TRUTH
You may have seen headlines this week about Donald Trump’s new social media company, TRUTH Social. Behind TRUTH Social is a company called Trump Media & Technology Group, which has now merged with a SPAC called Digital World Acquisition Corp, or DWAC. According to the press release:
Trump Media & Technology Group's mission is to create a rival to the liberal media consortium and fight back against the "Big Tech” companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America.
And, because no Trump announcement would be complete without a quote from the man himself:
President Donald J. Trump, the Chairman of TMTG, stated, “I created TRUTH Social and TMTG to stand up to the tyranny of Big Tech. We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced. This is unacceptable. I am excited to send out my first TRUTH on TRUTH Social very soon. TMTG was founded with a mission to give a voice to all. I'm excited to soon begin sharing my thoughts on TRUTH Social and to fight back against Big Tech. Everyone asks me why doesn’t someone stand up to Big Tech? Well, we will be soon!”
I do not often read SEC filings but I imagine this type of quote is unusual, to say the least. So what is DWAC going to do now that it’s become part of the Trump empire? They are going to create a subscription video service featuring “non-woke” programming, and launch a social media platform to “disrupt Big Tech”.
Matt Levine points out that, like many things Trump, TMTG doesn’t appear to be concerned with things typical companies are concerned with, like having a “business plan” or “making money”:
So if Donald Trump announced “hey I’m gonna do a social media company, buy some stock,” people would buy some stock. And then he’d get a lot of money. And then if the social media platform did not end up being profitable — as I cannot imagine it would be! — then he would, uh, still have that money? And if the social media platform did not end up being launched — if Trump and his crack team of technologists just couldn’t actually build a well-functioning online social network — then he would, uh, still have that money? And if there was no crack team of technologists at all, if nobody even tried to build the social media platform — then you see where I am going with this right?
He may be right! The TMTG website has a “company overview” deck which is not like any company deck I’ve ever seen in my life, because as Levine mentions it does not contain a single dollar sign. It’s got slides like this:
Trump is banned from Twitter, but TMTG thinks that, what if, Twitter sat on a pyramid above the FAANG companies and, well, there’s no further elaboration on that point. TMTG says it can take on every major media company, and also that it can build a “Non-Cancellable” global community, illustrated by a picture of the Earth flipped 180 degrees for some reason, and a smaller Earth that’s supposed to be the moon?
I could write an entire newsletter about this deck, but here’s one last slide featuring TMTG “galvanizing” all the disparate conservative media platforms by creating such a powerful gravitational pull they’re about to crash into it like asteroids:
I think it’s a fair point that Trump would cause an extinction-level event if he knew how, and early signs indicate he may get his hands on enough money to do so:
Trading in the stock was halted due to volatility multiple times Friday. The SPAC, which trades under the ticker DWAC on the Nasdaq, skyrocketed 216% at one point and last traded up nearly 140%. The stock surged more than 350% to close Thursday at $35.54 in explosive trading volume and volatility.
That was Thursday. Today the stock went up another 200% and is currently sitting around $100 a share. Essentially, the markets have decided that Trump’s media and technology company which does not appear to have either media or technology, is worth $3 billion dollars. Nothing is real, markets only go up, et cetera.
So what does all of this mean? Well, first of all, Trump’s new company is going to be subject to the SEC and securities laws now. Trump’s empire has been a closely guarded empire of private LLCs up to this point, so he can both avoid taxes and scrutiny. Now, the government and investors can look behind the curtain and see what’s going on at TMTG, assuming there is anything going on there.
The news on that front is already not great. It appears that Trump’s team has ripped off the source code for TRUTH Social from the decentralized social network Mastodon:
While anyone can freely reuse Mastodon’s code (and groups like right-wing social network Gab have already done so), they still have to comply with the Affero General Public License (or AGPLv3) that governs that code, and its conditions include offering their own source code to all users.
Truth Social doesn’t comply with that license and, in fact, refers to its service as “proprietary.” Its developers apparently attempted to scrub references that would make the Mastodon connection clear — at one point listing a “sighting” of the Mastodon logo as a bug — but included direct references to Mastodon in the site’s underlying HTML alongside obvious visual similarities.
Again, if this was just one of Trump’s LLCs or a rogue campaign manager, little would come of it, but TMTG is a public company now! This means we can expect a lot of securities fraud cases to be filed against TMTG, for things Trump says that materially affect the price of DWAC’s stock - which, you have to imagine, would be everything he says - or for things his company does, like steal open source software. Exciting times!
