto holdings like stock investors buying on margin, a practice that can magnify gains in rising assets — but also magnify losses.
Let’s take a closer look at crypto’s terrible, horrible, no good, very bad year.
The first slap in the face with a wet fish came for crypto on Feb. 21. That’s when the crypto exchange Bybit, which is sometimes counted on the second-largest crypto exchange in the world, lost $1.5 billion in crypto tokens to hackers — “the largest cryptocurrency heist in history,” by the assessment of the Center for Strategic and International Studies, a Washington think tank. The FBI promptly traced the exploit to North Korea.
Trump can’t be blamed for the Bybit hack, but Trump’s weakening of America’s cyberdefenses doesn’t bode well for the future.
According to the Cyberspace Solarium Commission, a congressionally established body tasked with overseeing cyberdefense, Trump’s “cuts to cyber diplomacy and science programs and the absence of stable leadership at key agencies like the Cybersecurity and Infrastructure Agency (CISA), the State Department, and the Department of Commerce” have resulted in the country’s ability to protect against cyber threats “stalling and, in several areas, slipping.”
That’s especially important when it involved North Korea. According to many experts, the rogue state has made up for its exclusion from the global economy by creating an alarmingly effective cyberhacking program.
Since 2017, North Korean hackers have stolen more than $5 billion in cryptocurrencies, as calculated by the cybersecurity firm TRM Labs. The North Koreans have not only made their thievery more efficient, but have also refined their money-laundering techniques to the point that the stolen booty disappears into the dark reaches of cyberspace within days.
This has undermined the crypto camp’s claim to offer users secure access to their funds. Crypto’s reaction to Trump’s economic policies has undercut the promoters’ claim that their asset class is a remedy for economic turmoil in the outside world.
“Bitcoin and other crypto assets are once again demonstrating that they are among some of the first assets to decline among broader economic uncertainty,” the indispensable crypto observer Molly White wrote in March, after Trump’s tariff threats and fears of higher inflation provoked a three-day slide of 12.6% in bitcoin—the worst downdraft since the bankruptcy of FTX in 2022. Bitcoin fell nearly 10% in the four days after Trump announced his “reciprocal tariffs” on April 2.
Another selloff erupted on Oct. 10, the day Trump abruptly announced new tariffs on China. That day became labeled “crypto’s Black Friday,” as crypto exchanges forced the liquidation of some $19 billion in leveraged holdings in 24 hours. Bitcoin lost $10,000 in value in a matter of minutes.
As White observed, the downdraft was frenzied in part because the crypto market lacks the circuit breakers installed in the stock and bond markets, which automatically halt trading before a selloff can gain steam, allowing traders and market makers to catch their breath. Nothing like that stands in the way of a tsunami of account liquidations by thinly-regulated crypto brokers.
Since then, the selling has continued almost unabated. At midday Wednesday, bitcoin has recovered by about 2.8%, but it is still appreciably lower than its price on Jan. 1 or on Inauguration Day.
Market observers say that institutional investors as well as small retail investors all have been bailing on crypto. Over the last year, banks and other financial services firms have made it easier for small investors to buy crypto — exchange traded funds and firms that have constructed themselves as crypto treasuries have proliferated.
But those devices also make it easier to sell. Investors have withdrawn an estimated $3.5 billion from crypto ETFs so far this month. The publicly traded company Strategy, the business model of which is to accumulate bitcoin, has lost some 60% of its value since mid-July.
Historical patterns suggest that the chief victims of the crypto selloff are small investors, however. They tend to buy into a stock or other asset when it is rising, and sell into a bear market (just the opposite of the buy-low, sell-high principle favored by experts). To the extent they were lured by the runup in crypto prices, they may be holding the bag just now.
That points us to the likely winners in the current crypto cycle: Trump and his circle. Trump in 2021 called bitcoin a “scam,” and in 2019 posted that the values of cryptocurrency were “based on thin air,” but he “has now warmly embraced its supposed virtues,” as federal Judge Jed S. Rakoff, who has presided over lawsuits alleging crypto-related fraud, recently wrote.
Consider World Liberty Financial, which was co-founded by Trump and his offspring Eric, Barron and Don Jr. (Trump himself is listed by the company as “co-founder emeritus,” a designation he acquired upon taking office as president.)
World Liberty’s fortunes have benefited from reported actions by Binance, the largest crypto exchange in the world. Earlier this year, Binance accepted a $2-billion investment from an Abu Dhabi-based investment firm to be paid in USD1, the dollar-linked “stablecoin” marketed by World Liberty. The acceptance of USD1 as a crypto token has added to its value, and therefore to the financial gains enjoyed by the Trump family.
On Oct. 23, Trump pardoned Binance founder Chengpeng Zhao, who had served a four-month term in U.S. prison and was fined $50 million after pleading guilty to violations of U.S. anti-money laundering regulations. Binance also pleaded guilty and paid more than $4.3 billion in settling the criminal case.
Asked during a Nov. 2 interview on “60 Minutes” why he pardoned Zhao, Trump replied, “I know nothing about the guy, other than I hear he was a victim of weaponization by government. When you say the government, you’re talking about the Biden government.”
I asked the White House whether Trump’s involvement in crypto while he held authority over crypto regulations amounted to a conflict of interest.
I received an emailed response from Trump spokeswoman Karoline Leavitt, who wrote, “The media’s continued attempts to fabricate conflicts of interest are irresponsible and reinforce the public’s distrust in what they read. Neither the President nor his family have ever engaged, or will ever engage, in conflicts of interest.”
The truth is that bitcoin investors may have less to fear from Trump’s dabbling in crypto than in the shortcomings of crypto itself as an asset class. As I’ve reported before, unlike almost any other asset, crypto tokens are untethered from anything of concrete value. That doesn’t mean that crypto will periodically drive higher, only that when holders are running for the exits, there may not be a discernible floor to how low it will go.
Crypto tokens don’t throw off interest or dividends. Their prices aren’t based on even a theoretical value of issuing enterprises such as corporations, municipalities or federal agencies. As commodities, they resemble collectibles like Beanie Babies, with values derived from the “greater fool” theory — that someone is out there willing to pay more than your acquisition cost to take them off your hands. That’s a path painted in red.
Business
Waymo reports teen riders for bad behavior and delivers them to the police
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
Business
Orange County real estate investor pleads not guilty in $100 million bank fraud case
An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.
Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.
He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.
Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.
Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.
A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.
Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.
In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Prosecutors sought to hold Makhijani without bail after his arrest.
The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.
The request was denied and he was granted $500,000 bail.
However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.
The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.
Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.
The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.
Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
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