Earlier in 2024 it was reported the Cook Islands had drafted a so-called Tainted Cryptocurrency Recovery Bill. Whoa. Sounds like Spy stuff?
Well, not so fast. I got bored enough to read it, and some provisions do legalise 'offensive' security work, aka hacking but as part of "crypto" asset recovery: looks to me like debt collectors have finally sunk their teeth into "crypto". You can only guess what spies do anyway, their laws are about keeping stuff secret and look nothing like this.
Now, I have a few dumb questions. Do these collectors know that "crypto" means hidden? That they are trying to break into a system in large part, if not primarily designed for hiding assets?
Apparently not, because the idea that tainted assets can be separated from other assets in a Pyramid scheme, is plainly nonsense: it's all stolen via deception with technobabble and thus tainted. Sure there's levels of bad but it's all bad. Pyramid schemes themselves are illegal under the Fair Trading Act with the humble 'chain letter' used as one such example. Do these debt collectors not have lawyers familiar with NZ and Cook Islands legislation? Or are they actually challenging existing Acts with this Bill, and trying to legitimise "crypto" currency?
The Good, The Bad and The Ugly
Anyone might also want to ask what a US based crypto asset recovery firm is even operating in the Pacific for? Rarotonga doesn't have an FBI. Why lobby for a law here in the Pacific, when the USA is the place you'd most want and need legal indemnity for that kind of business?
Well there is an issue here and one I think worth tackling. It is good to sanction authoritarian regimes and enforcement of sanctions needs teeth like this. If it is this, I'm doubtful but that has my support.
But legitimising a Pyramid scheme by entertaining the notion 'tainted' assets are separable from others is however, sounding bad to me. No strategic interest is being served by that, unless that interest is causing inflation in domestic currencies of the Pacific.
I'm not relitigating an inflation discussion here, but to know where I sit on that I think it was settled long ago by the Philips curve and MONIAC, a name-play on it's contemporary the ENIAC. It could also be that inflation was better defined even earlier by C.H. Douglas of the Social Credit movement, using his elegant A+B theorem, which I think is more like the Ohm's Law of economics than S-D equilibrium, and holds true without serious refute to this day if I'm not mistaken.
Albert Einstein even remarked what that equation plotted was the "eighth wonder of the world". It is interesting social credit means something completely different today, but there exists a UBI which borrows those ideas when not straight plagarising them pretending they are a new invention: the UBI we know today was called a National Dividend then. But, I digress.
I can't make sense of why the Cook Islands should be some carve out for safe crypto asset recovery operations, although libertarians do have a history of meddling in the Pacific trying to establish sea steads and quasi-states like the Republic of Minerva, but I'm just a simple computer guy.
Maybe this asset recovery firm has a customer in Rarotonga? But before asking 'why Rarotonga' what on Earth gives this company the right to take anyone's fake Internet money? What gives anyone that right when the mantra "not your keys, not your coins" is a central crypto thesis? Isn't this violating some core political belief that Bitcoin should be money outside of state control?
A crypto recovery service sounds like legitimate business, if you assume crypto is legitimate. But who does that? I feel trauma to think who, and creating legitimacy for a Pyramid scam by trying to pass law on an island that's only a few times bigger than it's runway is suspicious as hell, if that is the intention. In any case crypto asset recovery does not sound like the kind of thing that would be big on the Rarotongan political agenda. Who is this Bill really serving?
Company Profile
Drumcliffe states on it's website: "Drumcliffe is a private investment management firm overseeing portfolios of high-value claims pursued on behalf of the victims of fraud, corruption and abuse of power. We finance and manage asset recovery and third-party liability claims as well as insolvency actions."
I find no reason to doubt the company's bona-fides, or that high value claims exist, but nowhere does Drumcliffe appear to acknowledge that Bitcoin itself is a wasteland of gambling, fraud, Pyramid scam operation and worse. The website sports an industry body logo claiming Drumcliffe is a signatory to the "Principles for Responsible Investment", do those principles include collecting on behalf of Pyramid scam operators? It's a question. But in fairness the benefit of doubt applies here, and the sheer volume of deception surrounding crypto can make victims of whole boardrooms, even cyber-security experts.
Objections not withheld, I am not condoning any theft here either, rather I can only hope to remind people there is no honour amongst thieves and Pyramid scams like Bitcoin and "crypto" are just that: sophisticated, white-collar forms of theft. Most people experience the sharp end of it as a "rug pull" and it's playing with fire to put one cent into a Pyramid scam. This whole line of business also seems to run the risk that there will be a level of schadenfreude to expect whenever the fake Internet money gets stolen, apes go missing, et cetera.
Victims of crypto thefts do however exist and might want or need "crypto" asset recovery services, but they are victims of deception first and would do well to see the risk their money is gone, and was gone at the moment it was "invested" if S-D equilibrium has any truth to it, not the time it was supposedly stolen. I've seen enough of these "crypto" thefts to be suspicious of the true nature of them. New Zealand recently reformed tax rules, without any Act of Parliament, dangling a tax incentive to get "hacked" so no "crypto" write-off is being given a femtogram of legitimacy by me.
To victims the best advice I can offer is beware of false hope because people will sell you that, and then put you on a list, and market you more false hope with bulk emails and targeted advertising in your social media feeds. Does it feel like "crypto" is your only hope to get ahead in life? That feeling is essential to the deception, deceptive because most "investors" lose in mathematical models of Pyramid "investment" schemes and going by the word on Main Street. It sometimes seems like only Wall Street are left saying "crypto" is legitimate business.
Concluding remarks
This story leaves me wondering if Drumcliffe truly understand the insidious nature of "crypto", the company's website indicates it also takes market positions on debts it collects, rolling the dice on the hopes of recovery and the time-value factor could even be their bread and butter, and so this firm I can't excuse from comment around conflicted interests either.
It is difficult to imagine any principled cyber-security expert wanting to apply for the roles established as part of the Bill. I can just imagine the next job interview after that: you were recovering who's stolen crypto? Russia's or North Korea's?
I know no-one is asking but the strategic position if you ask me, would be to let your enemies hold the bad bags, tell them how great Buttcoin is (lol) then keep these scams as far away as possible from friendly economies, where the resulting uneven development and inflation would be counter to the objective of building rapport. Countering terrorist financing and sanctions enforcement is the role of governments and not the private sector anyway, so I'm going to continue being skeptical of this business and lobbying around the Bill without knowing more.
https://www.abc.net.au/pacific/programs/pacificbeat/cookscryptobill/103738400