Then there’s the guy who is currently running DWAC, Patrick Orlando. He’s a Miami businessman who appears to be a professional SPAC CEO - his name is on two other companies that are attempting to go public via merger. Anyhow:
Perhaps more interesting is Mr. Orlando’s role as CEO of Yunhong International (ticker: ZGYH), another SPAC where he is CEO. Yunhong International is located in an office building in Wuhan, China, according to SEC filings. That same address is shared by Yunhong Group, which sells an array of supplements such as “Natural Brain Booster Capsule” and “Bitter Gourd Peptides”.
Excellent. I am certain that Trump did no due diligence on Orlando - though I bet he liked his last name - but it is grimly funny that his new media company has a CEO who also runs a shady supplement company in Wuhan.
Levine proposes a theory I am inclined to agree with - Trump’s company will be worth a lot of money while Trump is in the news, and the stock price is less correlated to anything the company does than it is Trump’s ability to keep the media narrative focused on himself. The problem is Trump is a greedy, crime-inclined goon who will undoubtedly do a lot of securities fraud now that he’s ostensibly sitting on a giant pile of cash. I hate writing about Trump the person, but I am certain Trump’s new tech-slash-media company will provide lots of good future content for this newsletter.
CryptoEats
We have talked about rug pulls before, when someone or a group of someones creates a crypto coin, a bunch of people buy into it, and the creators steal the money and disappear. It happens all the time, and is quickly becoming an unremarkable occurrence. But! This week, a startup called CryptoEats generated an elaborate marketing campaign for its new token, which would allow customers to pay for food delivery in cryptocurrency, along with other lofty claims:
The CryptoEats website claimed it had "hundreds of restaurants to choose from" and promised odd-sounding features such as ordering individual items and having a driver pick them up from different restaurants on the way to your place. It promised coffee delivery within five minutes at the press of a button, and promised potential workers a pension contribution and guaranteed salary.
CryptoEats issued press releases, claimed it had raised $8 million in seed funding, and paid influencers to hype the project on TikTok and Instagram. What’s perhaps the most remarkable about the project is how quickly it was shut down:
Soon after launching token sales this weekend, blockchain records show, the CryptoEats developer wallet transferred roughly $500,000 in Binance Coin into various wallets and the project completely disappeared off the internet without releasing its promised app.
Given the weeks spent hyping the token and how quickly they accumulated $500,000 dollars, maybe the smarter move was to run it for a few more days? Ah well. Londoners won’t get 5 minute coffee delivery or be able to pay for Nando’s with Bitcoin, but a few of them will have the promotional hats, shirts, and bikes as souvenirs of an unusually elaborate rug pull.
Suex
One thing outsiders like to say about cryptocurrency is that it’s mostly used to commit crimes. Crypto enthusiasts will then point to currencies that claim to exist to do noble things, like help the unbanked, or whatever. Likewise, cryptocurrency exchanges are treated with skepticism, because they facilitate moving crypto around, and can allow holders to cash out. Some exchanges are regulated, and ostensibly following the law, and some are not. Like Suex:
A cryptocurrency broker that the Biden administration considers a key cog in the recent ransomware epidemic is legally registered in the Czech Republic but doesn’t appear to have an office there. It may be operating out of Moscow’s tallest skyscraper despite its not being listed at the address.
[…]
Suex OTC, a virtual currency exchange, is a transactions platform that allows cryptocurrency traders to buy and sell digital coins.
Suex has told various governments that it is not doing crimes, which is of course what you say when you don’t want to incur the wrath of law enforcement, but the way the exchange is set up does seem…unusual:
Since at least 2018, Suex has converted cryptocurrency holdings into cash inside brick-and-mortar offices in Moscow, St. Petersburg and possibly in the Middle East […]
Maxim Kurbangaleev, who described himself as Suex’s co-founder on LinkedIn, described how quickly customers can start trading “without the long and tedious sending of documents and passing endless checks.”
[…]
Suex largely communicated with its clients via the Telegram app and accepted new customers on a system of referrals from trusted sources, according to TRM. Transactions were only completed at Suex’s offices, where, one ad bragged, customers would be treated to cookies and tea.
If you were going to build a crypto exchange for doing crimes, you might build one that onboarded new clients via secure messaging apps and required them to show up to an unregistered office in Moscow to do their deposits and withdrawals. I don’t know. Suex has been added to the US Treasury’s list of sanctioned entities, which doesn’t mean much to a company operating in Russia, but the Biden administration hopes this will deter ransomware victims in the US from paying ransoms in crypto which, maybe, I guess.
Ransomware
Speaking of ransomware, the criminal organization allegedly behind the Colonial Pipeline hack created a fake company and website to recruit:
The fake company is using the name Bastion Secure, according to the researchers. On a professional-looking website, the company says it sells cybersecurity services. But the site’s operator is a well-known hacking group called Fin7, Recorded Future and Microsoft say.
