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Wednesday, February 6, 2019

Stateless Futures: Crypto, Quadriga, and Anarchy in Acapulco


Court photograph showing Quadriga's book-keeping system; incredibly, the published photograph reveals personal and business data. Image Source: Twitter via Reddit. You can follow updates from Quadriga here.

On the heels of the Dark Overlord 9/11 hacks and bitcoin ransoms, the primary and most reputable Canadian cryptocurrency exchange, QuadrigaCX, has melted down over the past two months after its missing 30-year-old CEO 'died' (or maybe, 'did not die') on 9 December 2018. He supposedly was the only person who had the passwords to the company's cold wallets. A dig into Quadriga reveals interests in charitable orphanages (human trafficking?), e-gold, and money laundering.

The crypto exchange has filed for court protection, which was granted by the Supreme Court of Nova Scotia. As of 5 February 2019, Quadriga has a 30-day stay of proceedings to stop lawsuits from its clients and account holders. The company has to find CAD $250 million in that time. Third-party observer Ernst and Young will oversee the process; they are publishing relevant documents here.




[Addendum: the above three tweets were added to this post on 7 February 2019, after the original publication date of the post.]

This case and a recent murder in Acapulco, Mexico reveal how tech-driven internationalism is faring as an alternative to globalism. The latter is growing out of older institutions, legal systems, governments and similar structures. The former is the Wild West: there are thousands of start-ups in the world which are trying to develop decentralized, scalable infrastructure based on block chain technology and smart contracts.

The real question is how these two worlds are contrasting and, more surprisingly, colliding. They are becoming integrated in the shadows.

The conventional assumption is that the established world is legitimate and legal and the alt-world is illegitimate and illegal. The alt-world maintains that the established system is completely corrupt, a rotten, eaten-out hulk, staffed by passive blue pills, complicit agents, and masterminds who want to impoverish and destroy the common people. Underground circles assumed that anything anti-establishment was automatically virtuous, a signpost to a new and better world. Quadriga's collapse suggests that the truth is much more murky and everything is connected.












Halifax CBC reporter Jack Julian is covering the story on Twitter. He revealed that the court considered releasing a list of Quadriga's clients; but crypto investors value anonymity. So the court discussed which social media platform was best to publish court updates for clients (?!) - on the assumption that they would frequent that social media site and happen to read it. They considered Reddit. This conversation is a strange example of new institutional roles potentially evolving for social media platforms.

Indian death certificate of Quadriga CEO, Gerald Cotten, with his surname misspelled. Why did the Canadian government take this document as adequate proof of death? Image Source: Reddit.

[Addendum: the above tweet was added to this post on 7 February 2019, after the original publication date of the post.]

The Truth About QuadrigaCX (4 February 2019). Video Source: Youtube.

The video above suggests that the Quadriga story about the CEO's death is suspect and the Royal Canadian Mounted Police are investigating it. You can see Redditors talking about Quadriga here and here. They were mixed as to whether they thought Cotten deserved to die or whether they themselves were pathetic:
  • "Gerald Cotten... We're coming after you. Reddit will never fail. It's the internet versus one little, weak low life man. Hope you're enjoying stolen hard earned money by hard working Canadians. Enjoy that beach you're on far away. That funeral doesn't even have you in an obituary. Delete this. I dare you. We dare you. Oh. Next time pick a more reasonable disease to die from.. And sign a will way in advance."
  • "Check out Lovie Horner’s involvement. (Past board of director and current shareholder) she’s out of the country now traveling the world. She is also involved with Michael/Omar through the BJJ foundation...some JuJitsu thing in Vancouver."
  • "You should be after Michael Patryn aka Omar Dhanani, the mastermind behind the whole thing"
  • "Right now Gerald is in some third-world country blowing your money on drugs and underage hookers"
  • "Gerry and Jen are actually really nice people and they deserve all this money. He's a hero for taking it from you basement dwelling neckbeards."
  • "Pro tip. You can't kill a guy who is already legally dead."
  • "Maybe he was poisoned by his new wife and his partner. They blame him for the problems and have had 30 days to clean out the accounts. This is not the end of this story by a long shot"
  • "I like where this is going :P good imagination! Honestly I was thinking maybe she did. Or both were extorted. Marrying in October, signing a will in November, dying in December and then announcing said death in January is all too perfect lol."
  • "They are going to get away with it. The money is long gone. Soon they will be too retiring to travel the world."
  • "This was completely planned. The marriage, the orphanage, his death. All completely planned. Osama Bin Laden lived for a decade unseen by the outside world. Gerry Cotten got plastic surgery and a new identity and is living large in Spain or Malta or Vietnam. No way did he take all that money and not have a plan to vanish. Gerry Cotten is Kaisar Soze"
The Quadriga collapse shows the conundrum of trying to live in the old system while dabbling in the new one. Behind the scenes, it is hard to tell how Gerry Cotten's activities in India, or Quadriga's missing millions, may align with, or oppose, the endgame of the established system. Perhaps this was not just a scam to steal clients' money, but part of something larger. It is very difficult to navigate the emergent system because everyone - whether they are mainstream or alternative, blue-pilled or red-pilled - says one thing and does another. 

