How Wall Street Strikes In The Crypto Crisis

The buffet is on: Celsius and BlockFi – two major crypto financial service providers – are on the brink of bankruptcy in the wake of the current market crash. If you believe current media reports, Wall Street is already waiting in the wings to strike cheaply in the crisis.

The Wall Street Sharks

For around two billion US dollars, Goldman Sachs wants to buy into Celsius at junk prices should it come to bankruptcy. Hedge fund Morgan Creek has eyed BlockFi for around $250 million.

Crypto and Wall Street has long been a David versus Goliath-style tale staged with the verve of a Shakespearean drama. The fronts were clear. Bankers bad, crypto good. And vice versa. Up through 2020, Goldman Sachs never missed an opportunity to brand BTC as a worthless scam for scammers. Then came the big boom in DeFi, NFTs and Co. in 2020, and with it the U-turn of the big banks.

Today Goldman Sachs cooperates with FTX and Coinbase, two of the largest crypto exchanges, offer BTC as an investment and as part of a loan. CEO David Solomon presents himself as a big crypto bull. JPMorgan assembles a 100-person crypto team, makes a big bet on the Metaverse. And the world’s largest wealth manager, BlackRock, is making a $400 million buy into stablecoin USDC, the direct competitor of Tether, issued by Circle.

If you believe the crypto CEOs of this world, then the big banks are blowing a counter-revolution in the crisis. “The sharks of Wall Street are now swimming in crypto waters,” the Celsius executive explained shortly after his token crashed, back in May 2022. “They brought Luna down. They’ve tried Tether, Maker, and many other companies. It’s not just about us,” he said. “They are all looking for a weakness to exploit and destroy”.

Tether CEO Paolo Ardoino also feeds this conspiracy narrative on Twitter. Hedge funds massively shorted its stablecoin after Luna crashed, flanked by disinformation campaigns against the project, nearly $16 million in reserves had to be paid out in a matter of days. “It really seemed from the beginning of a coordinated attack, with a new wave of FUD, troll armies, clowns etc.”

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I have been open about the attempts from some hedge funds that were trying to cause further panic on the market after TERRA/LUNA collapse.
It really seemed from the beginning a coordinated attack, with a new wave of FUD, troll armies, clowns etc. https://t.co/hhcsgHV1Ow

— Paolo Ardoino 🤖🍐 (@paoloardoino) June 27, 2022

But the simple truth could also be: Celsius and Co. have massively gambled away with their offer of ever higher interest rates and have become greedy. The irony is unmistakable: the self-appointed saviors from the yoke of the banks must now be rescued themselves, by their own enemies.