[…]
The Bastion Secure website, which uses the logo BS, has listed jobs that are technical in nature and appear similar to work that would be performed at any security company—programmers, system administrators and people who are good at finding bugs in software. Prospective hires will work nine-hour days on a predictable schedule: Monday to Friday, according to the company website. Lunch breaks are provided, the site says.
I mean, nine hour days seem long, but at least you get lunch. Fin7 is a Russian hacking group that’s targeted companies in the US for years. There is some speculation that Russia is allowing ransomware groups to operate unmolested as long as they target foreign countries, which could explain Fin7’s continued existence and recent boldness.
Recruiting and strategy are real issues as ransomware gangs become more sophisticated, and go after larger bounties. BlackMatter, another ransomware gang, recently gave an interview about their…business…plan, I guess? As ransomware becomes more lucrative, and law enforcement agencies take more aggressive action, gangs are faced with choices about who to target:
…the gang said it was specifically interested in targeting large companies with annual revenues of more than $100 million. However, the group said some industries were off limits: It would not extort healthcare, critical infrastructure, oil and gas, defense, non-profit, and government organizations.
What a relief! I don’t know what it says about where we are as a society that hackers are worried about professional ethics as well as developing cutting edge technology, but sure, why not.
Beanie Babies
If you lived through the mid-1990s, you probably remember Beanie Babies. Small, stuffed animals that took America by storm. The company, Ty, made hundreds of different varieties of Beanies, and for a time some were thought to be quite valuable. The frenzy didn’t last for long, though, and eventually prices crashed. All the stuffed pets parents and kids had saved in hermetically sealed containers were worth less than what they cost to buy.
These days, however, there’s a weird market for the toys on eBay:
Most supposedly rare Beanie Babies like “Princess,” the purple Princess Dianna bear, are selling for a couple bucks. But there’s also dozens of listings showing Princess and other Beanie Babies selling for outrageous sums: A Princess seemingly sold on June 30 for $25,000, an Iggy the Iguana sold for $15,000, Gobbles the turkey sold for $14,888.
What’s happening? Well, it turns out it’s a quirk of the way eBay’s auction system handles listed prices:
Looking at the Princess Di bear sold on June 30 for $25,000, the listing shows the seller created an account in 2019 and has no sales history. The bear shows as sold, but then was relisted for $17,000.
So did this bear sell or not? With eBay, it’s hard to tell. If you modify the search conditions to show “completed items” as well as “sold items” then the $25,000 price tag returns with a line through it. This indicates that it didn’t actually sell for $25,000 but went for the best offer, which is a secret between the seller and buyer.
And it’s a recent development, with many of these high priced Beanies selling within the last few months. Some eBay experts speculate that it’s either a scam to trick people into buying wildly overpriced Beanies, or that it’s a form of money laundering:
“Those are bogus,” Schlossberg, a historian of Beanie Babies who runs the website Ty Collector with his daughter, told Motherboard. “You’ll see somebody who lists a Beanie Baby for $14,000. They’ll have an accomplice buy it and then they’ll cancel the transaction...and it’ll disappear from eBay.”
This has tricked a few collectors into thinking their toys are suddenly worth a small fortune. Even the truly rare and valuable toys are worth no more than a couple hundred dollars. The article also explains one reason rich people like overpaying for things at charity auctions:
According to Schlossberg, the Princess Di bear frenzy got worse after one was sold at a charity auction for $16,000. “Of course when that got out, people thought that’s what the Beanie Baby was worth now,” he said. “Whoever bought that Beanie Baby would have probably paid $16,000 for a vial of dirt. They were looking for a tax write off.”
Very cool. Anyhow, Beanie Babies are not suddenly worth hundreds or thousands or tens of thousands of dollars. Scammers are either attempting to trick gullible people into buying them, thinking they can flip them for more money, or they’re laundering money. I’m not sure which option is worse, but so long as there are largely unregulated Internet marketplaces, scammers will find new ways to mess with them.
Short Cons
Defector - “Based on what that agent learned from his conversation with this player and others similarly shut down as close contacts in 2021, he estimates that 10–15 percent of players have a fake vaccine card. “I think it is a lot more common than people realize,” he said. “Look, you’re talking about the NFL. These guys do anything they can to fudge a weed test or a PED test.””
Bloomberg - “What Knight didn’t mention was that, for years, he’d been using a range of legal techniques to ensure his heirs keep control of most of his assets and profit from them in the process, quietly transferring vast piles of money in a textbook example of how the rich avoid taxes.”
Michael Hobbes - “The real story of the McDonald’s case was always available, it just didn’t matter. By the time the Liebeck verdict came down, Americans had already spent nearly a decade hearing about ambulance-chasing lawyers, “jackpot justice” awards and the debilitating “tort tax” on American businesses.”
Tips, thoughts, or vials of dirt to scammerdarkly@gmail.com