QuadrigaCX - Facts From The Canadian Mt. Gox (3 February 2019). Video Source: Youtube.


Redditors were unimpressed by Cotten's widow, Jennifer Robertson, who organized Quadriga's bank drafts by stacking them on her stove:
  • "Ah, the traditional red candle, symbolizing lost investment..."
  • "I'm more surprised that with all the money they stole, they couldn't buy a less shitty stove."
  • "Shes trying to 'cook the books' as it were."
  • "Looks like some sort of weird ritual was being performed"
  • "It's been reported the bank drafts are no longer sitting on stove."
  • "They have been relocated to be on top of the burning candle"
  • "Umm is anyone not weirded out by the fact that the names weren't blurred before being published out on twitter?"
  • "You have to have a backup candle to burn up the bank drafts just in case the stove doesn't successfully burn up the bank drafts"
Anarchy in Acapulco

John And Lily On The Run: Acapulco One Year Later (13 March 2017). Video Source: Youtube.

In another story, an American crypto-anarchist who had fled the United States in 2016 was gunned down at his home on 1 February 2019 in Acapulco, Mexico. 'John Galton' had been living there with his girlfriend for three years. From MSN:
"Joining a community of like-minded expatriates, Galton had sought to build a life as a self-made man. He advocated drug liberalization and taught classes on cryptocurrencies. ... He envisioned himself as a prophet of American entrepreneurship — but freed from the constraints of the American nation-state. 'Go for what you want to do,' he suggested to Americans considering a similar move. 'If you think it’s not possible, maybe you’re doing it in the wrong place.'"
But Acapulco was the wrong place, as it turned out, because Galton evidently crossed the Mexican drug cartels.

Police photos from 3 February 2019, reportedly of the grow op and lab in Galton's and Forester's apartment in the Vista Hermosa neighbourhood of Acapulco. The police report states that the plants were intended to create hybrids which would produce a new kind of cannabis blend or spice. Image Source: Fiscalía General del Estado de Guerrero.

The cartel attack was posted on Facebook by Galton's girlfriend, Lily Forester (aka Lily Davine), who was present at the time. Galton's friend Jason Henza, who was wounded in the attack, has left Mexico, according to Coinspice, while Forester is still there. She hinted that they had trusted someone who had posed as a fellow anarchist; she was unclear as to whether Galton's targeted murder also had to do with drugs and cryptocurrencies. But given the police photos, it may well have done.

It is a sign of the times that Forester appealed during the shooting to Facebook before she even called the police. Her action indicates a reliance on social media as a new kind of quasi-legal institution. Others have already pioneered this tactic in corrupt and lawless environments. Video posts, uploaded in real time, are a universally-distributed testimony and evidence which bear witness to crimes as they happen.

Crypto Enthusiast John Galton Murdered in Acapulco, Mexico (3 February 2019). Video Source: Youtube.


"Lily’s only known public statement, from a Telegram group, as of publication [on 3 February 2019]." Images Source: Coinspice.

This crypto-anarchist couple saw themselves as living outside the existing system. They did not see themselves as criminals, rather, their criminal status was symptomatic of the corruption and oppression of the establishment. Some Youtubers were sorry about Galton's death; others were critical. One said:
"No police record of their cannibus crimes, and now John is taking a dirt nap. Their ideologies are full of crap and their story is a lie."
And another said:
"This little ex-con wanted to play Chapo in Acapulco, what could go wrong? On top of it, he started to launder some money in form of bitcoins, and then the crypto bubble exploded ... And now he is dead"
Galton, who obviously borrowed his alt-name from Ayn Rand's work, was avoiding five felony counts relating to drug charges in the USA. He had advocated living a stateless, transnational existence, and was profiled in the upcoming documentary film, Stateless.

Mexican police said an American anarchist who went by the name 'John Galton' was killed and his friend Jason Henza shot in the armpit, leg and hand in a targeted attack Friday in Acapulco. Image Source: Youtube via MSN.

