A House Ethics Committee investigation excoriated Congressman George Santos for ample evidence of criminal behavior but made no recommendations, despite stating he "cannot be trusted."
Santos claimed to be a digital private equity underwriter (PEU) before winning his House seat. Ironically, George is in a position to further crypto and digital currencies now that FTX's Sam Bankman-Fried has been found guilty of fraud. The industry is regrouping and ready for a major push.
Carlyle co-founder and policy making billionaire David Rubenstein has a family office, Declaration Partners. Declaration has a number of affiliates focused on digital and cryptocurrencies.
Rubenstein started by investing in Paxos. FTX's SBF was also an early Paxos investor. The pair didn't discuss their holdings in a September 2022 Bloomberg interview.
Declaration Partners holds a stake in Varo, an "all digital, fully chartered U.S. bank." Also in the portfolio, Immutable, which offers "massively scalable layer 2 blockchain secured by Ethereum." Rubenstein's family office also believes in Figment, "a blockchain infrastructure provider offering staking services and tools for Web3 developers." It also has a stake in Solidus Labs, a "platform surveilling and preventing abuses in crypto markets."
That's at least five Rubenstein bets on crypto's ethical recovery. It would be telling if the winning vote for any cryptocurrency legislation came from George Santos. I imagine his goal is to ride his term to the end and gather those lifetime benefits.
David Rubenstein stands to help Santos with his lifetime healthcare given Declaration's deep focus on healthcare AI. Also, Declaration "prioritizes reputation" and may be able to help George once he leaves "public service."
Once a digital PEU, always a digital PEU?
Update 11-17-23: The Ethics Committee report indicated Santos received $250,000 for raising $255 million for A-RU Holdings. Santos stood to get an additional $750,000 at the conclusion of the project. The funds were paid to Santos' Devolder Organization via a "capital introduction" contract. Santos funneled other large political donations through RedStone Strategies LLC.
Update 11-20-23: The New Republic had a story on Santos and it ended with:
His biggest mistake was getting elected. His second-biggest was doing corruption the wrong way.
Update 11-21-23: Santos neglected to accumulate enough money for a proper settlement, like crypto exchange Binance, Binance settled with the Justice Department according to news sources:
“Binance willfully enabled hundreds of millions of dollars in transactions between American users and users subject to US sanctions. Its platform accommodated criminals across the world who used Binance to move stolen funds and other criminal proceeds.”
The penalty is $4.3 billion, CEO loses his job and pays a mere $50 million
Binance engaged in “consistent and egregious violations” of US law that “allowed illicit actors to transact freely” on the platform and “supporting activities from child sexual abuse, to illegal narcotics and terrorism across more than 100,000 transactions”.
Is the deck cleared for a sparkling crypto future?
Update 11-23-23: Coinbase CEO Brian Armstrong noted after the Binance settlement:
“Since the founding of Coinbase back in 2012 we have taken a long-term view. I knew we needed to embrace compliance to become a generational company that stood the test of time”
“Today’s news reinforces that doing it the hard way was the right decision. We now have an opportunity to start a new chapter for this industry.”
New chapter or PEU chapter?
Some reports out late on Tuesday suggested that Zhao’s deal with the Department of Justice could allow him to keep the majority of Binance’s shares.
I smell a new Michael Milken. Forty years from now who'll pull out the pardon pen?
Politicians Red and Blue love PEU and increasingly, more are one.