Stateless | Documentary Trailer (4 July 2018). Video Source: Youtube.

Definitely Not Davos

'John Galton.' Image Source: Coinspice.

Galton's death, broadcast in this way, oddly upheld his values (his last interview with Forester is here). It all happened just before an international meeting in Acapulco which promotes these ideas. Galton had co-founded Anarchaforko (its scant events page is here), an offshoot conference from an annual gathering of crypto-anarchists, Anarchapulco. The Anarchapulco schedule for 14-17 February 2019 is here; it looks like the meeting is going ahead as usual. If anything, Galton's death will give the event more publicity.

The Anarchapulco 2019 line-up reveals the cultural side of decentralized platforms planned for a different kind of future internationalism, with strong drug, New Age, and occult themes. This subculture is slowly going mainstream politically: anti-vaccine, anti-public-school, more green pill than red pill. Speakers at Anarchapulcho range from David Icke to Ron Paul! It's definitely not Davos.

A Three-Legged Stool: The Mainstream, The Underworld, The Underground

However, it would be a mistake to assume that these anti-establishment meetings are of interest only to individuals on the fringe, and unconnected to the regular business of the establishment. The crypto-sphere is robust in Mexico. It is also regulated; the government passed laws to manage fintech in March, 2018. Regulations were put in place ostensibly to curb money-laundering. But perhaps this legislation is more indicative of the development of an integrated establishment/anti-establishment system.

The establishment system is not what it seems. Scandal after scandal testifies to that. As we have seen from whistle-blower journalists and document dumps about tax havens, the establishment says one thing to the tax-paying public and it pays lip service to law, order and civil society. But it does quite another thing in its business-as-usual reality. Laundering drug money is connected to an international network of tax havens and enormous wealth pouring into the City of London, fueling the arms trade, oil trade, and human trafficking.

Over the past few years, WikiLeaks and the Panama Papers and the Bahamas Papers revealed that this complex reality is the way globalism actually works and what it really represents. This is not about a legitimate world pitted against an illegitimate world: the Mainstream and the Underworld are all one operation.

Populist critics argue that this is a sign of the establishment's deep corruption. But I think leaders of the establishment do not see it that way. Theirs is a system of compartmentalization, with different rule books and players at work inside each compartment. Those who know this were chosen to work at that level because they can reconcile these contradictions. Someone accustomed to the shades of grey might not see such activities in terms of lies, hypocrisy, deception, crime and corruption. They might believe that the ends justify the means. Maybe they think that regular, common folk (peasants) can't handle the truth.

Perhaps it was always like this, all shades of grey, but only those in power knew it. After years of exposure to the blurred lines between legal and illegal, or legal and non-legal, or legal and extra-legal, it might seem like one big wash. In that case, someone working in the establishment might no longer be able to distinguish between order and chaos, good and bad, morality and abuses. Once such a person knew all the ambiguities and overlaps and secrets of the established system, they might well ask: what difference does it make?

Where do the technophile alternatives to this compromised attitude fit? There is a saying on the Internet: woke equals broke. The more you criticize the established system, the more likely you are to be marginalized financially. At alt-meetings, crypto-anarchists try to develop income alternatives as well as decentralized applications. These are their internationalist challenges to mainstream globalism.

With all this said, I still think that this tech-oriented, New-Agey Third Way is the final leg in a three-legged stool. If the Mainstream provides the official system, the Underworld provides the illegal profits, and the Underground launders the money between the two. It is a compartmentalized system, and occasionally the doors between the compartments have to be opened and again shut.

Thus, the Underground - or key parts of it - may not be building a third way society and economy which could and will evolve apart from the establishment. I could not find a single mainstream outlet able to confirm John Galton's real name. This strikes me as strange and it could be a deliberate omission. There are a lot of strange stories coming out of the crypto space now. Is there a connection between these stories and the Dark Overlord hacks? They don't look related, but time will tell.

On 7 February 2019, Wells Fargo experienced outages, denying customers access to their bank accounts in the USA via automatic teller (ATM) banking machines and smartphone apps. [Addendum: The above tweet was added on 7 February 2019, after the original publication of this post.]

The Mainstream, the Underworld and the Underground are on the verge of convergence. The alt-media anticipate an economic collapse; the establishment talks of a coming recession. The death of the petrodollar and the related potential conflict in Venezuela may prompt an economic reboot and the creation of a new financial system. The opening act would be a convenient time for people to die, disappear, and for cryptocurrencies to go missing.


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